First Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
REREVISED
This Version Includes All Amendments
Adopted in the Second House
LLS NO. 25-0275.01 Josh Schultz x5486
SENATE BILL 25-083
Senate Committees House Committees
Business, Labor, & Technology Business Affairs & Labor
A BILL FOR AN ACT
C
ONCERNING LIMITATIONS ON RESTRICTIVE EMPLOYMENT101
AGREEMENTS.102
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.)
Under current law, there is an exemption from the general
prohibition against covenants not to compete. The exemption allows for
a covenant not to compete under specified conditions governing an
individual who earns an amount of annualized cash compensation
equivalent to or greater than the threshold amount for highly compensated
HOUSE
3rd Reading Unamended
April 14, 2025
HOUSE
Amended 2nd Reading
April 11, 2025
SENATE
3rd Reading Unamended
March 12, 2025
SENATE
Amended 2nd Reading
March 11, 2025
SENATE SPONSORSHIP
Daugherty and Frizell, Bridges, Coleman, Cutter, Jodeh, Kipp, Snyder, Weissman, Winter
F.
HOUSE SPONSORSHIP
Brown and Garcia Sander, Boesenecker, Clifford, Lieder
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. workers. The bill excludes from the highly compensated worker
exemption a covenant not to compete that restricts the practice of
medicine, the practice of advanced practice registered nursing, or the
practice of dentistry in this state.
Under current law, there is also an exemption from the general
prohibition against covenants not to solicit customers (nonsolicitation
covenant) that allows for a nonsolicitation covenant governing an
individual who earns an amount of annualized cash compensation
equivalent to or greater than 60% of the threshold amount for highly
compensated workers if the nonsolicitation covenant is no broader than
reasonably necessary to protect the employer's legitimate interest in
protecting trade secrets. The bill also excludes from the highly
compensated worker exemption for nonsolicitation covenants a covenant
not to compete that restricts the practice of medicine, the practice of
advanced practice registered nursing, or the practice of dentistry.
A covenant not to compete governing an individual who has a
minority ownership share of a business and who received their ownership
share in the business as equity compensation or otherwise in connection
with services rendered is permissible if the covenant's duration in years
does not exceed a number calculated by the total consideration received
by the individual from the sale divided by the average annualized cash
compensation received by the individual from the business, including
income received on account of the individual's ownership interest during
the preceding 2 years or during the period of time that the individual was
affiliated with the business, whichever period of time is shorter.
The bill prohibits a covenant that prevents or materially restricts
a health-care provider from disclosing to a patient to whom the
health-care provider was providing consultation or treatment before the
health-care provider's departure from a medical practice the following
information:
! The health-care provider's continuing practice of medicine;
! The health-care provider's new professional contact
information; or
! The patient's right to choose a medical provider.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 8-2-113, amend2
(2)(a), (2)(b), (2)(c) introductory portion, (2)(c)(I), (2)(d), (3)(b), (3)(c),
3
(5), and (9)(a); and add (2)(c)(I.3), (2)(c)(I.4), (2)(c)(I.5), (2)(c)(I.6),4
083-2- (2)(c)(I.7), and (5.5) as follows:1
8-2-113. Unlawful to intimidate worker - agreement not to2
compete - prohibition - exceptions - notice - rules - definitions.3
(2) (a) Except as provided in subsections (2)(b), (2)(d), and (3) of this4
section, any A covenant not to compete that restricts the right of any5
