Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 22-0690.01 Yelana Love x2295
HOUSE BILL 22-1216
House Committees Senate Committees
Judiciary
A BILL FOR AN ACT
C
ONCERNING THE REGULATION OF RESTRICTIVE EMPLOYMENT101
AGREEMENTS THROUGH THE ENACTMENT OF THE "UNIFORM102
R
ESTRICTIVE EMPLOYMENT AGREEMENT ACT".103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov/
.)
Colorado Commission on Uniform State Laws. The bill enacts
the "Uniform Restrictive Employment Agreement Act" as drafted by the
Uniform Law Commission, which regulates agreements between an
employer and a worker or employee that prohibit or limit the worker or
employee from working after the work relationship with the employer
HOUSE SPONSORSHIP
Tipper,
SENATE SPONSORSHIP
Bridges,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute. ends.
The bill:
! Regulates all restrictive post-employment agreements,
including noncompete agreements, confidentiality
agreements, no-business agreements, nonsolicitation
agreements, no-recruit agreements,
payment-for-competition agreements, and training
reimbursements agreements;
! Prohibits noncompete agreements and all other restrictive
agreements, except confidentiality agreements and
training-reimbursement agreements, for low-wage workers,
defined as those making less than the state's annual mean
wage;
! Requires advance notice and other procedural requirements
for an enforceable noncompete agreement or other
restrictive agreement; and
! Creates penalties and enforcement by the state as well as
private rights of action.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add part 3 to article2
2 of title 8 as follows:3
PART 34
UNIFORM RESTRICTIVE5
EMPLOYMENT AGREEMENT ACT6
8-2-301. Short title. T
HIS PART 3 IS THE "UNIFORM RESTRICTIVE7
E
MPLOYMENT AGREEMENT ACT".8
8-2-302. Definitions. A
S USED IN THIS PART 3:9
(1) "C
ONFIDENTIALITY AGREEMENT " MEANS A RESTRICTIVE10
EMPLOYMENT AGREEMENT THAT :11
(a) P
ROHIBITS A WORKER FROM USING OR DISCLOSING12
INFORMATION; AND13
(b) I
S NOT A CONDITION OF SETTLEMENT OR OTHER RESOLUTION OF14
A DISPUTE.15
HB22-1216-2- (2) "ELECTRONIC" MEANS RELATING TO TECHNOLOGY HAVING1
ELECTRICAL, DIGITAL, MAGNETIC , WIRELESS , OPTICAL,2
ELECTROMAGNETIC, OR SIMILAR CAPABILITIES.3
(3) "E
MPLOYER" MEANS A PERSON THAT HIRES OR CONTRACTS4
WITH A WORKER TO WORK FOR THE PERSON .5
(4) "N
O-BUSINESS AGREEMENT " MEANS A RESTRICTIVE6
EMPLOYMENT AGREEMENT THAT PROHIBITS A WORKER FROM WORKING7
FOR A CLIENT OR CUSTOMER OF THE EMPLOYER .8
(5) "N
ONCOMPETE AGREEMENT " MEANS A RESTRICTIVE9
EMPLOYMENT AGREEMENT THAT PROHIBITS A WORKER FROM WORKING10
OTHER THAN FOR THE EMPLOYER . THE TERM DOES NOT INCLUDE A11
NO-BUSINESS AGREEMENT.12
(6) "N
ONSOLICITATION AGREEMENT " MEANS A RESTRICTIVE13
EMPLOYMENT AGREEMENT THAT PROHIBITS A WORKER FROM SOLICITING14
A CLIENT OR CUSTOMER OF THE EMPLOYER .15
(7) "N
O-RECRUIT AGREEMENT " MEANS A RESTRICTIVE16
