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Violations of Colorado’s non-compete statute to become a criminal offense

January 13, 2022

On March 1, 2022, Colorado Senate Bill 21-271 (SB 21-271) goes into effect. This new law will make the violation of a number of statutes, including Colorado’s non-compete law, C.R.S. § 8-2-113, a criminal offense, specifically a class 2 misdemeanor. See Colorado Senate Bill 21-271, Section 81.

In Colorado, covenants not to compete that restrict the right of any person to receive compensation for the performance of skilled or unskilled labor are void unless one of the following four exceptions are met:

Any contract for the purchase and sale of a business or the assets of a business

Any contract for the protection of trade secrets

Any contractual provision providing for recovery of the expense of educating and training an employee who was employed by the employer for less than two years

Executive and management personnel and officers and employees who constitute professional staff to executive and management personnel