Great question, and it comes up a lot. Restrictive covenants, such as this covenant not to compete, are governed by Colorado law - C.R.S. Sec. 8-2-113. For the most part, covenants not to compete are disfavored under Colorado law, and are not enforceable.
However, there are certain times when a covenant not to compete is valid. They include:
(i) when the covenant not to compete is entered into in connection with with the sale and purchase of a business or the assets of the business;
(ii) when it is for the specific protection of trade secrets;
(iii) when it is a contractual provision in an agreement where the employer pays for and is recovering the expenses of educating and training an employee, and the employee has been with the employer for less than 2 years; and
(iv) when the employee is considered an "executive" or management personnel, or is part of the professional staff to the executive and management personnel.
In most cases, a covenant not to compete is not enforceable - it is void. Most employers try to hang their hat on (ii) or (iv) above. However, restrictive covenants for the protection of trade secrets must be tailors to that specific purpose. Also, in order to be considered management or an executive, you have to actually have people underneath you that you manage and control.
Look at the facts of your case. If you were not an actual manager, and none of the other circumstances apply, then the covenant not to compete is likely not enforceable.
That being said, it does not mean that your former employer cannot file a lawsuit to attempt to enforce the covenant not to compete, and require you to hire an attorney to defend the case. It just means that there is a good likelihood that you would be successful in defending the action.
Finally, a covenant not to solicit has the same legal restrictions as a covenant not to compete - they both restrict an employee's ability to earn a living in their chosen profession.
Good luck!
Answered on Sep 08th, 2014 at 2:52 PM