CO
Colorado House Bill HB1216

Colorado 2022 Regular Session

Colorado House Bill HB1216 Compare Versions

Only one version of the bill is available at this time.
OldNewDifferences
11 Second Regular Session
22 Seventy-third General Assembly
33 STATE OF COLORADO
44 INTRODUCED
55
66
77 LLS NO. 22-0690.01 Yelana Love x2295
88 HOUSE BILL 22-1216
99 House Committees Senate Committees
1010 Judiciary
1111 A BILL FOR AN ACT
1212 C
1313 ONCERNING THE REGULATION OF RESTRICTIVE EMPLOYMENT101
1414 AGREEMENTS THROUGH THE ENACTMENT OF THE "UNIFORM102
1515 R
1616 ESTRICTIVE EMPLOYMENT AGREEMENT ACT".103
1717 Bill Summary
1818 (Note: This summary applies to this bill as introduced and does
1919 not reflect any amendments that may be subsequently adopted. If this bill
2020 passes third reading in the house of introduction, a bill summary that
2121 applies to the reengrossed version of this bill will be available at
2222 http://leg.colorado.gov/
2323 .)
2424 Colorado Commission on Uniform State Laws. The bill enacts
2525 the "Uniform Restrictive Employment Agreement Act" as drafted by the
2626 Uniform Law Commission, which regulates agreements between an
2727 employer and a worker or employee that prohibit or limit the worker or
2828 employee from working after the work relationship with the employer
2929 HOUSE SPONSORSHIP
3030 Tipper,
3131 SENATE SPONSORSHIP
3232 Bridges,
3333 Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
3434 Capital letters or bold & italic numbers indicate new material to be added to existing statute.
3535 Dashes through the words indicate deletions from existing statute. ends.
3636 The bill:
3737 ! Regulates all restrictive post-employment agreements,
3838 including noncompete agreements, confidentiality
3939 agreements, no-business agreements, nonsolicitation
4040 agreements, no-recruit agreements,
4141 payment-for-competition agreements, and training
4242 reimbursements agreements;
4343 ! Prohibits noncompete agreements and all other restrictive
4444 agreements, except confidentiality agreements and
4545 training-reimbursement agreements, for low-wage workers,
4646 defined as those making less than the state's annual mean
4747 wage;
4848 ! Requires advance notice and other procedural requirements
4949 for an enforceable noncompete agreement or other
5050 restrictive agreement; and
5151 ! Creates penalties and enforcement by the state as well as
5252 private rights of action.
5353 Be it enacted by the General Assembly of the State of Colorado:1
5454 SECTION 1. In Colorado Revised Statutes, add part 3 to article2
5555 2 of title 8 as follows:3
5656 PART 34
5757 UNIFORM RESTRICTIVE5
5858 EMPLOYMENT AGREEMENT ACT6
5959 8-2-301. Short title. T
6060 HIS PART 3 IS THE "UNIFORM RESTRICTIVE7
6161 E
6262 MPLOYMENT AGREEMENT ACT".8
6363 8-2-302. Definitions. A
6464 S USED IN THIS PART 3:9
6565 (1) "C
6666 ONFIDENTIALITY AGREEMENT " MEANS A RESTRICTIVE10
6767 EMPLOYMENT AGREEMENT THAT :11
6868 (a) P
6969 ROHIBITS A WORKER FROM USING OR DISCLOSING12
7070 INFORMATION; AND13
7171 (b) I
7272 S NOT A CONDITION OF SETTLEMENT OR OTHER RESOLUTION OF14
7373 A DISPUTE.15
7474 HB22-1216-2- (2) "ELECTRONIC" MEANS RELATING TO TECHNOLOGY HAVING1
7575 ELECTRICAL, DIGITAL, MAGNETIC , WIRELESS , OPTICAL,2
7676 ELECTROMAGNETIC, OR SIMILAR CAPABILITIES.3
7777 (3) "E
7878 MPLOYER" MEANS A PERSON THAT HIRES OR CONTRACTS4
7979 WITH A WORKER TO WORK FOR THE PERSON .5
8080 (4) "N
8181 O-BUSINESS AGREEMENT " MEANS A RESTRICTIVE6