EMPLOYMENT AGREEMENT THAT PROHIBITS A WORKER FROM HIRING OR17
RECRUITING ANOTHER WORKER OF THE EMPLOYER .18
(8) "P
AYMENT-FOR-COMPETITION AGREEMENT " MEANS A19
RESTRICTIVE EMPLOYMENT AGREEMENT THAT IMPOSES AN ADVERSE20
FINANCIAL CONSEQUENCE ON A WORKER FOR WORKING OTHER THAN FOR21
THE EMPLOYER BUT DOES NOT EXPRESSLY PROHIBIT THE WORK .22
(9) "P
ERSON" MEANS AN INDIVIDUAL , ESTATE, BUSINESS OR23
NONPROFIT ENTITY, OR OTHER LEGAL ENTITY . THE TERM DOES NOT24
INCLUDE A PUBLIC CORPORATION OR GOVERNMENT OR GOVERNMENTAL25
SUBDIVISION, AGENCY, OR INSTRUMENTALITY.26
(10) "R
ECORD" MEANS INFORMATION:27
HB22-1216
-3- (a) INSCRIBED ON A TANGIBLE MEDIUM ; OR1
(b) S
TORED IN AN ELECTRONIC OR OTHER MEDIUM AND2
RETRIEVABLE IN PERCEIVABLE FORM .3
(11) "R
ESTRICTIVE EMPLOYMENT AGREEMENT " MEANS AN4
AGREEMENT OR PART OF ANOTHER AGREEMENT BETWEEN AN EMPLOYER5
AND WORKER THAT PROHIBITS, LIMITS, OR SETS A CONDITION ON WORKING6
OTHER THAN FOR THE EMPLOYER AFTER THE WORK RELATIONSHIP ENDS OR7
A SALE OF A BUSINESS IS CONSUMMATED . THE TERM INCLUDES A8
CONFIDENTIALITY AGREEMENT , NO-BUSINESS AGREEMENT, NONCOMPETE9
AGREEMENT, NONSOLICITATION AGREEMENT , NO-RECRUIT AGREEMENT,10
PAYMENT-FOR-COMPETITION AGREEMENT , AND TRAINING-REPAYMENT11
AGREEMENT.12
(12) "S
ALE OF A BUSINESS " MEANS A SALE , MERGER,13
CONSOLIDATION, AMALGAMATION , REORGANIZATION , OR OTHER14
TRANSACTION, HOWEVER DENOMINATED , OF:15
(a) A
LL OR PART OF A BUSINESS OR NONPROFIT ENTITY OR16
ASSOCIATION, OR ALL OR PART OF ITS ASSETS; OR17
(b) A
SUBSTANTIAL OWNERSHIP INTEREST IN THE ENTITY OR18
ASSOCIATION.19
(13) "S
IGN" MEANS, WITH PRESENT INTENT TO AUTHENTICATE OR20
ADOPT A RECORD, TO:21
(a) E
XECUTE OR ADOPT A TANGIBLE SYMBOL ; OR22
(b) A
TTACH TO OR LOGICALLY ASSOCIATE WITH THE RECORD AN23
ELECTRONIC SYMBOL, SOUND, OR PROCESS.24
(14) "S
IGNED AGREEMENT" MEANS A RESTRICTIVE EMPLOYMENT25
AGREEMENT SIGNED BY THE WORKER AND EMPLOYER .26
(15) "S
PECIAL TRAINING" MEANS INSTRUCTION OR OTHER27
HB22-1216
-4- EDUCATION A WORKER RECEIVES FROM A SOURCE OTHER THAN THE1
EMPLOYER THAT:2
(a) I
S DESIGNED TO ENHANCE THE ABILITY OF THE WORKER TO3
PERFORM THE WORKER'S WORK;4
(b) I
S NOT NORMALLY RECEIVED BY OTHER WORKERS ; AND5
(c) R
EQUIRES A SIGNIFICANT AND IDENTIFIABLE EXPENDITURE BY6
THE EMPLOYER DISTINCT FROM ORDINARY ON -THE-JOB TRAINING.7
(16) "S
TATED RATE OF PAY " MEANS THE COMPENSATION ,8
CALCULATED ON AN ANNUALIZED BASIS , AN EMPLOYER AGREES TO PAY A9
WORKER. THE TERM:10
(a) I
NCLUDES A WAGE , SALARY, PROFESSIONAL FEE, OTHER11
COMPENSATION FOR PERSONAL SERVICE , AND THE FAIR MARKET VALUE OF12
ALL REMUNERATION OTHER THAN CASH ; AND13
(b) D
OES NOT INCLUDE:14
(I) A
HEALTH-CARE BENEFIT, SEVERANCE PAY, RETIREMENT15
BENEFIT, OR EXPENSE REIMBURSEMENT ;16
(II) D
ISTRIBUTION OF EARNINGS AND PROFIT THAT IS NOT17
COMPENSATION FOR PERSONAL SERVICE ; OR18
(III) A
NTICIPATED BUT INDETERMINABLE COMPENSATION ,19
