Colorado has further tightened its restrictions on non-compete and non-solicitation agreements. Senate Bill 25-083 (“SB 25-083”), signed in June 2025 and effective August 6, 2025, limits when restrictive covenants can be used and expands protections for healthcare providers, making it harder for employers to restrict competition or patient relationships.
Current Law at a Glance
Colorado already treats most post-termination non-competes as void. The few exceptions, such as covenants designed to protect trade secrets for “highly compensated” employees, require strict notice and must be narrowly tailored. Customer non-solicitation agreements carry a slightly lower compensation threshold but the same notice and reasonableness requirements. Confidentiality provisions and restrictive covenants tied to the sale of a business remain permissible if properly drafted.
Changes Under SB 25-083
Broader Ban for Healthcare Providers
The new law expands the existing physician-only protections to a wider range of professionals. Physicians, physician assistants, advanced practice registered nurses, certified midwives, and dentists are all covered.
- No more non-competes or non-solicits: Agreements restricting these providers’ ability to practice or solicit patients are void, regardless of salary or access to trade secrets.
- Patient communication protected: Employers cannot prevent providers from telling patients where they will continue practicing, sharing new contact details, or explaining that patients are free to choose their own provider.
- Liquidated damages eliminated: The prior allowance for “competition-related” damages in physician contracts has been removed.
New Rules for Business-Sale Covenants
Colorado continues to allow restrictive covenants in connection with the purchase or sale of a business, but SB 25-083 narrows this exception:
- The covenant must truly relate to a business sale or ownership transfer.
- For individuals who received a minority ownership share through equity compensation or services, the covenant’s duration is capped by a formula based on the sale proceeds and the owner’s average annual compensation.
Notice and Enforcement
Employers must continue to follow Colorado’s detailed notice requirements for any permissible restrictive covenant. The Colorado Attorney General can enforce violations, and penalties can include civil fines and attorneys’ fees.
Practical Takeaways
Healthcare employers should review and revise all agreements with physicians, advanced practice nurses, physician assistants, midwives, and dentists. Businesses offering equity should ensure buy-sell and equity agreements meet the new duration limits for minority-owner non-competes. All employers should confirm confidentiality clauses are narrowly drawn to protect true trade secrets and that statutory notices are delivered on time.
Need help reviewing your agreements?
Lengea Law advises healthcare providers, med spas, and businesses nationwide on restrictive covenants and employment compliance. Contact our team today to ensure your contracts meet Colorado’s new requirements.