How Non-Disclosure Agreements and Non-Compete Clauses Can Protect Your Colorado Business

October 24, 2016 | Bill Henry

Owning and operating a profitable business requires a heavy investment of both time and money. You and your employees work hard to develop innovative new ideas, products, and technologies to ensure your business is successful. Unfortunately, those you work with and meet in the course of conducting your business often share the same competitive playing field, and it is not uncommon for employees, partners, and associates to try and capitalize on your success by ‘borrowing’ your ideas and using them elsewhere. Our Colorado business attorneys understand that while some business innovations are meant to be shared, it should be up to you to decide when and how that happens. Non-disclosure agreements and non-compete clauses play an important role in protecting your business and the time and money you have invested in it.

Why Your Business Needs Non-Disclosure Agreements


Performance and innovation are at the heart of most successful businesses. You or your team has likely spent considerable time and effort in developing new products and approaches to make your business more effective, and it is a smart move to protect these developments against being misappropriated by others. According to a March 2016 Forbes article on non-disclosure agreements, there are five important ways these agreements can be used to protect your ideas:

  1. When presenting new and innovative products or practices to potential new partners or investors;
  2. When sharing sensitive or private information about your business with potential buyers;
  3. When demonstrating a new product or practice to prospective buyers or licensees;
  4. When receiving services from outside agents who may have access to sensitive information;
  5. When allowing your employees access to confidential information during the course of their job.

Key elements that should be included in the non-disclosure agreement include the names of the parties involved, a thorough description of the product, technology, or idea to be protected, possible exceptions to the agreement, and the term or length of time the agreement is in force.

Protecting Yourself Through Non-Compete Clauses

In addition to protecting your products and ideas from outside competitors, it is a good idea to look out for your own interests in terms of your employers. There is nothing worse than spending valuable time and money in training workers, only to have them take that training elsewhere, or even use the information they have gleaned from your business to compete against you in the same market. Under Section 8-2-113 of the Colorado Revised Statutes, employers are not permitted to threaten, harass, or otherwise prevent a worker from engaging in another occupation or business venture at any time they see fit. At the same time, having employees sign a non-compete clause in their employee contract protects your business in the following ways:

  • Prevents the unauthorized spread of valuable trade secrets;
  • Allows you to recoup money spent on educating or training an employee if they remain with your business for less than two years;
  • Allows a specified term of employment for executive and upper management personnel and officers.

Get the Professional Legal Advice You Need From Our Colorado Business Attorneys

Your business is your livelihood, and may represent an entire lifetime of investments. Get the professional legal representation you need to ensure your rights and interests are protected and contact Robinson & Henry, P.C. today. Our experienced Colorado business attorneys can advise you on the legal tools you need to assist you in making sure your business is a success. We have offices in Denver, Castle Rock, and Colorado Springs; don’t hesitate to call or contact our office online today to consult with one of our attorneys.

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