CO Supreme Court Overturns Lucht's Concrete - Non-Compete Agreements (Partly) Safe Again


The Colorado Supreme Court has reversed a lower court ruling in Lucht's Concrete Pumping, Inc. v. Horner, and reinstated the status quo business practice of having eligible employees sign non-compete agreements without paying additional consideration. The Supreme Court ruled that not being fired is sufficient consideration to support a non-compete agreement, holding that ""Because an employer may terminate an at-will employee at any time during the employment relationship as a matter of right, its forbearance from terminating that employee is the forbearance of a legal right. As such, we find that such forbearance constitutes adequate consideration to support a noncompetition agreement with an existing at-will employee."

Non-Compete agreements in Colorado must still satisfy both the requirements of C.R.S. § 8-2-113, which makes non-compete agreements void except

(a) in connection with the sale of a business,

(b) to preserve trade secrets,

(c) to recover expenses of educating the employee, and

(d) as applicable to executives, management, officers and their professional staff; and must still be reasonable in both duration and geographic area.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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