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Colorado Non-Compete Agreement Template

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The Colorado Non-Compete Agreement Template allows a business entity the opportunity to protect its Trade Secrets and Intellectual Property, in addition to the state laws protecting those rights. However, the state also recognizes the employee’s rights and need to remain employed and therefore the state will not allow exiting employees to be intimidated to the point that they are unable to compete in normal markets for employment. Doing so often prevents employees the ability to locate work and at the same time, often inhibits businesses the ability to employ the caliber of employees they are seeking.

Although non-compete agreements are allowed in the state of Colorado, it is important to understand that there will be legal protections, by the state courts for both sides. Businesses should understand they will have protection but that even in the event that the document is drawn by the most knowledgeable attorneys, should the document be deemed unreasonable, keeping an employee from locating reasonable employment in which they have become skilled, the courts shall take these issues into consideration on behalf of the employee.

This template will provide many options for both parties to discuss so that a reasonable agreement may be employed. Ideally, the business entity will be able to protect itself from unfair competition while still allowing its former employees to pursue their career. This, of course, can only be accomplished through a frank discussion between both parties. In preparation of any non-compete in the state of Colorado, the person preparing the document may wish to consider reading some of the applicable laws. While this template can be considered a contract in any state, its terms must comply with the jurisdiction where it will be enforced. As such, make sure that all the expectations here are compliant with the County and/or City Statutes of the governing Jurisdiction (this may vary) along with Colorado State Law.

Non-compete agreements are disfavored in Colorado and generally prohibited C.R.S. § 8-2-113. However, there are some exceptions to this general rule. Exceptions to a non-compete agreement are the sale of a business, protection of trade secrets, recovery of expenses for training, and restraint on activities of key personnel. Section 8-2-113(3) of the Colorado Revised Statutes prohibits non-compete agreements for physicians and surgeons. Recovery of damages are allowed when related to an injury suffered if the physician leaves the practice.

In preparation of any non-compete in the state of Colorado, the person preparing the document may wish to consider reading some of the applicable laws.

Restrictions

Non-compete agreements are disfavored in Colorado and generally prohibited C.R.S. § 8-2-113. Exceptions to a non-compete agreement are the sale of a business, protection of trade secrets, recovery of expenses for training, and restraint on activities of key personnel. Section 8-2-113(3) of the Colorado Revised Statutes prohibits non-compete agreements for physicians and surgeons. Recovery of damages are allowed when related to an injury suffered if the physician leaves the practice.

Laws§ 8-2-113

How to Write

1 – Officially Present The Participants Entering This Agreement

“1. Purpose” is the first article to tend to. The stated Purpose of this document is to provide an agreement between its Recipient (usually an Employee of the disclosing company). This must be applied to specific parties to be considered a valid statement. We will need to indicate precisely who these parties are in the first paragraph of this article. Report the Legal Name of the entity who wishes to impose Non-Compete conditions to the business relationship at the focus of this document on the first blank line. There will also be an individual who is willing to adhere to all the statements in this contract. This party, who shall be referred to as The Recipient (of this contract). This party’s identity must be solidified at the start of this document using the second blank line of this paragraph. Provide the Recipient’s Full Name on this line.

2 – Provide A Documentation Of the Restrictions The Recipient Agrees To

In section 2, the individual who would hire the recipient, must select and check each of the following boxes that would apply. This will be a simple but important task for the Company to perform and it must be performed to remain in full compliance with the Local and State Government where this document will be upheld. Each checkbox that is marked will be considered a statement the Recipient will promise to obey with his or her Signature.

The Recipient will promise to restrict his or her “Business Practices” according to the first paragraph here if this checkbox has been filled in.If the Recipient is willing to make a guarantee to uphold the restrictions stated in the second statement, “Clients/Customers,” the corresponding checkbox may be filled in by the Company to obtain this promise.The Recipient can give a written promise to obey the “General Competitors,” upon a signature, if the Company fills in the appropriate checkbox before this paperwork is signed.If the Recipient intends to refrain from contacting or dealing with the “Specific Competitors” listed by the Company in this statement (Enter required information), the Company should fill in this checkbox.Finally, if the Recipient will obey the Company’s wishes as reported in the “Employees” paragraph, the Company should fill in this checkbox.

3 – Solidify The Time Frame For This Agreement

“3. Time Period” will request some important information so this document may be applied properly. That is, a solid time frame of when the Company expects the Recipient to uphold his or her promise here must be solidified. This can be done by stating the length of time this document is in effect on the blank line in the first statement, then indicating if the Start of the Recipient’s Promise should be considered on the Effective Date (to be supplied) by filling in the first checkbox or if it should start upon the Recipient’s Termination by filling in the second checkbox.

4 – Detail If A Purchase Consideration Is Available

Section 4 addresses the possible allowable option for the Recipient to use a purchase option. If it has been determined the Recipient may nullify this promise and be released from any liability of breaching this contract, the Company should fill in the first checkbox and record the amount (USD) the Recipient will need to pay to be released onto the blank spaces provided. Record this first in written words, then numerically.The Company may refrain from offering this option by simply filling in the second checkbox.

5 – Report Where This Document Is Effective And Governed

In “5. Jurisdiction,” find the blank space in the statement, then present the local and state governments that will govern this Agreement’s requirements and the possible violations either party is held responsible for.

6 – The Agreement Will Be Entered Upon The Signature Of Both Parties

Both signature parties should complete review of all remaining sections and subsections. Once all of the sections – Section 6 through 13, have been carefully reviewed by the employee, all parties must acknowledge their requirements and understandings of all sections below “13. Entire Agreement.” Before they can enter this agreement one more item must be supplied: this document’s Execution Date. Enter this date in the statement beginning with “In Witness Whereof, The Parties Hereto…”The column labeled “The Company,” in the bottom left-hand corner of the page provides an area for the Company to enter this Agreement. This may only be done by a Signature of the Company Owner/Authorized Representative, his or her Printed Name and Title accompanied by the Date of Signature.The column to the right, labeled “Recipient” calls for the Signature, Printed Name, and Date of Signature furnished on the appropriately labeled lines by the Recipient.


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