Pay-threshold ban
Colorado Non-Compete Law (2026): Banned below $130K
Colorado permits a non-compete only against a worker paid above the annually indexed highly-compensated figure, and only where the covenant genuinely protects trade secrets and goes no further than that purpose requires. A lower and separately indexed threshold governs customer non-solicitation. Since August 2025, licensed medical and dental providers sit outside the scheme altogether and cannot be restricted no matter what they earn.
The rule
How Colorado treats non-compete agreements
The $5,000 per-worker penalty attaches to presenting or attempting to enforce a prohibited covenant, so an employer can be liable without ever going to court. The notice defect is the most common failure point, since employers routinely bundle the disclosure into the offer packet instead of issuing it as its own document at the statutorily fixed moment.
If you are an employer
Run three checks before relying on a Colorado covenant: the worker clears $130,014 for 2026, the clause is written around trade secrets rather than general competition, and the standalone notice landed at the right moment in the hiring or compensation timeline.
If you are a worker
Earning under $130,014 in 2026 makes a non-compete void on its face, and if you are a physician, PA, APRN, dentist or certified midwife your pay is irrelevant because the 2025 amendment protects you outright.
| Classification | Compensation-threshold ban limited to trade secret protection |
|---|---|
| Pay threshold | $130,014 in annualized cash compensation for a non-compete in 2026, and $78,008.40 (60 percent of that figure) for a customer non-solicitation covenant. The Division of Labor Standards and Statistics resets both every January. |
| Maximum term | No duration ceiling in the statute. Length still has to fit inside the requirement that the covenant be no broader than reasonably necessary to protect trade secrets. |
| Notice or consideration | Yes, and the mechanics matter. The notice must be a standalone document in clear and conspicuous terms. Prospective employees must receive it before they accept the offer. Existing employees must receive it at least 14 days before the earlier of the covenant's effective date or the effective date of any additional consideration supporting it. |
| Primary statute | C.R.S. § 8-2-113 |
A covenant signed in another state
Colorado voids out-of-state choice-of-law and forum-selection clauses for workers who primarily live and work there, under C.R.S. § 8-2-113(5). Signing in a friendlier jurisdiction does not rescue a covenant once Colorado law applies.
Detail
What has changed, and what is still moving
Legislation 2024–2026
HB 22-1317 built the current structure effective August 10, 2022. SB 25-083, signed by Governor Polis and effective August 6, 2025, layered on a healthcare ban covering physicians, PAs, APRNs, dentists and certified midwives, stripped the highly-compensated exception as applied to them, barred damages recovery for breach by those providers, and capped minority-owner sale-of-business covenants using a consideration-to-compensation formula.
Bills to watch
No significant restrictive bills pending
Leading cases
Reported decisions construing the post-2022 statute are still thin. Phoenix Capital, Inc. v. Dowell (Colo. App. 2007) remains the reference point for pre-amendment reasonableness analysis, and courts continue to draw on it for background on protectable interests.
If you have one in hand
What can make a non-compete unenforceable in Colorado
- You earn below the threshold. $130,014 in annualized cash compensation for a non-compete in 2026, and $78,008.40 (60 percent of that figure) for a customer non-solicitation covenant. The Division of Labor Standards and Statistics resets both every January.
- The employer skipped a required step. Yes, and the mechanics matter. The notice must be a standalone document in clear and conspicuous terms. Prospective employees must receive it before they accept the offer. Existing employees must receive it at least 14 days before the…
- The scope is wider than the interest behind it. A restriction that reaches beyond the customers, trade secrets or goodwill the employer can actually point to is the most common reason a covenant fails in Colorado.
Whether any of these applies turns on the wording of your own agreement, your role and the case law your court follows. This page maps the statutory landscape; it does not replace advice on a specific contract.
FAQ
Colorado non-compete questions
Are non-compete agreements enforceable in Colorado?
Colorado permits a non-compete only against a worker paid above the annually indexed highly-compensated figure, and only where the covenant genuinely protects trade secrets and goes no further than that purpose requires. A lower and separately indexed threshold governs customer non-solicitation. Since August 2025, licensed medical and dental providers sit outside the scheme altogether and cannot be restricted no matter what they earn.
How long can a non-compete last in Colorado?
No duration ceiling in the statute. Length still has to fit inside the requirement that the covenant be no broader than reasonably necessary to protect trade secrets.
Is there a minimum salary for non-competes in Colorado?
$130,014 in annualized cash compensation for a non-compete in 2026, and $78,008.40 (60 percent of that figure) for a customer non-solicitation covenant. The Division of Labor Standards and Statistics resets both every January.
What notice or consideration does Colorado require?
Yes, and the mechanics matter. The notice must be a standalone document in clear and conspicuous terms. Prospective employees must receive it before they accept the offer. Existing employees must receive it at least 14 days before the earlier of the covenant's effective date or the effective date of any additional consideration supporting it.
Can an out-of-state employer enforce a non-compete against a Colorado worker?
Often not. Colorado voids out-of-state choice-of-law and forum-selection clauses for workers who primarily live and work there, under C.R.S. § 8-2-113(5). A covenant signed elsewhere can still fail once Colorado law applies.
Sources
How this entry was checked
- Primary source. C.R.S. § 8-2-113 — the statutory text itself.
- Secondary sources consulted. C.R.S. § 8-2-113 (Justia), HB 22-1317, SB 25-083 (2025), CDLE annual threshold adjustment, Epstein Becker Green 2026 threshold roundup, Rocky Mountain Employer.
Check it against a third party
None of these is ours. If a figure here matters to a decision, verify it:
- Federal Trade Commission — non-compete hub
- Economic Innovation Group — State Noncompete Law Tracker
- Fair Competition Law (Beck Reed Riden) — 50-state legislation tracker
- GAO-23-103785 — Noncompete Agreements (May 2023)
This page is general legal information published by Jurizmo and is not legal advice, does not create an attorney-client relationship, and may not reflect amendments enacted after the review date above. Consult a licensed attorney in the relevant state before acting on any agreement.