Do companies have to pay your salary if they enforce the term of a non-compete agreement in an at-will state?

Asked 6 months ago - Colorado Springs, CO

For example, if a company has an employee sign a non-compete agreement specifying that the employee cannot work for a competitor for 12 months following the termination of employment, would the company be obligated to pay the employee's salary if they decide to enforce the agreement?

Attorney answers (5)

  1. Christopher Daniel Leroi

    Contributor Level 20

    6

    Lawyers agree

    Answered . By statute, most non-competes are not enforceable in CO. You need to take this to an attorney. I review these all of the time. They are presumed to be invalid unless - 1) you are buying the business from them; 2) you are being required to keep "trade secrets," or 3) you have an ownership or managerial position.

    Even if one of those DOES apply, they are restricted as far as length of time and distance. CO has held anything over 5 years is no allowable and anything over 100 miles to be unenforceable.

    No, you don't get paid when they are enforcing a non-compete. That was a condition of hiring you in the first place. However, you really need to talk to an attorney.

    The information provided in this answer does not create an attorney-client relationship and is not considered to... more
  2. Matthew James Casebolt

    Contributor Level 10

    1

    Lawyer agrees

    Answered . Mr. Leroi is correct. I will only add that it used to be that there had to be 'separate' consideration (an additional payment of some kind) to make non-compete agreements binding. I don't think that's true anymore. Additionally, a non-compete must be reasonable in scope (geographic restriction- like "in Colorado Springs" is okay, but not "in the United States") and reasonable in duration, e.g., more than three years is probably pushing it, to be enforceable.

    Regardless, unless the agreement states that the employer will pay you something if they elect to enforce the non-compete, I know of nothing that would require the employer to pay your salary if they were to decide to enforce the agreement.

    Another issue is contract termination. I think that when a party terminates a contract, all of the provisions are terminated unless the parties specifically state that the non-compete covenant (which is just a fancy way of saying a 'promise' to do, or not do, something in the future) "survive" termination. I see that sloppy omission all the time when these provisions are drafted.

    You might go talk to Mr. Leroi with your contract in hand.

  3. Stephen Clark Harkess

    Contributor Level 20

    1

    Lawyer agrees

    Answered . The answer to you question is no. You don't get paid for not working for competitors. That is not how the agreements work. If the non compete is valid it means you have to seek work in another field, not that you get paid for not working.

    That said, as noted by others, most non-compete agreements in Colorado are not enforceable. You may want to review your situation with an attorney.

    You can reach Colorado Legal Solutions by phone or email. Stephen Harkess is an attorney licensed in the state... more
  4. Jason Carl Kennedy

    Contributor Level 13

    Answered . First you should know that Colorado law disfavors non-compete agreement, so sometimes they are unenforceable. In answer to your question: "no, unless the contracts require the salary to be paid."

  5. Shad L Brown

    Contributor Level 11

    Answered . I agree with the other attorneys here -- I would recommend you at least consult an attorney to review the particular agreement involved to make sure there are no lurking surprises out there!

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