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Colorado Employee and Severance NDA

Draft a Colorado employee or severance NDA that meets the POWR Act, with the mutual terms and permitted-disclosure carve-outs Colorado requires for bias claims.

Introduction

An employee NDA is a confidentiality agreement between a company and a worker that protects the employer's trade secrets and confidential business information. A severance NDA is the version signed at separation, usually inside a release agreement, and it often keeps the terms of the exit private. What separates it from a commercial NDA between two businesses is who signs it: a worker cannot be forced to stay silent about unlawful conduct. In Colorado, the Protecting Opportunities and Workers' Rights Act (POWR Act, C.R.S. 24-34-407) voids a provision limiting either party from disclosing an alleged discriminatory or unfair employment practice unless it meets strict requirements: the restriction must be mutual, binding the employer as well as the worker, and the agreement must list the people and agencies the worker may still contact. DocDraft drafts a Colorado-compliant employee or severance NDA from your facts, with the required carve-outs built in, and attorney review is available before anyone signs.

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Key Things to Know

  1. 1

    Colorado's POWR Act (C.R.S. 24-34-407) governs the limit. A provision that restricts disclosing or discussing an alleged discriminatory or unfair employment practice is void unless it meets the law's requirements.

  2. 2

    The restriction must be mutual. A confidentiality or non-disparagement term that binds only the worker, and not the employer, does not comply and is void under the POWR Act.

  3. 3

    The agreement must list permitted disclosures. It has to state the worker may still talk to immediate family, a religious advisor, a medical or mental health provider or support group, legal counsel, a financial advisor, a tax preparer, and any government agency.

  4. 4

    Disclosing to those people is not disparagement. The law says a permitted disclosure, including revealing the existence and terms of a settlement, does not count as disparagement the employer can act on.

  5. 5

    A defective clause carries a penalty. A provision that violates the POWR Act can expose the employer to a $5,000 penalty per violation, and the law often requires a separately signed addendum.

  6. 6

    It covers both onboarding and separation. The POWR Act reaches an NDA required at hire and a confidentiality term in a severance or settlement agreement alike.

  7. 7

    Trade secrets stay protectable, on the federal floor. Colorado still lets an NDA protect legitimate confidential information, and the federal Speak Out Act, agency-reporting rights, and the Defend Trade Secrets Act notice apply on top.

Key decisions before you file

Before you file a Employee and Severance NDA in Colorado, a few decisions shape the document: which option to choose and what each one means. The Employee and Severance NDA guide walks through them.

Open the Employee and Severance NDA guide

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COLORADO EMPLOYEE NON-DISCLOSURE AGREEMENT

This Employee Non-Disclosure Agreement ("Agreement") is entered into as of [DATE] by and between [COMPANY NAME] ("Company") and [EMPLOYEE NAME] ("Employee"). This Agreement is governed by Colorado law.

  1. PURPOSE In the course of Employee's employment, Employee will have access to confidential and proprietary information of the Company. Employee agrees to protect that information on the terms below.

  2. CONFIDENTIAL INFORMATION "Confidential Information" means non-public information the Company treats as confidential, including trade secrets, business and financial data, customer and pricing lists, methods, processes, software, and other proprietary information. Confidential Information does not include information that is or becomes public through no fault of Employee, that Employee lawfully knew before employment, or that is independently developed without use of the Company's information.

  3. OBLIGATIONS Employee agrees to use Confidential Information solely for the benefit of the Company, to not disclose it without authorization, and to return or destroy all Confidential Information on request or at the end of employment.

  4. PROTECTED DISCLOSURES (COLORADO POWR ACT, C.R.S. 24-34-407) Nothing in this Agreement limits or prevents either party from disclosing or discussing any alleged discriminatory or unfair employment practice, including harassment, discrimination, or retaliation. This confidentiality obligation applies equally to the Company and to Employee. Consistent with the POWR Act, this Agreement does not prevent Employee from disclosing to Employee's immediate family members, religious advisor, medical or mental health provider, mental or behavioral health therapeutic support group, legal counsel, financial advisor, or tax preparer, or to any local, state, or federal government agency for any reason, including disclosing the existence and terms of a settlement agreement. Any such disclosure does not constitute disparagement.

