Colorado Employment Contract Review
Colorado's 2022 overhaul of C.R.S. 8-2-113 ties non-competes to a pay threshold that the state labor department resets every January. For 2026 the figure is $130,014, and a customer non-solicit needs at least 60 percent of that. Colorado also demands a separate written notice of any restrictive covenant and penalizes employers that try to enforce a void one, which makes the paperwork as important as the paycheck.
Non-compete in Colorado
Limited, enforceable only in narrow cases
Are non-competes enforceable in Colorado?
Here is Colorado non-compete law in plain English, with the statute it rests on.
Void unless the worker earns above a high salary threshold and it protects trade secrets; since August 6, 2025 (SB 25-083) that exception no longer covers non-competes restricting doctors, advanced practice nurses or dentists. Strict notice rules and penalties apply.
Governing law: Colorado Revised Statutes §8-2-113.
Whatever the label in your contract, Colorado courts look at whether the restriction is reasonable in duration, geography, and scope. A nationwide, multi-year, whole-industry ban is far more likely to be narrowed or struck down than a narrow one.
Who owns what you invent in Colorado?
Colorado does not have a specific personal-invention carve-out statute, so a broad IP-assignment clause can reach more of what you create, potentially including side projects. Read the assignment scope and push to limit it to work actually related to your job.
Arbitration and class-action waivers in Colorado
Colorado generally follows the federal rule that arbitration agreements are enforceable. Before you sign, check whether the clause is mutual and whether it waives your right to a class or collective action, you are usually giving up the right to sue in court.
What are Colorado's 2026 thresholds?
A non-compete can bind only a highly compensated worker, defined for 2026 as earning at least $130,014 a year, and only to protect trade secrets, no more broadly than reasonably necessary. A customer non-solicitation clause requires earnings of at least 60 percent of that figure, about $78,008 in 2026. Your pay must clear the bar both when you sign and when the employer tries to enforce the covenant.
The employer must give you notice of the covenant in a separate document that you sign, before you accept the offer. An employer that presents or tries to enforce a void covenant can owe actual damages and a $5,000 penalty for each worker harmed.
How fast must a Colorado employer pay you after you leave?
Under C.R.S. 8-4-109, if the employer ends the job, wages are due immediately. When the payroll office is closed, the deadline is six hours after the start of its next workday, or 24 hours if payroll is handled off site. If you quit, payment is due on the next regular payday, and earned vacation must be included either way.
Colorado also requires pay ranges and a general description of benefits in job postings under its Equal Pay for Equal Work Act, which has applied since 2021, so compare the posted range with the offer you receive.
Colorado sources checked 2026-10-09: Crowell: Colorado amends its non-compete law · Epstein Becker Green: 2026 state non-compete salary thresholds · J. J. Keller: Colorado final paycheck. Laws change; confirm the current rule before relying on it.
What ClauseAudit checks in a Colorado employment contract
- Non-compete enforceability under Colorado law and whether the scope is reasonable
- IP / invention-assignment scope and any personal-time carve-out
- Mandatory arbitration and class-action waiver
- At-will terms and asymmetric notice or severance
- Equity vesting, cliffs, and bad-leaver forfeiture
- Discretionary bonus criteria and clawback provisions
Colorado employment contract FAQ
Are non-competes enforceable in Colorado?
In Colorado, non-competes are enforceable only in limited circumstances under Colorado Revised Statutes §8-2-113. Void unless the worker earns above a high salary threshold and it protects trade secrets; since August 6, 2025 (SB 25-083) that exception no longer covers non-competes restricting doctors, advanced practice nurses or dentists. Strict notice rules and penalties apply.
Can my Colorado employer own inventions I make on my own time?
Colorado does not have a specific statute carving out personal-time inventions, so a broad IP-assignment clause can reach more of what you create. Read the assignment scope carefully and ask to limit it to work related to your job.
Do I have to sign a mandatory arbitration agreement in Colorado?
Colorado generally follows the federal rule that arbitration agreements are enforceable. Check whether the clause is mutual and whether it waives your right to a class action, and know that you are usually giving up the right to sue in court. Everywhere in the US, the federal Ending Forced Arbitration Act lets you take sexual harassment and sexual assault claims to court even if you signed one.
What makes a non-compete reasonable in Colorado?
Colorado does not set a presumptive maximum term, so reasonableness is assessed on the whole restriction rather than against a number: how long it runs, how much geography it covers, how broadly it defines the restricted activity, and whether it protects something the employer can genuinely claim an interest in. A restriction that is narrow on one of those and broad on the rest is still vulnerable.
What if I work in Colorado but my employer is in another state?
It matters, because Colorado's neighbours do not all treat non-competes the same way: Arizona (generally enforceable), Kansas (generally enforceable), Nebraska (generally enforceable), New Mexico (generally enforceable), Oklahoma (void), Utah (generally enforceable). Which state's law applies turns on the governing-law and venue clauses in your contract and on where the work is actually performed, so those two clauses are worth reading closely before you sign.
Does it help that Oklahoma voids non-competes?
Only if that state's law actually applies to you. Living next to Oklahoma does not import its rule into a Colorado contract. What governs is the contract's choice-of-law clause and where you perform the work, which is exactly why those clauses deserve attention.
If a Colorado non-compete is too broad, does it get narrowed or thrown out?
Courts may rewrite an overbroad restriction to something reasonable. That cuts against you: an employer has little to lose by drafting wide, because a court can pare the clause back rather than discard it. Negotiating the wording before signing matters more here than in states where an overbroad clause simply fails.
What else should I check in a Colorado employment contract?
Beyond the non-compete: how invention assignment is worded and whether it reaches work done on your own time; whether disputes go to arbitration and whether class actions are waived; whether notice periods are symmetrical between you and the employer; and how any equity vests, including what happens if you leave before a cliff.
What pay counts toward Colorado's non-compete threshold?
The test looks at annualized cash compensation, not benefits. Because it applies both when you sign and when enforcement is attempted, a pay cut or a smaller cash package after signing can leave the covenant void. Check the figure published for the year you sign and the year your employer would try to enforce it.
Can a Colorado employer refuse to pay out my unused vacation?
Not for vacation you have earned. Colorado treats earned vacation as wages that must be paid at separation under C.R.S. 8-4-109, and the Colorado Supreme Court has held that a policy forfeiting it is not enforceable. If payment is late, a written demand starts a 14-day window, after which statutory penalties can be added.
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Colorado: the governing law
- Statute
Colo. Rev. Stat. § 8-2-113- If the clause is too broad
- Courts may rewrite an overbroad restriction to something reasonable.
Statute and reformation approach from Beck Reed Riden LLP, Employee Noncompetes: A State-by-State Survey, 2026-01-21. Verify against the current text before relying on it.
How Colorado compares with neighbouring states
Colorado does not treat non-competes the same way as every state it borders, which matters when a contract names another state's law. 6 of its 7 neighbours take a different approach.
Nationally: 4 jurisdictions treat employee non-competes as void, 13 allow them only in limited circumstances, and 34 generally enforce them if reasonable.
State law summarized as of 2026-10-09; statutes change frequently. This is Automated educational information, not legal advice. Always consult a qualified Colorado attorney before signing.