Whether Betty Crockette owner Emily Jackson’s non-compete agreement with former lead baker Clara Locks, lasting five years and within a 150 mile radius of Denver, is enforceable in Colorado ?
SHORT ANSWER Yes. Locks appears to meet the state’s statutory exception for the managerial personnel under the statutory test, and the duration of the non-compete likely meets the reasonableness standard under the common law test. Enforceability thus hinges on the court finding the geographic scope of the non-compete reasonable. The 150 mile radius here extends beyond the 100 miles typically enforced by courts, but given the circumstances, the court will likely find that the geographic scope is reasonable. FACTS
Emily Jackson started her casserole business, “Betty Crockette”after learning how to bake from her friend, Clara Locks. Betty Crockette initially serviced the LoHi neighborhood in Denver but demand for her product grew. Despite the success, the workload was overwhelming, and Jackson realized she lacked Jackson’s talent and experience as a …show more content…
There is a strong argument that she is a key personnel at the “heart of the business” by virtue of Jackson framing the operation around her baking talents. She also meets the Dish test as a supervisor with autonomy and decision making capability who is well compensated.
B. Reasonableness requirements The court will next assess the reasonableness of the duration and geographic scope restrictions. Both must be reasonable for the non-compete to be enforced Nat'l Graphics Co. v. Dilley, 681 P.2d 546 (Colo. App. 1984). Five year non-competes have been enforced by the courts regularly. The 150 mile restriction here is outside the 100 default range typically enforced by the courts. However, due to the circumstances of this case, the court may view the 150 mile radius as reasonable.
Duration