What happened?

On May 8, 2025, Governor Polis signed Senate Bill (SB) 25-083 into law, prohibiting businesses from entering into non-compete and customer non-solicitation agreements with certain healthcare providers, while also clarifying when such agreements are permissible in the context of buying or selling a business.

Overview:

Effective August 6, 2025, Colorado law bans non-compete and customer non-solicitation agreements for most healthcare providers, including physicians, physician assistants, advanced practice registered nurses, certified midwives, and dentists.

• These professionals can no longer be restricted from:
  • Working for a competitor after leaving a job.
  • Informing patients about their new practice location.
  • Sharing their new contact information.
  • Letting patients know they have the right to choose their provider.

Impacts on employers include:

• No exceptions for highly compensated healthcare workers or for protecting trade secrets.

• Elimination of prior rules that allowed employers to enforce non-competes through damages clauses for physicians.

• Sale of business exception: Non-competes are still allowed when a healthcare provider sells their ownership in a business. For minority owners, the length of the restriction must be proportional to the compensation received, based on a specific formula.

• Expense recovery: Employers may recover certain costs (e.g., relocation, signing bonuses, marketing) if the repayment decreases over a maximum of three years.

For additional information, please review the law.

Source References

• CO SB 25-083 – Limitations on Restrictive Employment Agreements

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