Erik W. Weibust, Member of the Firm in the Litigation & Business Disputes and Employment, Labor & Workforce Management practices, in the firm’s Boston office, was quoted in the Denver Business Journal, in “How Employers Can Avoid Running Afoul of Colorado’s New Noncompete Law,” by Ed Sealover. (Read the full version – subscription required.)
Following is an excerpt:
A new Colorado law limiting the use of noncompete agreements has generated a flurry of calls to corporate attorneys and an immediate update of existing agreements. But several legal experts helping companies to implement the statute say its long-term effects remain unknown. …
For now, though, Dreyer and Erik Weibust, a Boston-based attorney for Epstein Becker Green with a nationwide practice focused on trade secrets, said they are working feverishly with clients to rewrite existing employment agreements. And both said there are several pieces of advice that they are reiterating as they walk companies through the process.
Weibust said he urges clients to examine and update all their noncompete and non-solicitation agreements, paying attention closely to the salaries of the employees working under the legal documents. And for companies with offices in multiple states that may have different restrictions on noncompetes, he advises them to ensure a baseline level of enforceability and then add provisions to individual contracts that may be needed in specific states. …
While other states are putting similar laws into place, Colorado’s new statutes have gained national attention for some of the steps that they alone take, Weibust said. It’s the only state that requires that prospective new employees be handed the noncompete agreements as a separate document rather than as part of a new-employee manual, and it’s unique in its categorization of improper noncompete agreements as a class 2 misdemeanor, he said.
There also are several provisions that may take time and legal action to determine their applicability, the attorneys said.
Weibust said it remains unclear to him how startup employees being paid largely in equity fit under the new minimum-salary requirements for noncompete agreements. Dreyer said there are still some blurry lines regarding how some other forms of non-disclosure agreements beyond noncompetes are affected by the changes.
Because of these questions, employers are now taking their levels of risk aversion into account when drawing up restrictive employment agreements, both Weibust and Dreyer said. But they are not avoiding such agreements altogether.