8282 EMPLOYMENT AGREEMENT THAT PROHIBITS A WORKER FROM WORKING7
8383 FOR A CLIENT OR CUSTOMER OF THE EMPLOYER .8
8484 (5) "N
8585 ONCOMPETE AGREEMENT " MEANS A RESTRICTIVE9
8686 EMPLOYMENT AGREEMENT THAT PROHIBITS A WORKER FROM WORKING10
8787 OTHER THAN FOR THE EMPLOYER . THE TERM DOES NOT INCLUDE A11
8888 NO-BUSINESS AGREEMENT.12
8989 (6) "N
9090 ONSOLICITATION AGREEMENT " MEANS A RESTRICTIVE13
9191 EMPLOYMENT AGREEMENT THAT PROHIBITS A WORKER FROM SOLICITING14
9292 A CLIENT OR CUSTOMER OF THE EMPLOYER .15
9393 (7) "N
9494 O-RECRUIT AGREEMENT " MEANS A RESTRICTIVE16
9595 EMPLOYMENT AGREEMENT THAT PROHIBITS A WORKER FROM HIRING OR17
9696 RECRUITING ANOTHER WORKER OF THE EMPLOYER .18
9797 (8) "P
9898 AYMENT-FOR-COMPETITION AGREEMENT " MEANS A19
9999 RESTRICTIVE EMPLOYMENT AGREEMENT THAT IMPOSES AN ADVERSE20
100100 FINANCIAL CONSEQUENCE ON A WORKER FOR WORKING OTHER THAN FOR21
101101 THE EMPLOYER BUT DOES NOT EXPRESSLY PROHIBIT THE WORK .22
102102 (9) "P
103103 ERSON" MEANS AN INDIVIDUAL , ESTATE, BUSINESS OR23
104104 NONPROFIT ENTITY, OR OTHER LEGAL ENTITY . THE TERM DOES NOT24
105105 INCLUDE A PUBLIC CORPORATION OR GOVERNMENT OR GOVERNMENTAL25
106106 SUBDIVISION, AGENCY, OR INSTRUMENTALITY.26
107107 (10) "R
108108 ECORD" MEANS INFORMATION:27
109109 HB22-1216
110110 -3- (a) INSCRIBED ON A TANGIBLE MEDIUM ; OR1
111111 (b) S
112112 TORED IN AN ELECTRONIC OR OTHER MEDIUM AND2
113113 RETRIEVABLE IN PERCEIVABLE FORM .3
114114 (11) "R
115115 ESTRICTIVE EMPLOYMENT AGREEMENT " MEANS AN4
116116 AGREEMENT OR PART OF ANOTHER AGREEMENT BETWEEN AN EMPLOYER5
117117 AND WORKER THAT PROHIBITS, LIMITS, OR SETS A CONDITION ON WORKING6
118118 OTHER THAN FOR THE EMPLOYER AFTER THE WORK RELATIONSHIP ENDS OR7
119119 A SALE OF A BUSINESS IS CONSUMMATED . THE TERM INCLUDES A8
120120 CONFIDENTIALITY AGREEMENT , NO-BUSINESS AGREEMENT, NONCOMPETE9
121121 AGREEMENT, NONSOLICITATION AGREEMENT , NO-RECRUIT AGREEMENT,10
122122 PAYMENT-FOR-COMPETITION AGREEMENT , AND TRAINING-REPAYMENT11
123123 AGREEMENT.12
124124 (12) "S
125125 ALE OF A BUSINESS " MEANS A SALE , MERGER,13
126126 CONSOLIDATION, AMALGAMATION , REORGANIZATION , OR OTHER14
127127 TRANSACTION, HOWEVER DENOMINATED , OF:15
128128 (a) A
129129 LL OR PART OF A BUSINESS OR NONPROFIT ENTITY OR16
130130 ASSOCIATION, OR ALL OR PART OF ITS ASSETS; OR17
131131 (b) A
132132 SUBSTANTIAL OWNERSHIP INTEREST IN THE ENTITY OR18
133133 ASSOCIATION.19
134134 (13) "S
135135 IGN" MEANS, WITH PRESENT INTENT TO AUTHENTICATE OR20
136136 ADOPT A RECORD, TO:21
137137 (a) E
138138 XECUTE OR ADOPT A TANGIBLE SYMBOL ; OR22
139139 (b) A
140140 TTACH TO OR LOGICALLY ASSOCIATE WITH THE RECORD AN23
141141 ELECTRONIC SYMBOL, SOUND, OR PROCESS.24
142142 (14) "S
143143 IGNED AGREEMENT" MEANS A RESTRICTIVE EMPLOYMENT25
144144 AGREEMENT SIGNED BY THE WORKER AND EMPLOYER .26
145145 (15) "S
146146 PECIAL TRAINING" MEANS INSTRUCTION OR OTHER27
147147 HB22-1216
148148 -4- EDUCATION A WORKER RECEIVES FROM A SOURCE OTHER THAN THE1
149149 EMPLOYER THAT:2
150150 (a) I
151151 S DESIGNED TO ENHANCE THE ABILITY OF THE WORKER TO3
152152 PERFORM THE WORKER'S WORK;4
153153 (b) I
154154 S NOT NORMALLY RECEIVED BY OTHER WORKERS ; AND5
155155 (c) R
156156 EQUIRES A SIGNIFICANT AND IDENTIFIABLE EXPENDITURE BY6
157157 THE EMPLOYER DISTINCT FROM ORDINARY ON -THE-JOB TRAINING.7
158158 (16) "S
159159 TATED RATE OF PAY " MEANS THE COMPENSATION ,8
160160 CALCULATED ON AN ANNUALIZED BASIS , AN EMPLOYER AGREES TO PAY A9