  5. DEFEND TRADE SECRETS ACT NOTICE Under the Defend Trade Secrets Act (18 U.S.C. Section 1833(b)), an individual is immune from criminal or civil liability for disclosing a trade secret (i) in confidence to a government official or attorney solely to report or investigate a suspected violation of law, or (ii) in a complaint or other document filed under seal in a lawsuit or other proceeding.

  6. NO OTHER RESTRICTIONS ON RIGHTS Consistent with the federal Speak Out Act, this Agreement does not restrict Employee from speaking about a dispute involving sexual assault or sexual harassment. This Agreement does not waive Employee's right to file a charge with, testify before, or participate in an investigation by the Colorado Civil Rights Division, the Equal Employment Opportunity Commission, the National Labor Relations Board, or the Securities and Exchange Commission, and does not require Employee to notify the Company before doing so.

  7. TERM AND ENFORCEMENT Employee's obligations as to Confidential Information continue for as long as the information remains confidential. The Company may seek injunctive relief and any other remedy available at law for a breach, subject to the protected disclosures above.

  8. GENERAL This Agreement is governed by Colorado law. If any provision is unenforceable, the remaining provisions stay in effect. This Agreement is the entire understanding between the parties on this subject.

[COMPANY NAME] By: [SIGNATURE] Name/Title: [NAME AND TITLE] Date: [DATE]

EMPLOYEE [SIGNATURE] Name: [EMPLOYEE NAME] Date: [DATE]

Colorado Requirements for Employee and Severance NDA

Colorado POWR Act (C.R.S. 24-34-407)

Draft a Colorado employee or severance NDA that meets the POWR Act, with the mutual terms and permitted-disclosure carve-outs Colorado requires for bias claims.

Frequently Asked Questions

An employee NDA is a contract in which a worker agrees to keep the employer's confidential information, such as trade secrets and pricing data, private during and after the job. A severance NDA is the version signed at separation, usually inside a release agreement in exchange for severance pay, and it often also keeps the departure terms confidential. Both are confidentiality agreements, and in Colorado both are limited by the POWR Act when they touch discrimination or unfair employment practices.

It applies whenever the agreement, whether signed at hire or at separation, limits either party's ability to disclose or discuss an alleged discriminatory or unfair employment practice. C.R.S. 24-34-407 makes such a provision void unless it satisfies the law's conditions, including that the restriction is mutual and that it lists the disclosures the worker may still make. It does not stop an NDA from protecting genuine trade secrets.

The POWR Act voids a confidentiality or non-disparagement provision unless it limits both parties equally. A term that gags the worker while leaving the employer free to speak does not comply. Colorado is unusual in this respect: many states restrict what an NDA can cover, but Colorado specifically requires the restriction to run in both directions to be enforceable at all.

The agreement must expressly state that it does not prevent the worker from disclosing to immediate family members, a religious advisor, a medical or mental health provider or a behavioral health support group, legal counsel, a financial advisor, or a tax preparer, or to any local, state, or federal government agency for any reason. That includes revealing the existence and terms of a settlement, and the law confirms such a disclosure is not disparagement.

The offending provision is void, so it cannot be enforced. Beyond that, the POWR Act exposes the employer to a penalty of $5,000 per violation, and the law commonly requires a separately signed addendum spelling out the worker's rights. Drafting the agreement compliant from the start, with the mutual terms and permitted-disclosure language, avoids both the penalty and an unenforceable clause.

Yes. The POWR Act limits confidentiality of discrimination and unfair-practice information, not the protection of legitimate trade secrets. A Colorado employee or severance NDA can still protect client and pricing data, processes, and other proprietary information, and it should include the federal Defend Trade Secrets Act immunity notice like any well-drafted agreement.

On top of Colorado law, the federal Speak Out Act makes a pre-dispute NDA or non-disparagement clause unenforceable to the extent it covers a dispute involving sexual assault or sexual harassment. A worker also keeps the non-waivable right to report to agencies such as the EEOC, the NLRB, and the SEC. Those protections apply regardless of what a Colorado agreement says.