Employers in Colorado must ensure compliance with a variety of state and federal laws governing employment agreements and workplace policies.
Here are three frequently overlooked legal pitfalls to watch out for:
- Nondisclosure provisions under the POWR Act: The POWR Act, which took effect in August 2023, prohibits discrimination based on marital status, rejects the federal standard for harassment claims, adds new recordkeeping requirements for employers, and restricts the use of nondisclosure provisions. The POWR Act defines “nondisclosure provision” as a provision “between an employer and an employee or a prospective employee that limits the ability of the employee or prospective employee to disclose or discuss, either orally or in writing, any alleged discriminatory or unfair employment practice.” Confidentiality and non-disparagement provisions fall under the term “nondisclosure provision,” and they are void unless they are mutual and comply with specific (difficult to comply with) drafting requirements and limitations. Employers must carefully draft confidentiality and non-disparagement clauses to avoid invalidation. An additional option is to explicitly carve out statements seeking to “disclose or discuss, either orally or in writing, any alleged discriminatory or unfair employment practice.”
- Notice required for noncompetition agreements: Colorado’s noncompete statute, which took effect in August 2022, requires employers to provide advance written notice of noncompetition and nonsolicitation agreements along with the terms of the agreement. The notice must be given before prospective employees accept an offer, and current employees must receive notice at least 14 days before the earlier of the effective date of the covenant or the effective date of the consideration for the agreement. Failure to comply with the notice requirements renders the noncompete void. Employers cannot escape these requirements through a choice of law provision because Colorado law governs agreements if the worker resides and works in Colorado at the time of termination. Notice must be carefully drafted, and the statute delineates specific information that must be included in the notice and the form it must take.
- Notice requirements to use PTO to satisfy HFWA requirements: Many employers try to satisfy their Healthy Families and Workplaces Act (HFWA) obligations through their PTO policies. This is permissible, but employers must comply with the HFWA including by providing specific written notice to employees about such an arrangement. The notice requirements are described here. Even with generous PTO policies, failure to provide clear notice can result in the employer having to pay for the absence or restore the PTO.
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