161161 WORKER. THE TERM:10
162162 (a) I
163163 NCLUDES A WAGE , SALARY, PROFESSIONAL FEE, OTHER11
164164 COMPENSATION FOR PERSONAL SERVICE , AND THE FAIR MARKET VALUE OF12
165165 ALL REMUNERATION OTHER THAN CASH ; AND13
166166 (b) D
167167 OES NOT INCLUDE:14
168168 (I) A
169169 HEALTH-CARE BENEFIT, SEVERANCE PAY, RETIREMENT15
170170 BENEFIT, OR EXPENSE REIMBURSEMENT ;16
171171 (II) D
172172 ISTRIBUTION OF EARNINGS AND PROFIT THAT IS NOT17
173173 COMPENSATION FOR PERSONAL SERVICE ; OR18
174174 (III) A
175175 NTICIPATED BUT INDETERMINABLE COMPENSATION ,19
176176 INCLUDING A TIP, BONUS, OR COMMISSION.20
177177 (17) "T
178178 RADE SECRET" HAS THE SAME MEANING AS SET FORTH IN21
179179 SECTION 7-74-102 (4).22
180180 (18) "T
181181 RAINING-REPAYMENT AGREEMENT " MEANS A RESTRICTIVE23
182182 EMPLOYMENT AGREEMENT THAT REQUIRES A WORKER TO REPAY THE24
183183 EMPLOYER FOR TRAINING COSTS INCURRED BY THE EMPLOYER .25
184184 (19) "W
185185 ORK" MEANS PROVIDING SERVICE.26
186186 (20) "W
187187 ORKER" MEANS AN INDIVIDUAL WHO WORKS FOR AN27
188188 HB22-1216
189189 -5- EMPLOYER. THE TERM:1
190190 (a) I
191191 NCLUDES AN EMPLOYEE, INDEPENDENT CONTRACTOR, EXTERN,2
192192 INTERN, VOLUNTEER, APPRENTICE, SOLE PROPRIETOR WHO PROVIDES3
193193 SERVICE TO A CLIENT OR CUSTOMER, AND AN INDIVIDUAL WHO PROVIDES4
194194 SERVICE THROUGH A BUSINESS OR NONPROFIT ENTITY OR ASSOCIATION ;5
195195 (b) D
196196 OES NOT INCLUDE AN INDIVIDUAL, EVEN IF THE INDIVIDUAL6
197197 PERFORMS INCIDENTAL SERVICE FOR THE EMPLOYER , WHOSE SOLE7
198198 RELATIONSHIP WITH THE EMPLOYER IS AS:8
199199 (I) A
200200 MEMBER OF A BOARD OF DIRECTORS OR OTHER GOVERNING9
201201 OR ADVISORY BOARD;10
202202 (II) A
203203 N INDIVIDUAL UNDER WHOSE AUTHORITY THE POWERS OF A11
204204 BUSINESS OR NONPROFIT ENTITY OR ASSOCIATION ARE EXERCISED ;12
205205 (III) A
206206 N INVESTOR; OR13
207207 (IV) A
208208 VENDOR OF GOODS.14
209209 8-2-303. Scope. (1) T
210210 HIS PART 3 APPLIES TO A RESTRICTIVE15
211211 EMPLOYMENT AGREEMENT . IF A RESTRICTIVE EMPLOYMENT AGREEMENT16
212212 IS PART OF ANOTHER AGREEMENT , THIS PART 3 DOES NOT AFFECT OTHER17
213213 PARTS OF THE OTHER AGREEMENT .18
214214 (2) T
215215 HIS PART 3 SUPERSEDES COMMON LAW ONLY TO THE EXTENT19
216216 THAT IT APPLIES TO A RESTRICTIVE EMPLOYMENT AGREEMENT BUT20
217217 OTHERWISE DOES NOT AFFECT PRINCIPLES OF LAW AND EQUITY21
218218 CONSISTENT WITH THIS PART 3.22
219219 (3) T
220220 HIS PART 3 DOES NOT AFFECT AN AGREEMENT TO TAKE AN23
221221 ACTION SOLELY TO TRANSFER , PERFECT, OR ENFORCE A PATENT ,24
222222 COPYRIGHT, TRADE SECRET, OR SIMILAR RIGHT.25
223223 (4) T
224224 HIS PART 3 DOES NOT AFFECT A NONCOMPETITION26
225225 OBLIGATION ARISING SOLELY AS A RESULT OF AN EXISTING OWNERSHIP27
226226 HB22-1216
227227 -6- INTEREST IN A BUSINESS ENTITY.1
228228 (5) T
229229 HIS PART 3 DOES NOT AFFECT AN AGREEMENT THAT REQUIRES2
230230 A WORKER TO FORFEIT COMPENSATION AFTER THE WORK RELATIONSHIP3
231231 ENDS, INCLUDING VACATION OR RETIREMENT BENEFITS , THE RIGHT TO4
232232 WHICH ACCRUED BEFORE THE WORK RELATIONSHIP ENDS .5
233233 8-2-304. Notice requirements. (1) E
234234 XCEPT AS PROVIDED IN6
235235 SUBSECTION (5) OF THIS SECTION, A RESTRICTIVE EMPLOYMENT7
236236 AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS :8
237237 (a) T
238238 HE EMPLOYER PROVIDES A COPY OF THE PROPOSED9
239239 AGREEMENT IN A RECORD TO:10
240240 (I) S
241241 UBJECT TO SUBSECTION (2) OF THIS SECTION, A PROSPECTIVE11
