As now we have beforehand reported, the Colorado Meeting handed sweeping modifications to the state’s noncompete legislation that, amongst different issues, (1) set compensation flooring for enforcement of each noncompetes ($101,250) and buyer non-solicitation agreements ($60,750), which shall be adjusted yearly primarily based on inflation; (2) require a separate, standalone discover to staff earlier than a brand new or potential employee accepts a proposal of employment, or no less than 14 days earlier than the sooner of: (a) the efficient date of the restrictions, or (b) the efficient date of any further compensation or modifications within the phrases or situations of employment that gives consideration for the restriction, for current staff; and (3) prohibit the inclusion of out-of-state choice-of-law and venue provisions. These amendments take impact right now, August 10, 2022.
Compliance with these amendments is much more vital as a result of a previous modification, efficient earlier this 12 months, which offers that violations of Colorado’s noncompete legislation can topic employers to legal legal responsibility (a Class 2 misdemeanor, which carries doable punishment of 120 days in jail, a $750 fantastic per violation, or each), in addition to hefty fines and doable injunctive reduction and attorneys’ charges to aggrieved staff.
Our prior reporting on the main points of the amendments could be discovered right here:
- Solely One Month Till Dramatic Modifications in Colorado’s Restrictive Covenants Legislation (July 12, 2022)
- Colorado Continues Its Crackdown on Restrictive Covenants (Might 19, 2022)
- Small Change in Colorado Legislation May Have Giant Impact: Criminalizing Restrictive Covenants (January 13, 2022)
Subsequent up is Washington, DC, the place a brand new noncompete legislation will take impact on October 1, 2022. That legislation equally contains compensation flooring, discover necessities, and different limitations on noncompetes. Keep tuned for added updates as that date attracts close to.