Non-Competition & Trade Secrets

Employers and employees, supervisors, managers, executives, and professionals may need to use, defend, enforce, or challenge a non-competition and/or trade secret agreement.

Murray Law welcomes the opportunity to represent employees and employers in matters involving non-competition and trade secret agreements.

Steven Murray has represented employees and employers in non-competition law, including evaluating agreements, and serving as counsel in temporary restraining order and preliminary injunction proceedings, as well as a full-scale trial on the enforceability of non-competition agreements.

Colorado Non-Competition Law

Non-competition agreements exist to prevent or limit former employees from competing against a prior employer by using knowledge acquired through the prior employer.

Employers may include non-solicitation provisions in non-competition agreements. The non-solicitation provision seeks to prohibit an employee from soliciting his or her former employer’s customers and/or employees, following the employee leaving the workforce of the former employer.

A key factor in evaluating any non-competition agreement is the enforceability of the agreement. For example, despite the fact an employer and employee signed the contract, the agreement is not enforceable unless the agreement satisfies the requirements of Colorado law or the state which controls the interpretation of the agreement.

State law is critical in evaluating non-competition agreements.

Colorado law prohibits non-compete agreements, however, the exceptions to the law provide avenues for enforceable non-competition agreements. Colorado law, C.R.S. Section 8-2-113(a)-(d), provides:

Any covenant not to compete which restricts the right of any person to receive compensation for performance of skilled or unskilled labor for any employer shall be void but this provision shall not apply to:

  • (a) Any contract for the purchase and sale of a business or the assets of a business;
  • (b) Any contract for the protection of trade secrets;
  • (c) Any contractual provision providing for the recovery of the expense of education and training an employee who has served an employer for a period of less than two years;
  • (d) Executive and managerial personnel and officers and employers who constitute professional staff to executive and management personnel.
Federal & Colorado Trade Secrets Law

On May 11, 2016, President Obama signed the Defend Trade Secrets Act [DTSA] into law. The DTSA, a federal law, creates a new claim for misappropriation of trade secrets. The DTSA specifically provides that it does not preempt state law.

The Colorado Uniform Trade Secrets Act addresses trade secrets and misappropriation. The holder of the trade secret may file a lawsuit against the person or entity misappropriating a protected trade secret.

In Colorado, the theft of a trade secret is recognized as a criminal offense.

Colorado courts rely on a multiple-factor analysis determine the enforceability of trade secrets agreements, including the trade secret exception to the Colorado non-competition law.

Conclusion

Murray Law welcomes the opportunity to counsel and represent employees and employers in matters involving the critical professional and business rights at issue in non-competition and trade secret agreements. Please call Steven Murray at 720-600-6642.

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