Colorado courts can maintain a non-compete agreement as long as they do not unfairly penalize the worker. However, the court`s decision must also balance the employer`s investment in the employee. Therefore, if the employee has spent a great deal of time and resources to train staff at work and the worker is aware of trade secrets that could result in serious financial losses for the employer, a stricter non-competition agreement can be maintained. A typical non-compete clause may take two years, but Colorado courts have upheld non-compete bans that have lasted twice as long. The adequacy of the duration is determined on the basis of the facts related to a specific non-competition agreement. For example, if a company has financial plans two years in advance, it would probably be reasonable to prevent a financial manager from competing with the company for up to two years. After two years, the CFO would no longer have information that would constitute an unfair competitive advantage if transferred to another company. In assessing the adequacy, the Court found that Dr. Crocker had been forced to leave his job at GCA because he did not accept a merger with a new company, USAP, where he would execute a new employment contract reflecting a 21.3% pay cut. Since, under the new agreement, an anaesthetist must live off his work within 30 minutes, he should have moved or paid the liquidated damages.
The Colorado Court of Appeals held that compensation liquidated in a medical competition agreement is enforceable only if the amount is reasonably related to an injury found at the end of the employment relationship that is not related to a prospective injury estimated at the time of the contract. The court found that because there was no evidence of a work that was redirected to him, any income or profits as a result of his departure or anything other than the assumption to support the administrative parts of the formula, there was therefore no damage. The Court of Appeal agreed. Since non-compete agreements are contracts, contractual damages may be awarded. However, such damage is speculative and probably difficult to prove. The most common way to impose non-compete bans in Colorado is by default, that is, the court will order a party to stop doing something. In this case, the competition. The objective of allowing non-competitive agreements in this context is simple: if a buyer of a business has not been able to protect his purchase of value, the sellers of the company could simply create a new business and effectively take their former customers to make the purchase of the buyer useless.