242242 WORKER, AT LEAST FOURTEEN DAYS BEFORE THE PROSPECTIVE WORKER12
243243 ACCEPTS WORK OR COMMENCES WORK , WHICHEVER IS EARLIER;13
244244 (II) A
245245 CURRENT WORKER WHO RECEIVES A MATERIAL INCREASE IN14
246246 COMPENSATION, AT LEAST FOURTEEN DAYS BEFORE THE INCREASE OR THE15
247247 WORKER ACCEPTS A CHANGE IN JOB STATUS OR RESPONSIBILITIES ,16
248248 WHICHEVER IS EARLIER; OR17
249249 (III) A
250250 DEPARTING WORKER WHO IS GIVEN CONSIDERATION IN18
251251 ADDITION TO ANYTHING OF VALUE TO WHICH THE WORKER ALREADY IS19
252252 ENTITLED, AT LEAST FOURTEEN DAYS BEFORE THE AGREEMENT IS20
253253 REQUIRED TO BE SIGNED;21
254254 (b) W
255255 ITH THE COPY OF THE PROPOSED AGREEMENT PROVIDED22
256256 UNDER SUBSECTION (1)(a) OF THIS SECTION, THE EMPLOYER PROVIDES THE23
257257 WORKER IN A RECORD THE SEPARATE NOTICE , IN THE PREFERRED24
258258 LANGUAGE OF THE WORKER IF AVAILABLE , PRESCRIBED BY THE25
259259 DEPARTMENT OF LABOR AND EMPLOYMENT UNDER SUBSECTION (4) OF26
260260 THIS SECTION;27
261261 HB22-1216
262262 -7- (c) THE PROPOSED AGREEMENT AND THE SIGNED AGREEMENT1
263263 CLEARLY SPECIFY THE INFORMATION, TYPE OF WORK ACTIVITY, OR EXTENT2
264264 OF COMPETITION THAT THE AGREEMENT PROHIBITS , LIMITS, OR SETS3
265265 CONDITIONS ON AFTER THE WORK RELATIONSHIP ENDS ;4
266266 (d) T
267267 HE AGREEMENT IS IN A RECORD SEPARATELY SIGNED BY THE5
268268 WORKER AND EMPLOYER AND THE EMPLOYER PROMPTLY PROVIDES THE6
269269 WORKER A COPY OF THE SIGNED AGREEMENT ; AND7
270270 (e) S
271271 UBJECT TO SUBSECTION (3) OF THIS SECTION, THE EMPLOYER8
272272 PROVIDES AN ADDITIONAL COPY OF THE AGREEMENT TO THE WORKER , NOT9
273273 LATER THAN FOURTEEN DAYS AFTER THE WORKER , IN A RECORD,10
274274 REQUESTS A COPY, UNLESS THE EMPLOYER REASONABLY AND IN GOOD11
275275 FAITH IS UNABLE TO PROVIDE THE COPY NOT LATER THAN FOURTEEN DAYS12
276276 AFTER THE REQUEST AND THE WORKER IS NOT PREJUDICED BY THE DELAY .13
277277 (2) A
278278 WORKER MAY WAIVE THE FOURTEEN -DAY REQUIREMENT OF14
279279 SUBSECTION (1)(a)(I) OF THIS SECTION IF THE WORKER RECEIVES THE15
280280 SIGNED AGREEMENT BEFORE BEGINNING WORK . IF THE WORKER WAIVES16
281281 THE REQUIREMENT, THE WORKER MAY RESCIND THE ENTIRE EMPLOYMENT17
282282 AGREEMENT NOT LATER THAN FOURTEEN DAYS AFTER THE WORKER18
283283 RECEIVES THE AGREEMENT.19
284284 (3) A
285285 N EMPLOYER IS NOT REQUIRED UNDER SUBSECTION (1)(e) OF20
286286 THIS SECTION TO PROVIDE AN ADDITIONAL COPY OF THE AGREEMENT MORE21
287287 THAN ONCE DURING A CALENDAR YEAR .22
288288 (4) T
289289 HE DEPARTMENT OF LABOR AND EMPLOYMENT SHALL23
290290 PRESCRIBE THE NOTICE AN EMPLOYER MUST PROVIDE UNDER SUBSECTION24
291291 (1)(b)
292292 OF THIS SECTION. THE NOTICE MUST INFORM THE WORKER , IN25
293293 LANGUAGE AN AVERAGE READER CAN UNDERSTAND , OF THE26
294294 REQUIREMENTS OF THIS PART 3, INCLUDING THE REQUIREMENTS OF27
295295 HB22-1216
296296 -8- SUBSECTION (1) OF THIS SECTION AND SECTIONS 8-2-305 TO 8-2-314 AND1
297297 STATE THAT THIS PART 3 ESTABLISHES PENALTIES AGAINST AN EMPLOYER2
298298 THAT ENTERS INTO A PROHIBITED AGREEMENT . THE DEPARTMENT OF3
299299 LABOR AND EMPLOYMENT SHALL MAKE THE NOTICE AVAILABLE TO4
300300 EMPLOYERS ON ITS PUBLICLY ACCESSIBLE WEBSITE OR IN OTHER5
301301 APPROPRIATE WAYS. THE DEPARTMENT OF LABOR AND EMPLOYMENT MAY :6
302302 (a) P
303303 RODUCE A SEPARATE NOTICE FOR EACH TYPE OF RESTRICTIVE7
304304 EMPLOYMENT AGREEMENT ; AND8
305305 (b) T
306306 RANSLATE THE NOTICE INTO LANGUAGES OTHER THAN9
307307 E
308308 NGLISH USED BY A SUBSTANTIAL PORTION OF THE STATE 'S LABOR FORCE.10
