Effective January 1, 2026, numerous state and local government employment laws have taken effect. Below is a non-exhaustive summary of key employment law updates for January 2026. For additional insights, register for the 2026 Employment Law Developments: Key Considerations for Employers webinar here. To navigate each employment law update by state, click here. Please note that the above is a non-exhaustive summary of recent employment law developments. For questions or assistance with employment law compliance in 2026, or to ensure you are informed about the latest updates, please contact your Polsinelli attorney.

Colorado generally prohibits restrictive covenants, except in narrow circumstances. On May 8, 2025, the Colorado Legislature passed Senate Bill 25-083, which imposes three significant new limitations on the use of restrictive covenants for certain healthcare providers and narrows their application in business sales. These changes will apply to agreements entered into or renewed on or after August 6, 2025. Current Law Overview Under current law (C.R.S. § 8-2-113), non-compete and customer non-solicitation agreements are enforceable only in certain circumstances. For instance, non-competes are enforceable for “highly compensated individuals” when the agreement is reasonably necessary to protect an employer’s trade secrets. However, covenants that restrict a physician’s right to practice medicine after leaving an employer are already void under Colorado law. Key Changes Under SB25-083 Broader Ban on Non-Competes for Healthcare Providers The amendment prohibits non-compete and non-solicitation agreements for certain licensed healthcare providers, even if they meet the "highly compensated" threshold. This includes those who: Practice medicine or dentistry Engage in advanced practice registered nursing Are certified midwives Fall under additional categories listed in C.R.S. § 12-240-113 Liquidated Damages in Physician Contracts Previously, physician employment agreements could include liquidated damages tied to termination or competition. This amendment removes that provision, meaning that: Agreements with unlawful restrictive covenants are unenforceable. Agreements without unlawful provisions remain enforceable and may still carry damages or equitable remedies. It remains unclear whether competition-related liquidated damages are still enforceable under the new law. Expanded Patient Communication Rights Medical providers can no longer be restricted from informing patients about: Their continued medical practice New professional contact information The patient’s right to choose their healthcare provider Confidentiality and trade secret agreements are still allowed, as long as they don’t prevent sharing general knowledge. New Limitations on Business Sale Non-Competes Colorado law has long permitted non-competes in connection with the purchase or sale of a business. SB25-083 narrows this by: Allowing non-competes only for owners of a business interest Placing time limits on non-competes for minority owners or those who received ownership through equity compensation For these individuals, the non-compete duration is capped using a formula: Total consideration received ÷ Average annual cash compensation in the prior two years, or the duration of employment if less than two years. For questions and assistance regarding the upcoming changes to restrictive covenants in Colorado, please contact your Polsinelli attorney.

Many state and local government employment laws went into effect January 1, 2025. Here is a non-exhaustive list of 2025 employment law updates. Contact your Polsinelli attorney if you have any questions or need assistance regarding employment law compliance for these legal updates. Polsinelli provides this material for informational purposes only. This material is not intended for use as legal guidance. Please consult with a lawyer to evaluate your specific situation. The choice of a lawyer is an important decision and should not be based solely upon advertisement. Copyright © 2025. Polsinelli PC, Polsinelli LLP in California, Polsinelli PC (Inc) in Florida.