INCLUDING A TIP, BONUS, OR COMMISSION.20
(17) "T
RADE SECRET" HAS THE SAME MEANING AS SET FORTH IN21
SECTION 7-74-102 (4).22
(18) "T
RAINING-REPAYMENT AGREEMENT " MEANS A RESTRICTIVE23
EMPLOYMENT AGREEMENT THAT REQUIRES A WORKER TO REPAY THE24
EMPLOYER FOR TRAINING COSTS INCURRED BY THE EMPLOYER .25
(19) "W
ORK" MEANS PROVIDING SERVICE.26
(20) "W
ORKER" MEANS AN INDIVIDUAL WHO WORKS FOR AN27
HB22-1216
-5- EMPLOYER. THE TERM:1
(a) I
NCLUDES AN EMPLOYEE, INDEPENDENT CONTRACTOR, EXTERN,2
INTERN, VOLUNTEER, APPRENTICE, SOLE PROPRIETOR WHO PROVIDES3
SERVICE TO A CLIENT OR CUSTOMER, AND AN INDIVIDUAL WHO PROVIDES4
SERVICE THROUGH A BUSINESS OR NONPROFIT ENTITY OR ASSOCIATION ;5
(b) D
OES NOT INCLUDE AN INDIVIDUAL, EVEN IF THE INDIVIDUAL6
PERFORMS INCIDENTAL SERVICE FOR THE EMPLOYER , WHOSE SOLE7
RELATIONSHIP WITH THE EMPLOYER IS AS:8
(I) A
MEMBER OF A BOARD OF DIRECTORS OR OTHER GOVERNING9
OR ADVISORY BOARD;10
(II) A
N INDIVIDUAL UNDER WHOSE AUTHORITY THE POWERS OF A11
BUSINESS OR NONPROFIT ENTITY OR ASSOCIATION ARE EXERCISED ;12
(III) A
N INVESTOR; OR13
(IV) A
VENDOR OF GOODS.14
8-2-303. Scope. (1) T
HIS PART 3 APPLIES TO A RESTRICTIVE15
EMPLOYMENT AGREEMENT . IF A RESTRICTIVE EMPLOYMENT AGREEMENT16
IS PART OF ANOTHER AGREEMENT , THIS PART 3 DOES NOT AFFECT OTHER17
PARTS OF THE OTHER AGREEMENT .18
(2) T
HIS PART 3 SUPERSEDES COMMON LAW ONLY TO THE EXTENT19
THAT IT APPLIES TO A RESTRICTIVE EMPLOYMENT AGREEMENT BUT20
OTHERWISE DOES NOT AFFECT PRINCIPLES OF LAW AND EQUITY21
CONSISTENT WITH THIS PART 3.22
(3) T
HIS PART 3 DOES NOT AFFECT AN AGREEMENT TO TAKE AN23
ACTION SOLELY TO TRANSFER , PERFECT, OR ENFORCE A PATENT ,24
COPYRIGHT, TRADE SECRET, OR SIMILAR RIGHT.25
(4) T
HIS PART 3 DOES NOT AFFECT A NONCOMPETITION26
OBLIGATION ARISING SOLELY AS A RESULT OF AN EXISTING OWNERSHIP27
HB22-1216
-6- INTEREST IN A BUSINESS ENTITY.1
(5) T
HIS PART 3 DOES NOT AFFECT AN AGREEMENT THAT REQUIRES2
A WORKER TO FORFEIT COMPENSATION AFTER THE WORK RELATIONSHIP3
ENDS, INCLUDING VACATION OR RETIREMENT BENEFITS , THE RIGHT TO4
WHICH ACCRUED BEFORE THE WORK RELATIONSHIP ENDS .5
8-2-304. Notice requirements. (1) E
XCEPT AS PROVIDED IN6
SUBSECTION (5) OF THIS SECTION, A RESTRICTIVE EMPLOYMENT7
AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS :8
(a) T
HE EMPLOYER PROVIDES A COPY OF THE PROPOSED9
AGREEMENT IN A RECORD TO:10
(I) S
UBJECT TO SUBSECTION (2) OF THIS SECTION, A PROSPECTIVE11
WORKER, AT LEAST FOURTEEN DAYS BEFORE THE PROSPECTIVE WORKER12
ACCEPTS WORK OR COMMENCES WORK , WHICHEVER IS EARLIER;13
(II) A
CURRENT WORKER WHO RECEIVES A MATERIAL INCREASE IN14
COMPENSATION, AT LEAST FOURTEEN DAYS BEFORE THE INCREASE OR THE15
WORKER ACCEPTS A CHANGE IN JOB STATUS OR RESPONSIBILITIES ,16
WHICHEVER IS EARLIER; OR17
(III) A
DEPARTING WORKER WHO IS GIVEN CONSIDERATION IN18
ADDITION TO ANYTHING OF VALUE TO WHICH THE WORKER ALREADY IS19
