Colorado’s New Noncompete Law Brings Big Changes For Healthcare Professionals And Minority Business Owners

Posted August 15, 2025 in Uncategorized

Employers and business owners should be aware of changes to Colorado’s laws governing noncompete agreements. Our Colorado Springs, CO commercial litigation lawyer believes that the best way to avoid litigation is ensuring compliance with state and federal regulations. Failure to adjust when the law changes can leave your business open to a lawsuit.

Colorado SB 83, effective August 6, 2025, brings sweeping changes to employment noncompete agreements entered into or renewed after August 6. This material update primarily affects healthcare professionals and minority business owners.

If you’re unsure whether your business’s noncompete agreements will be affected by these changes, it’s critical to consult with the Volpe Law, LLC legal team. We can help you revise your current noncompete agreements to ensure they comply with the new law and advise you of any potential legal exposure.

Here’s what’s happening and why it matters.

What Does Colorado SH 83 Change?

SB 83 makes two big changes to Colorado’s laws governing restrictive covenants (clauses in employment contracts preventing individuals from competing with their former employer or company after ending their employment).

Healthcare professionals and minority business owners (those owning less than 50% of the business) are the most affected.

Changes for Healthcare Professionals

Healthcare workers should see noncompete agreements with fewer limits; the changes apply to all licensed healthcare providers, from doctors to CNAs. Now, most non-solicit and noncompete agreements will no longer be enforceable.

The purpose of this change is to improve patient care in the community and the state by broadening access to quality medical care and providing medical professionals with more flexibility in their careers.

New Rules for Minority Business Owners

SB changes how noncompete agreements are handled in the sale of a business, specifically for minority owners. Someone selling less than 50% of the company may still be required to sign a noncompete agreement. However, this agreement must:

Ensure the seller is paid enough to justify any restrictions on working in the same field

Any restriction must be proportional to the signer’s earnings from the sale of their share of the enterprise

SB 83 also includes a formula for calculating the length of a noncompete agreement.

For example, a minority owner sells their interest and receives $50,000 from the sale. Their average annual salary with the company is $100,000. The maximum length of their noncompete would be:

• $50,000 ÷ $100,000 = 0.5 years, or 6 months

So, the more a minority shareholder’s stake is worth, the longer the noncompete agreement can last. Owners who sell their share for a large amount may face more restrictions on working in their field, but they’ll also have a significant sum from the sale of their share of the business to cushion them. And, if the minority owner’s share is modest, it’s balanced with a less-restrictive noncompete agreement duration.

Not Retroactive—But Time to Get Ready

Note that while SB 83 takes effect on August 6, 2025, it is not retroactive. Any noncompete agreements that you have in place won’t need to be revised, but if you renew the noncompete agreement, it must comply with the new law.

Now is the time to review your noncompete agreements, and our Colorado Springs commercial litigation lawyer is here to help. We can review your agreements, compare them to the new law, and recommend the right changes to ensure your business is compliant.

Don’t risk legal trouble with non-enforceable noncompete agreements. Call Volpe Law LLC today for a personalized legal complimentary discovery call.