Colorado Law On Non-Compete Agreement
Therefore, when developing a non-compete agreement under trade secrecy, the employer should ensure that the restrictions focus on the protection of business secrecy and do not generally prohibit a worker from working for competitors and that he does not have an unlimited or excessive scope in the territory. You must then assess the time and geographic limits of the competition`s inconcognizability agreement. The adequacy of the duration is determined on the basis of the facts related to a specific non-competition agreement. For example, if a company has financial plans two years in advance, it would probably be reasonable to prevent a financial manager from competing with the company for up to two years. After two years, the CFO would no longer have information that would constitute an unfair competitive advantage if transferred to another company. With a few exceptions, non-competition prohibitions under Colorado law are generally difficult to enforce. Contractors should use this status as a guide to the development of their employment contracts to ensure that the non-compete clause is maintained (but a better choice is for a small business lawyer to develop the employment contract!) The most important thing an entrepreneur or franchisor could do if they believe they have a business secret is to document as much as possible the value of trade secrecy, the amount of time or resources it took to develop it, put in place measures to protect it and how unique it is. Getting each vendor and staff to sign a confidentiality clause to work in the field is a great way to show that steps have been taken to protect the information. In addition, the admission of managers who process information highlights restrictive measures to prevent others from obtaining information.
This element of protection is essential because if the information is accessible to anyone entering the place of business or known to the public, it is not a trade secret and therefore does not justify protection. So if you`ve signed one of these agreements or your employer is trying to get you to sign an agreement now, what do you do? Since non-competition agreements are contracts, the same defences that would nullify or render a contract unenforceable in the event of infringement also apply to non-competition clauses. In other words, a defence for the application of a treaty would also apply to the application of a non-compete clause. Examples of defences that apply to contracts are coercion, inappropriate influence and review has not been taken into account. See The Law of Trade Secrecy and Covenants Not to Compete in Colorado – Part II, 30 Colo.Law. 5 (2001). Unfortunately, the statutes and jurisprudence that govern non-compete bans in Colorado are, at best, vague. C.R.S. Section 8-2-113 boldly notes that it is illegal to use threats, violence or other means of intimidation to prevent a person from participating in legitimate employment. He adds: “Any non-compete contract that limits the right of any person to be compensated for having a skilled or unskilled workforce for an employer is cancelled.” This third exception to Colorado`s public policies against competition bans involves training workers. If you are an entrepreneur or franchisor who runs a business that requires paid training time, a non-compete clause is proven if you include in the employment contract a clause requiring reimbursement of training costs.