ENTITLED, AT LEAST FOURTEEN DAYS BEFORE THE AGREEMENT IS20
REQUIRED TO BE SIGNED;21
(b) W
ITH THE COPY OF THE PROPOSED AGREEMENT PROVIDED22
UNDER SUBSECTION (1)(a) OF THIS SECTION, THE EMPLOYER PROVIDES THE23
WORKER IN A RECORD THE SEPARATE NOTICE , IN THE PREFERRED24
LANGUAGE OF THE WORKER IF AVAILABLE , PRESCRIBED BY THE25
DEPARTMENT OF LABOR AND EMPLOYMENT UNDER SUBSECTION (4) OF26
THIS SECTION;27
HB22-1216
-7- (c) THE PROPOSED AGREEMENT AND THE SIGNED AGREEMENT1
CLEARLY SPECIFY THE INFORMATION, TYPE OF WORK ACTIVITY, OR EXTENT2
OF COMPETITION THAT THE AGREEMENT PROHIBITS , LIMITS, OR SETS3
CONDITIONS ON AFTER THE WORK RELATIONSHIP ENDS ;4
(d) T
HE AGREEMENT IS IN A RECORD SEPARATELY SIGNED BY THE5
WORKER AND EMPLOYER AND THE EMPLOYER PROMPTLY PROVIDES THE6
WORKER A COPY OF THE SIGNED AGREEMENT ; AND7
(e) S
UBJECT TO SUBSECTION (3) OF THIS SECTION, THE EMPLOYER8
PROVIDES AN ADDITIONAL COPY OF THE AGREEMENT TO THE WORKER , NOT9
LATER THAN FOURTEEN DAYS AFTER THE WORKER , IN A RECORD,10
REQUESTS A COPY, UNLESS THE EMPLOYER REASONABLY AND IN GOOD11
FAITH IS UNABLE TO PROVIDE THE COPY NOT LATER THAN FOURTEEN DAYS12
AFTER THE REQUEST AND THE WORKER IS NOT PREJUDICED BY THE DELAY .13
(2) A
WORKER MAY WAIVE THE FOURTEEN -DAY REQUIREMENT OF14
SUBSECTION (1)(a)(I) OF THIS SECTION IF THE WORKER RECEIVES THE15
SIGNED AGREEMENT BEFORE BEGINNING WORK . IF THE WORKER WAIVES16
THE REQUIREMENT, THE WORKER MAY RESCIND THE ENTIRE EMPLOYMENT17
AGREEMENT NOT LATER THAN FOURTEEN DAYS AFTER THE WORKER18
RECEIVES THE AGREEMENT.19
(3) A
N EMPLOYER IS NOT REQUIRED UNDER SUBSECTION (1)(e) OF20
THIS SECTION TO PROVIDE AN ADDITIONAL COPY OF THE AGREEMENT MORE21
THAN ONCE DURING A CALENDAR YEAR .22
(4) T
HE DEPARTMENT OF LABOR AND EMPLOYMENT SHALL23
PRESCRIBE THE NOTICE AN EMPLOYER MUST PROVIDE UNDER SUBSECTION24
(1)(b)
OF THIS SECTION. THE NOTICE MUST INFORM THE WORKER , IN25
LANGUAGE AN AVERAGE READER CAN UNDERSTAND , OF THE26
REQUIREMENTS OF THIS PART 3, INCLUDING THE REQUIREMENTS OF27
HB22-1216
-8- SUBSECTION (1) OF THIS SECTION AND SECTIONS 8-2-305 TO 8-2-314 AND1
STATE THAT THIS PART 3 ESTABLISHES PENALTIES AGAINST AN EMPLOYER2
THAT ENTERS INTO A PROHIBITED AGREEMENT . THE DEPARTMENT OF3
LABOR AND EMPLOYMENT SHALL MAKE THE NOTICE AVAILABLE TO4
EMPLOYERS ON ITS PUBLICLY ACCESSIBLE WEBSITE OR IN OTHER5
APPROPRIATE WAYS. THE DEPARTMENT OF LABOR AND EMPLOYMENT MAY :6
(a) P
RODUCE A SEPARATE NOTICE FOR EACH TYPE OF RESTRICTIVE7
EMPLOYMENT AGREEMENT ; AND8
(b) T
RANSLATE THE NOTICE INTO LANGUAGES OTHER THAN9
E
NGLISH USED BY A SUBSTANTIAL PORTION OF THE STATE 'S LABOR FORCE.10
(5) T
HIS SECTION DOES NOT APPLY TO A RESTRICTIVE11
EMPLOYMENT AGREEMENT IN CONNECTION WITH THE SALE OF A BUSINESS12
OF WHICH THE WORKER IS A SUBSTANTIAL OWNER AND CONSENTS TO THE13
SALE.14
8-2-305. Low-wage worker. (1) A
RESTRICTIVE EMPLOYMENT15
AGREEMENT, OTHER THAN A CONFIDENTIALITY AGREEMENT OR16