person AN INDIVIDUAL to receive compensation for performance of labor6
for any employer is void.7
(b) E
XCEPT FOR A COVENANT NOT TO COMPETE THAT RESTRICTS8
THE PRACTICE OF MEDICINE , THE PRACTICE OF ADVANCED PRACTICE9
REGISTERED NURSING, OR THE PRACTICE OF DENTISTRY IN THIS STATE, this10
subsection (2) does not apply to a covenant not to compete governing a
11
person AN INDIVIDUAL who, at the time the covenant not to compete is12
entered into and at the time it is enforced, earns an amount of annualized13
cash compensation equivalent to or greater than the threshold amount for14
highly compensated workers, if the covenant not to compete is for the15
protection of trade secrets and is no broader than is reasonably necessary16
to protect the employer's legitimate interest in protecting trade secrets.17
(c) As used in this subsection (2) SECTION, UNLESS THE CONTEXT18
OTHERWISE REQUIRES:19
(I) "Annualized cash compensation" means:20
(A) The amount of the gross salary or wage amount, the fee21
amount, or the other compensation amount for the full year, if the person22
INDIVIDUAL was employed or engaged for a full year; OR23
(B) The compensation that the person INDIVIDUAL would have24
earned, based on the worker's gross salary or wage amount, fee, or other25
compensation if the worker was not employed or engaged for a full year.26
(I.3) "H
EALTH-CARE PROVIDER" MEANS AN INDIVIDUAL LICENSED27
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PRACTICE OF ADVANCED PRACTICE REGISTERED NURSING , LICENSED TO2
PRACTICE AS A CERTIFIED MIDWIFE , OR LICENSED TO ENGAGE IN THE3
PRACTICE OF DENTISTRY.4
(I.4) "P
RACTICE AS A CERTIFIED MIDWIFE" HAS THE MEANING SET
5
FORTH IN SECTION 12-255-104 (7.5).6
(I.5) "P
RACTICE OF ADVANCED PRACTICE REGISTERED NURSING "7
HAS THE MEANING SET FORTH IN SECTION 12-255-104 (8).8
(I.6) "P
RACTICE OF DENTISTRY" HAS THE SAME MEANING AS9
"
DENTISTRY" SET FORTH IN SECTION 12-220-104 (6).10
(I.7) "P
RACTICE OF MEDICINE" HAS THE MEANING SET FORTH IN11
SECTION 12-240-107 (1) AND INCLUDES PRACTICE AS A PHYSICIAN12
ASSISTANT PURSUANT TO SECTION 12-240-113.13
(d) E
XCEPT FOR A COVENANT NOT TO COMPETE THAT RESTRICTS14
THE PRACTICE OF MEDICINE, THE PRACTICE OF ADVANCED PRACTICE15
REGISTERED NURSING, OR THE PRACTICE OF DENTISTRY IN THIS STATE, this16
subsection (2) does not apply to a covenant not to solicit customers17
governing a person
AN INDIVIDUAL who, at the time the covenant is18
entered into and at the time it is enforced, earns an amount of annualized19
cash compensation equivalent to or greater than sixty percent of the20
threshold amount for highly compensated workers, if the nonsolicitation21
covenant is no broader than reasonably necessary to protect the22
employer's legitimate interest in protecting trade secrets.23
(3) The following covenants are not prohibited by subsection (2)24
of this section:25
(b) A reasonable confidentiality provision
OR TRADE SECRET
26
PROVISION relevant to the employer's business that does not prohibit27
083
-4- disclosure of information that arises from the worker's general training,1
knowledge, skill, or experience, whether gained on the job or otherwise,2
information that is readily ascertainable to the public, or information that3
a worker otherwise has a right to disclose as legally protected conduct;4
(c) A covenant for the purchase and sale of a business or the5
assets of a business; or NOT TO COMPETE RELATED TO THE PURCHASE AND6
SALE OF A BUSINESS, A DIRECT OR INDIRECT OWNERSHIP SHARE IN A7
BUSINESS, OR ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF A BUSINESS8
THAT RESTRICTS COMPETITION BY AN OWNER OF AN INTEREST IN THE9
BUSINESS. FOR AN INDIVIDUAL WHO OWNS A MINORITY OWNERSHIP SHARE10
OF THE BUSINESS AND WHO RECEIVED THEIR OWNERSHIP SHARE IN THE11
BUSINESS AS EQUITY COMPENSATION OR OTHERWISE IN CONNECTION WITH12