309309 (5) T
310310 HIS SECTION DOES NOT APPLY TO A RESTRICTIVE11
311311 EMPLOYMENT AGREEMENT IN CONNECTION WITH THE SALE OF A BUSINESS12
312312 OF WHICH THE WORKER IS A SUBSTANTIAL OWNER AND CONSENTS TO THE13
313313 SALE.14
314314 8-2-305. Low-wage worker. (1) A
315315 RESTRICTIVE EMPLOYMENT15
316316 AGREEMENT, OTHER THAN A CONFIDENTIALITY AGREEMENT OR16
317317 TRAINING-REPAYMENT AGREEMENT , IS:17
318318 (a) P
319319 ROHIBITED AND UNENFORCEABLE IF , WHEN THE WORKER18
320320 SIGNS THE AGREEMENT, THE WORKER HAS A STATED RATE OF PAY LESS19
321321 THAN THE AN NUAL COMPENSATION THRESHOLD FOR HIGHLY20
322322 COMPENSATED WORKERS AS DETERMINED BY THE DIVISION OF LABOR21
323323 STANDARDS AND STATISTICS IN THE DEPARTMENT OF LABOR AND22
324324 EMPLOYMENT FOR PURPOSES OF MINIMUM WAGE AND OVERTIME23
325325 EXEMPTIONS; AND24
326326 (b) U
327327 NENFORCEABLE IF, AT ANY TIME DURING THE WORK25
328328 RELATIONSHIP, THE WORKER'S COMPENSATION FROM THE EMPLOYER ,26
329329 CALCULATED ON AN ANNUALIZED BASIS , IS LESS THAN THE COMPENSATION27
330330 HB22-1216
331331 -9- THRESHOLD FOR HIGHLY COMPENSATED WORKERS AS DETERMINED BY THE1
332332 DIVISION OF LABOR STANDARDS AND STATISTICS IN THE DEPARTMENT OF2
333333 LABOR AND EMPLOYMENT FOR PURPOSES OF MINIMUM WAGE AND3
334334 OVERTIME EXEMPTIONS.4
335335 8-2-306. Effect of termination of work. (1) A
336336 RESTRICTIVE5
337337 EMPLOYMENT AGREEMENT , OTHER THAN A CONFIDENTIALITY AGREEMENT6
338338 OR TRAINING-REPAYMENT AGREEMENT , IS UNENFORCEABLE IF:7
339339 (a) T
340340 HE WORKER RESIGNS FOR GOOD CAUSE ATTRIBUTABLE TO THE8
341341 EMPLOYER; OR9
342342 (b) T
343343 HE EMPLOYER TERMINATES THE WORKER FOR A REASON10
344344 OTHER THAN GROSS MISCONDUCT OR THE COMPLETION OF THE AGREED11
345345 WORK OR THE TERM OF THE CONTRACT .12
346346 8-2-307. Reasonableness requirement. A
347347 RESTRICTIVE13
348348 EMPLOYMENT AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS14
349349 IT IS REASONABLE.15
350350 8-2-308. Noncompete agreement. (1) A
351351 NONCOMPETE16
352352 AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS :17
353353 (a) T
354354 HE AGREEMENT PROTECTS ANY OF THE FOLLOWING18
355355 LEGITIMATE BUSINESS INTERESTS:19
356356 (I) T
357357 HE SALE OF A BUSINESS OF WHICH THE WORKER IS A20
358358 SUBSTANTIAL OWNER AND CONSENTS TO THE SALE ;21
359359 (II) T
360360 HE CREATION OF A BUSINESS IN WHICH THE WORKER IS A22
361361 SUBSTANTIAL OWNER;23
362362 (III) A
363363 TRADE SECRET; OR24
364364 (IV) A
365365 N ONGOING CLIENT OR CUSTOMER RELATIONSHIP OF THE25
366366 EMPLOYER;26
367367 (b) W
368368 HEN THE WORKER SIGNS THE AGREEMENT AND THROUGH THE27
369369 HB22-1216
370370 -10- TIME OF ENFORCEMENT , THE AGREEMENT IS NARROWLY TAILORED IN1
371371 DURATION, GEOGRAPHICAL AREA, AND SCOPE OF ACTUAL COMPETITION TO2
372372 PROTECT AN INTEREST UNDER SUBSECTION (1)(a) OF THIS SECTION, AND3
373373 THE INTEREST CANNOT BE PROTECTED ADEQUATELY BY ANOTHER4
374374 RESTRICTIVE EMPLOYMENT AGREEMENT ; AND5
375375 (c) T
376376 HE PROHIBITION ON COMPETITION LASTS NOT LONGER THAN :6
377377 (I) F
378378 IVE YEARS AFTER THE WORK RELATIONSHIP ENDS WHEN7
379379 PROTECTING AN INTEREST UNDER SUBSECTION (1)(a)(I) OR (1)(a)(II) OF8
380380 THIS SECTION; OR9
381381 (II) O
382382 NE YEAR AFTER THE WORK RELATIONSHIP ENDS WHEN10
383383 PROTECTING AN INTEREST UNDER SUBSECTION (1)(a)(III) OR (1)(a)(IV) OF11
384384 THIS SECTION BUT NOT AN INTEREST UNDER SUBSECTION (1)(a)(I) OR12
385385 (1)(a)(II)