TRAINING-REPAYMENT AGREEMENT , IS:17
(a) P
ROHIBITED AND UNENFORCEABLE IF , WHEN THE WORKER18
SIGNS THE AGREEMENT, THE WORKER HAS A STATED RATE OF PAY LESS19
THAN THE AN NUAL COMPENSATION THRESHOLD FOR HIGHLY20
COMPENSATED WORKERS AS DETERMINED BY THE DIVISION OF LABOR21
STANDARDS AND STATISTICS IN THE DEPARTMENT OF LABOR AND22
EMPLOYMENT FOR PURPOSES OF MINIMUM WAGE AND OVERTIME23
EXEMPTIONS; AND24
(b) U
NENFORCEABLE IF, AT ANY TIME DURING THE WORK25
RELATIONSHIP, THE WORKER'S COMPENSATION FROM THE EMPLOYER ,26
CALCULATED ON AN ANNUALIZED BASIS , IS LESS THAN THE COMPENSATION27
HB22-1216
-9- THRESHOLD FOR HIGHLY COMPENSATED WORKERS AS DETERMINED BY THE1
DIVISION OF LABOR STANDARDS AND STATISTICS IN THE DEPARTMENT OF2
LABOR AND EMPLOYMENT FOR PURPOSES OF MINIMUM WAGE AND3
OVERTIME EXEMPTIONS.4
8-2-306. Effect of termination of work. (1) A
RESTRICTIVE5
EMPLOYMENT AGREEMENT , OTHER THAN A CONFIDENTIALITY AGREEMENT6
OR TRAINING-REPAYMENT AGREEMENT , IS UNENFORCEABLE IF:7
(a) T
HE WORKER RESIGNS FOR GOOD CAUSE ATTRIBUTABLE TO THE8
EMPLOYER; OR9
(b) T
HE EMPLOYER TERMINATES THE WORKER FOR A REASON10
OTHER THAN GROSS MISCONDUCT OR THE COMPLETION OF THE AGREED11
WORK OR THE TERM OF THE CONTRACT .12
8-2-307. Reasonableness requirement. A
RESTRICTIVE13
EMPLOYMENT AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS14
IT IS REASONABLE.15
8-2-308. Noncompete agreement. (1) A
NONCOMPETE16
AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS :17
(a) T
HE AGREEMENT PROTECTS ANY OF THE FOLLOWING18
LEGITIMATE BUSINESS INTERESTS:19
(I) T
HE SALE OF A BUSINESS OF WHICH THE WORKER IS A20
SUBSTANTIAL OWNER AND CONSENTS TO THE SALE ;21
(II) T
HE CREATION OF A BUSINESS IN WHICH THE WORKER IS A22
SUBSTANTIAL OWNER;23
(III) A
TRADE SECRET; OR24
(IV) A
N ONGOING CLIENT OR CUSTOMER RELATIONSHIP OF THE25
EMPLOYER;26
(b) W
HEN THE WORKER SIGNS THE AGREEMENT AND THROUGH THE27
HB22-1216
-10- TIME OF ENFORCEMENT , THE AGREEMENT IS NARROWLY TAILORED IN1
DURATION, GEOGRAPHICAL AREA, AND SCOPE OF ACTUAL COMPETITION TO2
PROTECT AN INTEREST UNDER SUBSECTION (1)(a) OF THIS SECTION, AND3
THE INTEREST CANNOT BE PROTECTED ADEQUATELY BY ANOTHER4
RESTRICTIVE EMPLOYMENT AGREEMENT ; AND5
(c) T
HE PROHIBITION ON COMPETITION LASTS NOT LONGER THAN :6
(I) F
IVE YEARS AFTER THE WORK RELATIONSHIP ENDS WHEN7
PROTECTING AN INTEREST UNDER SUBSECTION (1)(a)(I) OR (1)(a)(II) OF8
THIS SECTION; OR9
(II) O
NE YEAR AFTER THE WORK RELATIONSHIP ENDS WHEN10
PROTECTING AN INTEREST UNDER SUBSECTION (1)(a)(III) OR (1)(a)(IV) OF11
THIS SECTION BUT NOT AN INTEREST UNDER SUBSECTION (1)(a)(I) OR12
(1)(a)(II)
OF THIS SECTION.13
8-2-309. Confidentiality agreement. (1) A
CONFIDENTIALITY14
AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS THE WORKER15
MAY USE AND DISCLOSE INFORMATION THAT :16
(a) A
RISES FROM THE WORKER'S GENERAL TRAINING, KNOWLEDGE,17
SKILL, OR EXPERIENCE, WHETHER GAINED ON THE JOB OR OTHERWISE ;18