SERVICES RENDERED, THE DURATION IN YEARS OF A COVENANT NOT TO13
COMPETE DESCRIBED IN THIS SUBSECTION (3)(c) MUST NOT EXCEED A14
NUMBER CALCULATED BY THE TOTAL CONSIDERATION RECEIVED BY THE15
INDIVIDUAL FROM THE SALE DIVIDED BY THE AVERAGE ANNUALIZED CASH16
COMPENSATION RECEIVED BY THE INDIVIDUAL FROM THE BUSINESS ,17
INCLUDING INCOME RECEIVED ON ACCOUNT OF THEIR OWNERSHIP18
INTEREST DURING THE PRECEDING TWO YEARS OR DURING THE PERIOD OF19
TIME THAT THE INDIVIDUAL WAS AFFILIATED WITH THE BUSINESS ,20
WHICHEVER PERIOD OF TIME IS SHORTER.21
22
(5) (a) Any covenant not to compete provision of an employment,23
partnership, or corporate agreement between physicians that restricts the24
right of a physician to practice medicine, as defined in section25
12-240-107, upon termination of the agreement, is void; except that all26
other provisions of the agreement enforceable at law, including27
083
-5- provisions that require the payment of damages in an amount that is1
reasonably related to the injury suffered by reason of termination of the2
agreement, are enforceable. Provisions of a covenant not to compete that3
require the payment of damages upon termination of the agreement may4
include damages related to competition. A PROVISION OF AN EMPLOYMENT5
AGREEMENT OR ANY OTHER AGREEMENT ENFORCEABLE AT LAW THAT6
DOES NOT INCLUDE AN UNLAWFUL RESTRICTIVE COVENANT REMAINS7
ENFORCEABLE AND SUBJECT TO ANY DAMAGES OR EQUITABLE REMEDY8
OTHERWISE AVAILABLE AT LAW.9
(b) Notwithstanding subsection (5)(a) of this section, after10
termination of an agreement described in subsection (5)(a) of this section,11
a physician may disclose his or her continuing practice of medicine and12
new professional contact information to any patient with a rare disorder,13
as defined in accordance with criteria developed by the National14
Organization for Rare Disorders, Inc., or a successor organization, to15
whom the physician was providing consultation or treatment before16
termination of the agreement. Neither the physician nor the physician's17
employer, if any, is liable to any party to the prior agreement for damages18
alleged to have resulted from the disclosure or from the physician's19
treatment of the patient after termination of the prior agreement.20
(5.5) A
COVENANT IS DEEMED A COVENANT THAT RESTRICTS THE21
PRACTICE OF MEDICINE , THE PRACTICE OF ADVANCED PRACTICE22
REGISTERED NURSING, OR THE PRACTICE OF DENTISTRY IF IT PROHIBITS OR23
MATERIALLY RESTRICTS A HEALTH -CARE PROVIDER FROM DISCLOSING TO24
A PATIENT TO WHOM THE HEALTH -CARE PROVIDER WAS PROVIDING25
CONSULTATION OR TREATMENT BEFORE THE HEALTH -CARE PROVIDER'S26
DEPARTURE FROM A MEDICAL OR DENTAL PRACTICE THE FOLLOWING27
083
-6- INFORMATION:1
(a) T
HE HEALTH-CARE PROVIDER'S CONTINUING PRACTICE OF2
MEDICINE;3
(b) T
HE HEALTH-CARE PROVIDER'S NEW PROFESSIONAL CONTACT4
INFORMATION; OR5
(c) T
HE PATIENT'S RIGHT TO CHOOSE A HEALTH-CARE PROVIDER.6
(9) (a) The attorney general may enforce subsections (2), (3), (4),7
(5.5), (6), and (8)(a) of this section.8
SECTION 2. Act subject to petition - effective date -9
applicability. (1) This act takes effect at 12:01 a.m. on the day following10
the expiration of the ninety-day period after final adjournment of the11
general assembly; except that, if a referendum petition is filed pursuant12
to section 1 (3) of article V of the state constitution against this act or an13
item, section, or part of this act within such period, then the act, item,14
section, or part will not take effect unless approved by the people at the15
general election to be held in November 2026 and, in such case, will take16
effect on the date of the official declaration of the vote thereon by the17
governor.18
(2) This act applies to covenants not to compete entered into or19
renewed on or after the applicable effective date of this act.20
083
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