386386 OF THIS SECTION.13
387387 8-2-309. Confidentiality agreement. (1) A
388388 CONFIDENTIALITY14
389389 AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS THE WORKER15
390390 MAY USE AND DISCLOSE INFORMATION THAT :16
391391 (a) A
392392 RISES FROM THE WORKER'S GENERAL TRAINING, KNOWLEDGE,17
393393 SKILL, OR EXPERIENCE, WHETHER GAINED ON THE JOB OR OTHERWISE ;18
394394 (b) I
395395 S READILY ASCERTAINABLE TO THE RELEVANT PUBLIC ; OR19
396396 (c) I
397397 S IRRELEVANT TO THE EMPLOYER'S BUSINESS.20
398398 8-2-310. No-business agreement. (1) A
399399 NO-BUSINESS21
400400 AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS THE22
401401 AGREEMENT:23
402402 (a) A
403403 PPLIES ONLY TO A PROSPECTIVE OR ONGOING CLIENT OR24
404404 CUSTOMER OF THE EMPLOYER WITH WHICH THE WORKER HAD WORKED25
405405 PERSONALLY; AND26
406406 (b) L
407407 ASTS NOT LONGER THAN SIX MONTHS AFTER THE WORK27
408408 HB22-1216
409409 -11- RELATIONSHIP BETWEEN THE EMPLOYER AND WORKER ENDS .1
410410 8-2-311. Nonsolicitation agreement. (1) A
411411 NONSOLICITATION2
412412 AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS THE3
413413 AGREEMENT:4
414414 (a) A
415415 PPLIES ONLY TO A PROSPECTIVE OR ONGOING CLIENT OR5
416416 CUSTOMER OF THE EMPLOYER WITH WHICH THE WORKER HAD WORKED6
417417 PERSONALLY; AND7
418418 (b) L
419419 ASTS NOT LONGER THAN ONE YEAR AFTER THE WORK8
420420 RELATIONSHIP BETWEEN THE EMPLOYER AND WORKER ENDS .9
421421 8-2-312. No-recruit agreement. (1)
422422 A NO-RECRUIT AGREEMENT10
423423 IS PROHIBITED AND UNENFORCEABLE UNLESS THE AGREEMENT :11
424424 (a) P
425425 ROHIBITS HIRING OR RECRUITING ONLY ANOTHER WORKER12
426426 CURRENTLY WORKING FOR THE EMPLOYER WITH WHOM THE WORKER HAD13
427427 WORKED PERSONALLY ; AND14
428428 (b) L
429429 ASTS NOT LONGER THAN SIX MONTHS AFTER THE WORK15
430430 RELATIONSHIP BETWEEN THE EMPLOYER AND WORKER ENDS .16
431431 8-2-313. Payment-for-competition agreement. (1) A17
432432 PAYMENT-FOR-COMPETITION AGREEMENT IS PROHIBITED AND18
433433 UNENFORCEABLE UNLESS THE AGREEMENT :19
434434 (a) I
435435 MPOSES A FINANCIAL CONSEQUENCE THAT IS NOT GREATER20
436436 THAN THE ACTUAL COMPETITIVE HARM TO THE EMPLOYER ; AND21
437437 (b) L
438438 ASTS NOT LONGER THAN ONE YEAR AFTER THE WORK22
439439 RELATIONSHIP BETWEEN THE EMPLOYER AND WORKER ENDS .23
440440 8-2-314. Training-repayment agreement. (1) A24
441441 TRAINING-REPAYMENT AGREEMENT IS PROHIBITED AND UNENFORCEABLE25
442442 UNLESS THE AGREEMENT:26
443443 (a) R
444444 EQUIRES REPAYMENT ONLY OF THE COST OF SPECIAL27
445445 HB22-1216
446446 -12- TRAINING;1
447447 (b) L
448448 ASTS NOT LONGER THAN TWO YEARS AFTER THE SPECIAL2
449449 TRAINING IS COMPLETED; AND3
450450 (c) P
451451 RORATES THE REPAYMENT FOR WORK DONE DURING THE4
452452 POST-TRAINING PERIOD.5
453453 8-2-315. Nonwaivability. E
454454 XCEPT AS PROVIDED IN SECTION6
455455 8-2-304
456456 (2) OR IN THE CONTEXT OF RESOLVING AN ISSUE IN LITIGATION OR7
457457 OTHER DISPUTE RESOLUTION, A PARTY TO A RESTRICTIVE EMPLOYMENT8
458458 AGREEMENT MAY NOT WAIVE A REQUIREMENT OF THIS PART 3 OR9
459459 STIPULATE TO A FACT TO AVOID A REQUIREMENT OF THIS PART 3.10
460460 8-2-316. Enforcement and remedy. (1) T
461461 HE COURT MAY NOT11
462462 MODIFY A RESTRICTIVE EMPLOYMENT AGREEMENT THAT RESTRICTS A12
463463 WORKER BEYOND A PERIOD IMPOSED UNDER THIS PART 3 TO MAKE THE13
464464 AGREEMENT ENFORCEABLE . THE COURT MAY MODIFY AN AGREEMENT14
465465 THAT OTHERWISE VIOLATES THIS PART 3 ONLY ON A FINDING THAT THE15