(b) I
S READILY ASCERTAINABLE TO THE RELEVANT PUBLIC ; OR19
(c) I
S IRRELEVANT TO THE EMPLOYER'S BUSINESS.20
8-2-310. No-business agreement. (1) A
NO-BUSINESS21
AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS THE22
AGREEMENT:23
(a) A
PPLIES ONLY TO A PROSPECTIVE OR ONGOING CLIENT OR24
CUSTOMER OF THE EMPLOYER WITH WHICH THE WORKER HAD WORKED25
PERSONALLY; AND26
(b) L
ASTS NOT LONGER THAN SIX MONTHS AFTER THE WORK27
HB22-1216
-11- RELATIONSHIP BETWEEN THE EMPLOYER AND WORKER ENDS .1
8-2-311. Nonsolicitation agreement. (1) A
NONSOLICITATION2
AGREEMENT IS PROHIBITED AND UNENFORCEABLE UNLESS THE3
AGREEMENT:4
(a) A
PPLIES ONLY TO A PROSPECTIVE OR ONGOING CLIENT OR5
CUSTOMER OF THE EMPLOYER WITH WHICH THE WORKER HAD WORKED6
PERSONALLY; AND7
(b) L
ASTS NOT LONGER THAN ONE YEAR AFTER THE WORK8
RELATIONSHIP BETWEEN THE EMPLOYER AND WORKER ENDS .9
8-2-312. No-recruit agreement. (1)
A NO-RECRUIT AGREEMENT10
IS PROHIBITED AND UNENFORCEABLE UNLESS THE AGREEMENT :11
(a) P
ROHIBITS HIRING OR RECRUITING ONLY ANOTHER WORKER12
CURRENTLY WORKING FOR THE EMPLOYER WITH WHOM THE WORKER HAD13
WORKED PERSONALLY ; AND14
(b) L
ASTS NOT LONGER THAN SIX MONTHS AFTER THE WORK15
RELATIONSHIP BETWEEN THE EMPLOYER AND WORKER ENDS .16
8-2-313. Payment-for-competition agreement. (1) A17
PAYMENT-FOR-COMPETITION AGREEMENT IS PROHIBITED AND18
UNENFORCEABLE UNLESS THE AGREEMENT :19
(a) I
MPOSES A FINANCIAL CONSEQUENCE THAT IS NOT GREATER20
THAN THE ACTUAL COMPETITIVE HARM TO THE EMPLOYER ; AND21
(b) L
ASTS NOT LONGER THAN ONE YEAR AFTER THE WORK22
RELATIONSHIP BETWEEN THE EMPLOYER AND WORKER ENDS .23
8-2-314. Training-repayment agreement. (1) A24
TRAINING-REPAYMENT AGREEMENT IS PROHIBITED AND UNENFORCEABLE25
UNLESS THE AGREEMENT:26
(a) R
EQUIRES REPAYMENT ONLY OF THE COST OF SPECIAL27
HB22-1216
-12- TRAINING;1
(b) L
ASTS NOT LONGER THAN TWO YEARS AFTER THE SPECIAL2
TRAINING IS COMPLETED; AND3
(c) P
RORATES THE REPAYMENT FOR WORK DONE DURING THE4
POST-TRAINING PERIOD.5
8-2-315. Nonwaivability. E
XCEPT AS PROVIDED IN SECTION6
8-2-304
(2) OR IN THE CONTEXT OF RESOLVING AN ISSUE IN LITIGATION OR7
OTHER DISPUTE RESOLUTION, A PARTY TO A RESTRICTIVE EMPLOYMENT8
AGREEMENT MAY NOT WAIVE A REQUIREMENT OF THIS PART 3 OR9
STIPULATE TO A FACT TO AVOID A REQUIREMENT OF THIS PART 3.10
8-2-316. Enforcement and remedy. (1) T
HE COURT MAY NOT11
MODIFY A RESTRICTIVE EMPLOYMENT AGREEMENT THAT RESTRICTS A12
WORKER BEYOND A PERIOD IMPOSED UNDER THIS PART 3 TO MAKE THE13
AGREEMENT ENFORCEABLE . THE COURT MAY MODIFY AN AGREEMENT14
THAT OTHERWISE VIOLATES THIS PART 3 ONLY ON A FINDING THAT THE15
EMPLOYER REASONABLY AND IN GOOD FAITH BELIEVED THE AGREEMENT16
WAS ENFORCEABLE UNDER THIS PART 3 AND ONLY TO THE EXTENT17
NECESSARY TO PROTECT THE EMPLOYER 'S INTEREST AND RENDER THE18
AGREEMENT ENFORCEABLE .19
(2) A
WORKER WHO IS A PARTY TO A RESTRICTIVE EMPLOYMENT20
