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Major Revisions to Colorado’s Non-Competition Law

By News

Colorado’s non-competition statute, C.R.S. 8-2-113, has long created confusion due to its seemingly simple but hotly contested exceptions to the state’s general prohibition on non-competition agreements. HB 22-1317, which was signed into law today, significantly changes Colorado non-compete law by eliminating or restricting two of the most-used non-compete exceptions, adding notice requirements, and additional penalties for enforcement of a void agreement. 

Removal of Exceptions 

 The managerial and professional staff exemption will be removed and replaced with an exception for the protection of trade secrets for highly compensated employees (HCE) as defined by the CDLE. HCEs are currently employees who earn a little more than $100,000 per year, and the new statute requires that the employee earn at this threshold both at the time the non-compete was signed and at the time the non-compete is enforced. The previous exception for trade secrets will now only apply if the HCE thresholds are met, and must also be no broader than reasonably necessary to protect those trade secrets.  

The non-competition statute will also permit an exception allowing a prohibition on the solicitation of customers by former employees who earn at least 60% of the HCE salary threshold if the non-compete is narrowly tailored to protect trade secrets.  

The law’s current requirement that restrictions be reasonable in time and geographic distance area remain, as do exceptions for recovering training costs or non-competition agreements signed upon the purchase or sale of a business.  

New Procedural and Notice Requirements 

The revised non-competition statute also adds a new notice requirement for employers in the form of a separate notice to employees that the employee is under a non-competition agreement and the terms of the non-compete. The employer must obtain the employee’s signature on the notice as well. Failure to provide notice will lead to the non-compete being found void.  

Penalties 

HB 1317 imposes potential liability against employers who attempt to enforce void non-compete agreements. The law provides for actual damages, reasonable costs, attorney’s fees, and statutory penalties of up to $5,000 per worker harmed. Given that non-compete litigation is often complex, fact-specific, and highly contentious, the addition of attorney’s fees and costs is likely to multiply the potential liability in non-compete cases by many times the actual damages at issue. 

Forum Selection and Choice of Law 

Finally, HB 1317 requires that non-compete agreements apply Colorado law and select Colorado as the forum state in order to be enforceable against any employee who either worked or resided in Colorado at the time of termination. This requirement addresses the common situation where a multi-state employer designates one favorable forum and choice of law for all employees.  

Takeaway 

The changes in HB 1317 will take effect on August 9, 2022. Although HB 1317 is prospective only, the scope of change to Colorado’s non-competition laws creates significant new hurdles to any employer looking to enforce non-competition agreements with former employees. 

If you have questions or need help navigating this area of employment law, please reach out to our firm or make an appointment here. We have significant experience drafting, negotiating, and litigating non-compete agreements. We welcome your suggestions for future topics as well. 

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*As always, subject to the usual disclaimers:  

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website may contain links to other third-party websites; such links are only for the convenience of the reader, user or browser. Tava Employment Law does not recommend or endorse the contents of the third-party sites. 

Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors, contributors, contributing law firms, or committee members and their respective employers.  

All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed. The content on this posting is provided “as is “and no representations are made that the content is error-free. 

Amendments to the Colorado Anti-Discrimination Act

By News, Updates

The last few weeks have seen a torrent of new employment laws pass in the Colorado legislature.  Today we will discuss the most recent changes to the Colorado Anti-Discrimination Act (CADA) today, and will be posting separately on changes to Colorado’s non-compete statute and Wage Claim Act very soon.

House Bill 22-1367 passed Monday night and makes multiple amendments to the Colorado Anti-Discrimination Act (CADA).  These changes include:

  • Expanding the definition of “employee” to include domestic workers;
  • Extending the amount of time an employee has to file a complaint of discrimination under CADA from 180 days to 300 days after the unfair employment practice took place; and
  • Expands remedies in age discrimination cases to match those available under all other protected classes.

These changes are notable and represent a significant expansion of rights and remedies for employees.

Domestic Employee Discrimination

First, there are an estimated 2.2 million domestic workers in the United States, and tens of thousands of domestic workers employed in Colorado.  Domestic workers are individuals who are employed by a household or individual to perform duties in private residences and therefore include nannies, housekeepers, home aides, and more.  CADA has historically exempted domestic workers from CADA’s definition of “employee” until now.

An expansion of CADA to include domestic workers will require potential employers to not discriminate, refuse to hire or promote, or fire or demote domestic employees because of their disability, race, creed, color, sex, sexual orientation, gender identity, gender expression, religion, age, national origin, family status, or ancestry.

Domestic employees may now file charges of discrimination with the Colorado Civil Rights Division (CCRD), and employers – that is, households – will be required to respond to the CCRD’s requests for information and interviews.

300 Day Filing Deadline

Under the previous version of CADA, employees had a maximum of 6 months, or 180 days, to file a charge of discrimination with the Colorado Civil Rights Division (CCRD) after a CADA violation or waive their claim.  Although 6 months may seem like a long period of time, the CCRD’s intake process for self-represented employees does not toll the clock on the 180-day deadline, and many employees do not become aware of the filing requirement until close to the deadline.

HB 1367’s amendment will extend the deadline to file complaints under CADA to 300 days, thereby matching the deadline to file complaints under federal law with the Equal Employment Opportunity Commission (EEOC).  This extension of time will allow more employees – and particularly employees of small businesses who may not have claims under federal laws – to file complaints, seek counsel, and initiate a CCRD investigation.

Expanded Remedies for Age Discrimination

Both state and federal laws have historically and ironically discriminated against plaintiffs bringing age discrimination claims by limiting the remedies under age claims.  Up until now, plaintiffs asserting age discrimination claims were barred from seeking punitive or compensatory damages under either CADA or the Age Discrimination in Employment Act (ADEA).

HB 1367 finally brings age claims in line with all other protected classes and will allow age discrimination plaintiffs to seek punitive and compensatory damages once signed, meaning that age discrimination plaintiffs will finally be able to receive compensation for emotional distress, medical treatment, inconvenience, and impairment of the quality of life.  These damages are often a substantial part of the damage sustained by plaintiffs in discrimination and retaliation cases and represent a significant increase in potential liability for employers.

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If you have questions or need help navigating this area of employment law, please reach out to Tava Employment Law here.  I welcome your suggestions for future topics as well.

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*As always, subject to the usual disclaimers: 

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information.  This website may contain links to other third-party websites; such links are only for the convenience of the reader, user or browser.  Tava Employment Law does not recommend or endorse the contents of the third-party sites.

Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.  No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction.  Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.  Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors, contributors, contributing law firms, or committee members and their respective employers. 

All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed.  The content on this posting is provided “as is”and no representations are made that the content is error-free.

Tava Employment Law Named One of the Best Colorado Springs Employment Law Firms

By News

We’re proud to have been named one of the best employment law firms in Colorado Springs by Expertise.com.  Expertise.com investigates and rates service providers based on availability, qualifications, reputation, experience, and professionalism, and makes local recommendations based on twenty-five variables across five categories.

Tava Employment Law is a boutique law firm focused on employment litigation, advising, and workplace investigations.  We represent and advise Colorado employees and employers on their rights, obligations, and options over the entire course of employment.  Please contact us at (719) 212-2890 if you are in need of employment law assistance.

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