466466 EMPLOYER REASONABLY AND IN GOOD FAITH BELIEVED THE AGREEMENT16
467467 WAS ENFORCEABLE UNDER THIS PART 3 AND ONLY TO THE EXTENT17
468468 NECESSARY TO PROTECT THE EMPLOYER 'S INTEREST AND RENDER THE18
469469 AGREEMENT ENFORCEABLE .19
470470 (2) A
471471 WORKER WHO IS A PARTY TO A RESTRICTIVE EMPLOYMENT20
472472 AGREEMENT OR A SUBSEQUENT EMPLOYER THAT HAS HIRED OR IS21
473473 CONSIDERING HIRING THE WORKER MAY SEEK A DECLARATORY JUDGMENT22
474474 THAT THE AGREEMENT IS UNENFORCEABLE .23
475475 (3) I
476476 N ADDITION TO OTHER JUDICIAL REMEDIES , A COURT MAY24
477477 AWARD STATUTORY DAMAGES UNDER SUBSECTION (5) OF THIS SECTION25
478478 AND, IN A PRIVATE ACTION, REASONABLE ATTORNEY FEES TO A PARTY26
479479 THAT SUCCESSFULLY CHALLENGES OR DEFENDS AGAINST THE27
480480 HB22-1216
481481 -13- ENFORCEABILITY OF A RESTRICTIVE EMPLOYMENT AGREEMENT OR PROVES1
482482 A VIOLATION OF THIS PART 3.2
483483 (4) A
484484 N EMPLOYER SEEKING TO ENFORCE A RESTRICTIVE3
485485 EMPLOYMENT AGREEMENT HAS THE BURDEN OF PROVING COMPLIANCE4
486486 WITH THIS PART 3.5
487487 (5) A
488488 N EMPLOYER THAT ENTERS A RESTRICTIVE EMPLOYMENT6
489489 AGREEMENT THAT THE EMPLOYER KNOWS OR REAS ONABLY SHOULD KNOW7
490490 IS PROHIBITED BY THIS PART 3 COMMITS A CIVIL VIOLATION . THE8
491491 DEPARTMENT OF LABOR AND EMPLOYMENT OR THE ATTORNEY GENERAL9
492492 MAY BRING AN ACTION ON BEHALF OF THE WORKER , OR THE WORKER MAY10
493493 BRING A PRIVATE ACTION, AGAINST THE EMPLOYER TO ENFORCE THIS11
494494 SUBSECTION (5). THE COURT MAY AWARD STATUTORY DAMAGES OF NOT12
495495 MORE THAN FIVE THOUSAND DOLLARS PER WORKER PER AGREEMENT FOR13
496496 EACH VIOLATION OF THIS SUBSECTION (5).14
497497 8-2-317. Choice of law and venue. (1) A
498498 CHOICE OF LAW15
499499 PROVISION THAT APPLIES TO A RESTRICTIVE EMPLOYMENT AGREEMENT IS16
500500 PROHIBITED AND UNENFORCEABLE UNLESS IT REQUIRES THAT A DISPUTE17
501501 ARISING UNDER THE AGREEMENT BE GOVERNED BY THE LAW OF THE18
502502 JURISDICTION WHERE THE WORKER PRIMARILY WORKS FOR THE EMPLOYER19
503503 OR, IF THE WORK RELATIONSHIP HAS ENDED, THE JURISDICTION WHERE THE20
504504 WORKER PRIMARILY WORKED WHEN THE RELATIONSHIP ENDED .21
505505 (2) A
506506 CHOICE OF VENUE PROVISION THAT APPLIES TO A22
507507 RESTRICTIVE EMPLOYMENT AGREEMENT IS PROHIBITED AND23
508508 UNENFORCEABLE UNLESS IT REQUIRES THAT A DISPUTE ARISING UNDER24
509509 THE AGREEMENT BE DECIDED IN A JURISDICTION WHERE :25
510510 (a) T
511511 HE WORKER PRIMARILY WORKS OR , IF THE WORK26
512512 RELATIONSHIP HAS ENDED , A JURISDICTION WHERE THE WORKER27
513513 HB22-1216
514514 -14- PRIMARILY WORKED WHEN THE RELATIONSHIP ENDED ; OR1
515515 (b) T
516516 HE WORKER RESIDES AT THE TIME OF THE DISPUTE .2
517517 8-2-318. Uniformity of application and construction. I
518518 N3
519519 APPLYING AND CONSTRUING THIS PART 3, A COURT SHALL CONSIDER THE4
520520 PROMOTION OF UNIFORMITY OF THE LAW AMONG JURISDICTIONS THAT5
521521 ENACT IT.6
522522 8-2-319. Saving provision. E
523523 XCEPT AS PROVIDED IN SECTION7
524524 8-2-320,
525525 THIS PART 3 DOES NOT AFFECT THE VALIDITY OF A RESTRICTIVE8
526526 EMPLOYMENT AGREEMENT IN EFFECT BEFORE THE EFFECTIVE DATE OF THIS9
527527 PART 3.10
528528 8-2-320. Transitional provision. S
529529 ECTIONS 8-2-304 (1)(e) AND11
530530 8-2-305
531531 APPLY TO A RESTRICTIVE EMPLOYMENT AGREEMENT ENTERED12
532532 INTO BEFORE, ON, OR AFTER THE EFFECTIVE DATE OF THIS PART 3.13
533533 SECTION 2. In Colorado Revised Statutes, 8-2-113, repeal (2)14
