HB 22-1216

HB 22-1216, also known as the Uniform Restrictive Employment Agreement Act, regulates agreements between employers and employees that restrict an employee's ability to work after leaving their job. The bill bans noncompete clauses for low-wage workers (those earning less than Colorado’s average annual wage) while allowing confidentiality and training reimbursement agreements. It also requires employers to provide advance notice before enforcing any restrictive agreement and sets penalties for violations. Since the bill has been signed, it is now law and affects all employers and employees in Colorado who enter into such agreements.

Official Summary

Colorado Commission on Uniform State Laws. The bill enacts the "Uniform Restrictive Employment Agreement Act" as drafted by the Uniform Law Commission, which regulates agreements between an employer and a worker or employee that prohibit or limit the worker or employee from working after the work relationship with the employer ends. The bill: Regulates all restrictive post-employment agreements, including noncompete agreements, confidentiality agreements, no-business agreements, nonsolicitation agreements, no-recruit agreements, payment-for-competition agreements, and training reimbursements agreements; Prohibits noncompete agreements and all other restrictive agreements, except confidentiality agreements and training-reimbursement agreements, for low-wage workers, defined as those making less than the state's annual mean wage; Requires advance notice and other procedural requirements for an enforceable noncompete agreement or other restrictive agreement; and Creates penalties and enforcement by the state as well as private rights of action.(Note: This summary applies to this bill as introduced.)