Non-compete agreements (also known as covenants not to compete) are disfavored under Colorado law. But that does not mean all non-compete agreements are invalid. There are circumstances in which they are valid and enforceable. In recent years, Colorado courts have addressed some previously unanswered questions about non-compete agreements and Colorado law. In other words, things are a bit clearer than they were when I began practicing law. As a new attorney, one of the first cases I was involved in concerned trade secrets and the validity of a non-compete agreement, and I’ve seen many of them since then. 

 

A company’s legitimate trade secrets (as defined by law) are protected by Colorado law, even in the absence of any agreements, such as non-compete or non-disclosure agreements. Nevertheless, it is important that employees understand that the company values its trade secrets and will take appropriate measures to protect them. If the company has an employee handbook, it should include information about the company’s trade secrets. Alternatively, employees can sign a separate notice acknowledging the company’s policy regarding trade secrets and confidential information. In some circumstances a non-disclosure agreement is advisable and, in certain situations, a non-compete agreement might be appropriate.  

 

A common question is whether a salesperson can contact a former employer’s customers. For obvious reasons, the former employer would like to prevent that. Although customer lists can qualify as trade secrets, they often do not. If this – or any other trade secrets issue – is a concern, contact me. We can discuss what constitutes a trade secret under the law, and how you can protect yours. 

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