534534 and (3) as follows:15
535535 8-2-113. Unlawful to intimidate worker - agreement not to16
536536 compete. (2) Any covenant not to compete which restricts the right of
537537 17
538538 any person to receive compensation for performance of skilled or18
539539 unskilled labor for any employer shall be void, but this subsection (2)19
540540 shall not apply to:20
541541 (a) Any contract for the purchase and sale of a business or the21
542542 assets of a business;22
543543 (b) Any contract for the protection of trade secrets;23
544544 (c) Any contractual provision providing for recovery of the24
545545 expense of educating and training an employee who has served an25
546546 employer for a period of less than two years;26
547547 (d) Executive and management personnel and officers and27
548548 HB22-1216
549549 -15- employees who constitute professional staff to executive and management1
550550 personnel.2
551551 (3) (a) Any covenant not to compete provision of an employment,3
552552 partnership, or corporate agreement between physicians that restricts the4
553553 right of a physician to practice medicine, as defined in section5
554554 12-240-107, upon termination of the agreement, is void; except that all6
555555 other provisions of the agreement enforceable at law, including7
556556 provisions that require the payment of damages in an amount that is8
557557 reasonably related to the injury suffered by reason of termination of the9
558558 agreement, are enforceable. Provisions of a covenant not to compete that10
559559 require the payment of damages upon termination of the agreement may11
560560 include damages related to competition.12
561561 (b) Notwithstanding subsection (3)(a) of this section, after13
562562 termination of an agreement described in subsection (3)(a) of this section,14
563563 a physician may disclose his or her continuing practice of medicine and15
564564 new professional contact information to any patient with a rare disorder,16
565565 as defined in accordance with criteria developed by the National17
566566 Organization for Rare Disorders, Inc., or a successor organization, to18
567567 whom the physician was providing consultation or treatment before19
568568 termination of the agreement. Neither the physician nor the physician's20
569569 employer, if any, is liable to any party to the prior agreement for damages21
570570 alleged to have resulted from the disclosure or from the physician's22
571571 treatment of the patient after termination of the prior agreement.23
572572 SECTION 3. Act subject to petition - effective date -24
573573 applicability. (1) This act takes effect at 12:01 a.m. on the day following25
574574 the expiration of the ninety-day period after final adjournment of the26
575575 general assembly; except that, if a referendum petition is filed pursuant27
576576 HB22-1216
577577 -16- to section 1 (3) of article V of the state constitution against this act or an1
578578 item, section, or part of this act within such period, then the act, item,2
579579 section, or part will not take effect unless approved by the people at the3
580580 general election to be held in November 2022 and, in such case, will take4
581581 effect on the date of the official declaration of the vote thereon by the5
582582 governor.6
583583 (2) This act applies to agreements entered into or renewed on or7
584584 after the applicable effective date of this act.8
585585 HB22-1216
586586 -17-