AGREEMENT OR A SUBSEQUENT EMPLOYER THAT HAS HIRED OR IS21
CONSIDERING HIRING THE WORKER MAY SEEK A DECLARATORY JUDGMENT22
THAT THE AGREEMENT IS UNENFORCEABLE .23
(3) I
N ADDITION TO OTHER JUDICIAL REMEDIES , A COURT MAY24
AWARD STATUTORY DAMAGES UNDER SUBSECTION (5) OF THIS SECTION25
AND, IN A PRIVATE ACTION, REASONABLE ATTORNEY FEES TO A PARTY26
THAT SUCCESSFULLY CHALLENGES OR DEFENDS AGAINST THE27
HB22-1216
-13- ENFORCEABILITY OF A RESTRICTIVE EMPLOYMENT AGREEMENT OR PROVES1
A VIOLATION OF THIS PART 3.2
(4) A
N EMPLOYER SEEKING TO ENFORCE A RESTRICTIVE3
EMPLOYMENT AGREEMENT HAS THE BURDEN OF PROVING COMPLIANCE4
WITH THIS PART 3.5
(5) A
N EMPLOYER THAT ENTERS A RESTRICTIVE EMPLOYMENT6
AGREEMENT THAT THE EMPLOYER KNOWS OR REAS ONABLY SHOULD KNOW7
IS PROHIBITED BY THIS PART 3 COMMITS A CIVIL VIOLATION . THE8
DEPARTMENT OF LABOR AND EMPLOYMENT OR THE ATTORNEY GENERAL9
MAY BRING AN ACTION ON BEHALF OF THE WORKER , OR THE WORKER MAY10
BRING A PRIVATE ACTION, AGAINST THE EMPLOYER TO ENFORCE THIS11
SUBSECTION (5). THE COURT MAY AWARD STATUTORY DAMAGES OF NOT12
MORE THAN FIVE THOUSAND DOLLARS PER WORKER PER AGREEMENT FOR13
EACH VIOLATION OF THIS SUBSECTION (5).14
8-2-317. Choice of law and venue. (1) A
CHOICE OF LAW15
PROVISION THAT APPLIES TO A RESTRICTIVE EMPLOYMENT AGREEMENT IS16
PROHIBITED AND UNENFORCEABLE UNLESS IT REQUIRES THAT A DISPUTE17
ARISING UNDER THE AGREEMENT BE GOVERNED BY THE LAW OF THE18
JURISDICTION WHERE THE WORKER PRIMARILY WORKS FOR THE EMPLOYER19
OR, IF THE WORK RELATIONSHIP HAS ENDED, THE JURISDICTION WHERE THE20
WORKER PRIMARILY WORKED WHEN THE RELATIONSHIP ENDED .21
(2) A
CHOICE OF VENUE PROVISION THAT APPLIES TO A22
RESTRICTIVE EMPLOYMENT AGREEMENT IS PROHIBITED AND23
UNENFORCEABLE UNLESS IT REQUIRES THAT A DISPUTE ARISING UNDER24
THE AGREEMENT BE DECIDED IN A JURISDICTION WHERE :25
(a) T
HE WORKER PRIMARILY WORKS OR , IF THE WORK26
RELATIONSHIP HAS ENDED , A JURISDICTION WHERE THE WORKER27
HB22-1216
-14- PRIMARILY WORKED WHEN THE RELATIONSHIP ENDED ; OR1
(b) T
HE WORKER RESIDES AT THE TIME OF THE DISPUTE .2
8-2-318. Uniformity of application and construction. I
N3
APPLYING AND CONSTRUING THIS PART 3, A COURT SHALL CONSIDER THE4
PROMOTION OF UNIFORMITY OF THE LAW AMONG JURISDICTIONS THAT5
ENACT IT.6
8-2-319. Saving provision. E
XCEPT AS PROVIDED IN SECTION7
8-2-320,
THIS PART 3 DOES NOT AFFECT THE VALIDITY OF A RESTRICTIVE8
EMPLOYMENT AGREEMENT IN EFFECT BEFORE THE EFFECTIVE DATE OF THIS9
PART 3.10
8-2-320. Transitional provision. S
ECTIONS 8-2-304 (1)(e) AND11
8-2-305
APPLY TO A RESTRICTIVE EMPLOYMENT AGREEMENT ENTERED12
INTO BEFORE, ON, OR AFTER THE EFFECTIVE DATE OF THIS PART 3.13
SECTION 2. In Colorado Revised Statutes, 8-2-113, repeal (2)14
and (3) as follows:15
8-2-113. Unlawful to intimidate worker - agreement not to16
compete. (2) Any covenant not to compete which restricts the right of
17
