Are employers allowed to require employees to sign a non-compete agreement?

In Colorado, employers are allowed to require employees to sign a non-compete agreement, also known as a restrictive covenant, as long as it meets certain criteria and does not conflict with any Wage and Hour Laws. A non-compete agreement is a contract between an employer and employee that prohibits the employee from competing with the employer in some form, such as working for a competitor or starting their own business. For a non-compete agreement to be legally binding in Colorado, the agreement should be in writing, express an employer’s legitimate business interests, and be tailored to the employee’s specific job and amount of time they have been employed. The agreement must also be reasonable in terms of the geographic area and length of time the employee is restricted from competing in order for it to be enforced. Non-competes that are more than two years in length or that cover more than a 20-mile radius from the employee’s workplace are generally deemed to be overly restrictive and unenforceable. Employers must also make sure that the non-compete agreement does not conflict with Colorado Wage and Hour Laws, for example by prohibiting an employee from working for any competitor in a given sector or region. Additionally, employers must provide reasonable compensation in exchange for the employee’s agreement not to compete. If an employee is asked to sign a non-compete agreement, they should be sure to read it carefully and consult an attorney if they have any questions about its enforceability.

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Are employers allowed to require employees to sign a non-compete agreement?

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