Non-Solicitation Agreements in Colorado: Enforceability Rules

Federal law does not directly regulate non-solicitation agreements. The enforceability of restrictive covenants, including non-solicitation clauses, is governed entirely by state law. The Federal Trade Commission has proposed rules that would limit non-compete agreements nationwide, but these rules do not specifically address non-solicitation agreements and remain subject to legal challenge. Federal courts apply the law of the state where the employment relationship exists when deciding whether to enforce a non-solicitation agreement in cases involving interstate commerce or federal question jurisdiction.

The National Labor Relations Act (29 U.S.C. § 151 et seq.) may limit the enforceability of non-solicitation agreements that restrict an employee's right to communicate with coworkers about wages, hours, and conditions of employment. Courts have found that overly broad non-solicitation clauses can violate Section 7 rights when they chill protected concerted activity.

At the federal level, employers can generally enforce non-solicitation agreements against customers and clients through breach of contract remedies, but restrictions on hiring away former employees face greater scrutiny. Federal courts have been skeptical of agreements that prevent employers from competing for talent, viewing such restrictions as potentially anticompetitive. States have the primary authority to determine what restrictive covenants are enforceable within their borders.

Colorado law is among the most restrictive in the nation regarding non-solicitation agreements. Colorado Revised Statutes § 8-2-113 provides that any restrictive covenant (including non-solicitation clauses) is enforceable only if it: (1) is supported by consideration, (2) protects a legitimate business interest as defined in C.R.S. § 8-2-114, (3) is reasonable in geographic scope, duration, and line of business, and (4) does not impose an undue hardship on the employee or public.

§ 8-2-114 defines five legitimate business interests: trade secrets; confidential business or professional information; substantial relationships with prospective or existing customers or clients; substantial relationships with prospective or existing employees or independent contractors; or goodwill associated with an ongoing business or professional practice. A non-solicitation agreement must be limited to protecting one or more of these specific interests and cannot be used merely to prevent competition generally.

Unlike many other states, Colorado courts have held that a broad restriction on hiring away employees—where the employee merely agrees not to solicit or recruit former coworkers—is disfavored and must be strictly limited. The restriction cannot prevent the employee from accepting applications from former coworkers who initiate contact. Courts have also held that non-solicitation agreements cannot restrict an employee's ability to hire experienced workers in the same field, even if those workers previously worked for the former employer.

Duration and geographic scope must be reasonable. Colorado courts generally find one to two years reasonable for customer non-solicitation in many industries, though longer periods may be enforceable for protection of trade secrets or substantial client relationships. Geographic scope must be limited to the area where the employer actually conducted business with the customer or employee at the time of termination—not a blanket statewide or nationwide restriction.

Colorado applies a strict scrutiny standard and will not blue-pencil or reform overly broad agreements in most cases. The agreement must be reasonable on its face; if it is not, the entire clause may be struck down rather than narrowed by the court. This is substantially more protective of employees than federal common law or the law of many other states.

Colorado law creates several significant exceptions and limitations to the enforceability of non-solicitation agreements. First, an agreement that restricts an employee's ability to solicit job applications from coworkers who initiate contact is unenforceable. The restriction cannot apply to unsolicited applications; it can only restrict active recruitment.

Second, post-employment non-solicitation agreements (signed after the employee is hired) may be unenforceable unless the employer provides new, independent consideration beyond continued employment. Colorado courts have been skeptical of the adequacy of continued employment as consideration, particularly if the agreement is signed long after hiring.

Third, if the agreement is overly broad in scope, duration, or geography, it will be struck down in its entirety rather than reformed or blue-penciled by the court in most cases. Colorado courts apply strict scrutiny and will not save an unreasonable agreement by narrowing it.

Fourth, non-solicitation agreements may conflict with federal labor law if they chill Section 7 protected activity under the National Labor Relations Act. Agreements that prevent employees from discussing wages, hours, or conditions with coworkers, or that prevent union organizing communications, may be unenforceable as against public policy.

Fifth, non-solicitation agreements cannot impose an undue hardship on the employee or the public. Courts will consider whether the restriction leaves the employee unable to earn a livelihood in their chosen field or prevents the employee from practicing a profession or trade for which they are licensed.

Sixth, at-will employment status does not eliminate the requirement for consideration for non-solicitation agreements. An employer cannot unilaterally impose a restrictive covenant on an existing employee without providing new, independent consideration beyond continued employment.

Step 1: Document the Existence and Terms of the Agreement. Obtain a copy of the non-solicitation agreement signed by the employee (or alleged agreement). Keep detailed records of when the agreement was signed, what consideration was given, and whether it was a condition of hire or imposed post-employment. Document any instances where you believe the employee violated the agreement—including dates, names of employees or customers solicited, and communications (emails, messages, calls) that show solicitation occurred. Take screenshots or save copies of text messages, social media contact, or emails showing the solicitation.

Step 2: Assess the Reasonableness of the Agreement Under Colorado Law. Review the agreement to determine whether it clearly identifies a legitimate business interest under C.R.S. § 8-2-114 (trade secrets, confidential information, substantial customer relationships, substantial employee relationships, or goodwill). Evaluate whether the geographic scope is limited to areas where the employer actually did business with the customer or employee. Check the duration restriction—is it one to two years, or longer? Determine whether the agreement was supported by valid consideration at the time of signing. A court will not enforce the agreement if it is overly broad or unsupported by consideration, so internal assessment is critical before pursuing enforcement.

Step 3: Send a Cease and Desist Letter. If the employer believes a violation has occurred, send a written cease and desist letter to the departing employee demanding that they cease solicitation activity immediately. The letter should identify the specific customers or employees being solicited, cite the non-solicitation agreement by date, and warn that continued violation will result in legal action. Keep a record of how the letter was delivered (certified mail, email with read receipt, or personal service). This step creates a record of notice and demonstrates the employer's intent to enforce the agreement, which may support a preliminary injunction request.

Step 4: File a Breach of Contract Lawsuit in Colorado District Court. Because non-solicitation agreements are contracts, they are enforced through civil breach of contract litigation, not administrative complaint. File a lawsuit in the Colorado district court where the defendant employee resides or where the employer's principal place of business is located. The complaint must allege: (1) the existence of the non-solicitation agreement, (2) that the agreement is reasonable and enforceable under C.R.S. § 8-2-113 and § 8-2-114, (3) that the employee violated specific terms of the agreement, and (4) damages suffered as a result. Request a jury trial if desired. The employer should also consider requesting a temporary restraining order or preliminary injunction to stop the solicitation immediately while the case proceeds, though courts are cautious about granting preliminary relief in Colorado.

Step 5: Engage Litigation Counsel with Restrictive Covenant Experience. Hire a Colorado employment attorney licensed to practice in Colorado district court. The attorney should have specific experience litigating restrictive covenant cases and understanding Colorado's strict scrutiny standard. The attorney will prepare discovery (requests for documents and depositions), prepare the employer's case for trial, and negotiate settlement. Colorado courts are skeptical of restrictive covenants, so the attorney must be prepared to defend the reasonableness of the agreement and the legitimacy of the business interest being protected. Settlement discussions should begin early, as Colorado courts often suggest mediation in commercial disputes.