any person to receive compensation for performance of skilled or18
unskilled labor for any employer shall be void, but this subsection (2)19
shall not apply to:20
(a) Any contract for the purchase and sale of a business or the21
assets of a business;22
(b) Any contract for the protection of trade secrets;23
(c) Any contractual provision providing for recovery of the24
expense of educating and training an employee who has served an25
employer for a period of less than two years;26
(d) Executive and management personnel and officers and27
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personnel.2
(3) (a) Any covenant not to compete provision of an employment,3
partnership, or corporate agreement between physicians that restricts the4
right of a physician to practice medicine, as defined in section5
12-240-107, upon termination of the agreement, is void; except that all6
other provisions of the agreement enforceable at law, including7
provisions that require the payment of damages in an amount that is8
reasonably related to the injury suffered by reason of termination of the9
agreement, are enforceable. Provisions of a covenant not to compete that10
require the payment of damages upon termination of the agreement may11
include damages related to competition.12
(b) Notwithstanding subsection (3)(a) of this section, after13
termination of an agreement described in subsection (3)(a) of this section,14
a physician may disclose his or her continuing practice of medicine and15
new professional contact information to any patient with a rare disorder,16
as defined in accordance with criteria developed by the National17
Organization for Rare Disorders, Inc., or a successor organization, to18
whom the physician was providing consultation or treatment before19
termination of the agreement. Neither the physician nor the physician's20
employer, if any, is liable to any party to the prior agreement for damages21
alleged to have resulted from the disclosure or from the physician's22
treatment of the patient after termination of the prior agreement.23
SECTION 3. Act subject to petition - effective date -24
applicability. (1) This act takes effect at 12:01 a.m. on the day following25
the expiration of the ninety-day period after final adjournment of the26
general assembly; except that, if a referendum petition is filed pursuant27
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item, section, or part of this act within such period, then the act, item,2
section, or part will not take effect unless approved by the people at the3
general election to be held in November 2022 and, in such case, will take4
effect on the date of the official declaration of the vote thereon by the5
governor.6
(2) This act applies to agreements entered into or renewed on or7
after the applicable effective date of this act.8
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