Colorado non-compete law: C.R.S. 8-2-113 for recruiters

Colorado voids most non-competes and then allows a narrow class back in: covenants with highly paid workers that protect trade secrets and go no further than necessary, plus a handful of listed exceptions. What makes Colorado different for recruiters is process. A permitted covenant is still void unless the worker got a separate, signed notice before accepting the offer; an employer that even presents a void covenant to a prospective worker faces a $5,000 penalty per worker; and a company "considering hiring" someone can ask a court to declare that person's non-compete unenforceable.

The general screen is in non-compete questions for candidates. The agency and client clauses are in non-solicitation clauses for recruiters.

The rule and its exceptions

C.R.S. 8-2-113(2)(a), as amended in 2025, says a covenant not to compete "that restricts the right of an individual to receive compensation for performance of labor is void," except as the section provides. The current framework came from HB 22-1317, which took effect August 10, 2022 and applies to covenants entered into or renewed on or after that date.

The threshold

The statute defines the "threshold amount for highly compensated workers" as the greater of the amount determined by the Division of Labor Standards and Statistics as of August 10, 2022, or the amount at the time the covenant is signed. "Annualized cash compensation" means gross salary, wages, fees or other compensation for a full year, or the annualized equivalent for a shorter period.

The Division's 2026 PAY CALC Order, adopted December 8, 2025 and effective February 1, 2026, lists $130,014 a year for highly compensated employees. Sixty percent of that figure is $78,008.40 (our arithmetic). The PAY CALC Order is written for wage-and-hour exemptions and does not itself mention 8-2-113, so have counsel confirm the figure that applies to a particular covenant and signing date.

The notice requirement

Under 8-2-113(4), a covenant that is otherwise permissible is void unless notice of it and its terms are given:

• to a prospective worker before the worker accepts the offer of employment; or
• to a current worker at least 14 days before the earlier of the covenant's effective date or the effective date of the raise or other change that is the consideration for it.

The notice must be a separate document from other covenants, in clear and conspicuous terms, in the language the worker and employer use about the worker's performance, and signed by the worker. It satisfies the rule if it comes with a copy of the agreement, names the agreement and says it contains a covenant that could restrict the worker's options after leaving, and points to the specific sections that contain it.

For a recruiter working a Colorado offer, that is a sequencing issue: a client that wants a covenant needs the notice in the candidate's hands before acceptance. The offer call script is the place to confirm it has gone out.

Health care workers since August 6, 2025

SB 25-083, approved June 3, 2025, removed the highly compensated exception for non-competes and customer non-solicits that restrict the practice of medicine (including physician assistants), advanced practice registered nursing or dentistry in Colorado. It also treats as such a restriction any covenant that stops a health care provider from telling former patients that they are still practicing, their new contact information, or that the patient has the right to choose a provider. The act applies to covenants entered into or renewed on or after its effective date, August 6, 2025, the day bills without a safety clause took effect after the 2025 session.

An example of how the pieces combine

Example only: a Denver sales engineer signed a 12-month non-compete in 2024 as part of an offer, earns well above the threshold, and remembers getting a separate one-page notice a week before accepting. On those facts the pay test and the notice test may both be met, so the remaining question is whether the covenant is for the protection of trade secrets and no broader than necessary. Change one fact, such as the notice arriving on the first day of work, or the person being a dentist who signed after August 6, 2025, and the analysis changes completely. That is why the recruiter's job is to collect the facts accurately and leave the analysis to counsel.

Choice of law, challenges and penalties

• Colorado venue and law. Under 8-2-113(6), a covenant may not require a worker who primarily resided or worked in Colorado at termination to litigate its enforceability outside Colorado, and Colorado law governs for a worker who primarily resided and worked in Colorado at termination, "notwithstanding any contractual provision to the contrary."
• The next employer can go to court. Under 8-2-113(7), the worker, or "a subsequent employer that has hired or is considering hiring the worker," may seek a declaratory judgment that the covenant is unenforceable.
• Presenting a void covenant is itself a violation. Under 8-2-113(8), an employer may not enter into, present to a worker or prospective worker as a term of employment, or attempt to enforce a void covenant. The penalty is actual damages plus $5,000 per worker or prospective worker harmed, with costs and attorney fees in a private action; the attorney general may also enforce.
• Intimidation is a crime. Using force, threats or other intimidation to keep someone from a lawful occupation is a class 2 misdemeanor under 8-2-113(1.5).

Screening a Colorado candidate

Colorado's Equal Pay for Equal Work Act also limits pay questions, so do not ask about current pay to test the threshold; see the Colorado salary history ban guide. The facts the client's counsel will want are about paperwork and timing.

COLORADO CANDIDATE — restrictive agreements

1. "Have you signed a non-compete, a customer non-solicit, a training
    repayment agreement, or a confidentiality agreement?"
2. "Did you get a separate notice about the non-compete, and was it
    before you accepted the offer or later?"
3. "Roughly when did you sign it?"
4. "Is your work in medicine, nursing or dentistry?"
5. "Were you living and working in Colorado when you signed it?"
6. "Could the hiring company's lawyer see the agreement and notice,
    as far as they allow?"
Always: "We don't want any confidential information or client lists
from your current employer."

• Do not tell the candidate their covenant is void because the notice was missing. Pass the facts on.
• Do not suggest the client "just sue for a declaration." Section (7) gives it that option; whether to use it is a legal and business decision.
• Do tell the client if its own offer template includes a covenant. Under (8)(a), presenting a void one to a prospective worker is a violation.

Federal status

As of October 2026 the federal rule does not apply. The FTC's Noncompete Rule page notes the August 20, 2024 court order; the Commission voted on September 5, 2025 to accede to the vacatur; and a February 12, 2026 notice removed it from the Code of Federal Regulations. The FTC continues case-by-case actions such as Rollins in April 2026.

Checklist

• Signing date and notice timing captured for every Colorado covenant.
• Health care roles flagged for the SB 25-083 rules.
• No pay questions asked to test the threshold.
• Client's own covenant and notice checked before the offer goes out.
• Threshold confirmed with counsel against the current PAY CALC Order; licensing in the Colorado staffing agency license guide.