Alabama has codified its non-compete rules in Ala. Code 8-1-190 et seq. (effective 2016), replacing the prior common-law framework. Under the statute, non-competes are generally void as restraints on trade except where they fall within specific authorized categories — most importantly, employment agreements where the employer has a legitimate protectable interest. The statute also caps post-termination non-competes at two years for most employment contexts. Alabama courts blue-pencil overbroad restrictions where the statute permits, but the statutory framework is meant to be strictly construed. The two-year cap and the protectable-interest requirement are the key practical limits.
What is a Enforceability?
An Alabama non-compete is governed by Ala. Code 8-1-190 et seq. The statute authorizes non-competes between commercial entities and employees if: (1) the employer has a protectable interest; (2) the restriction is reasonably necessary to protect that interest; (3) the geographic scope is reasonable; (4) the duration does not exceed two years (with limited exceptions for sale of business goodwill); and (5) the restriction does not impose an undue hardship on the employee. The statute identifies categories of protectable interest, including customer goodwill, trade secrets, confidential information, and specialized training. Alabama courts will blue-pencil overbroad restrictions under Ala. Code 8-1-194.
Red flags to watch for
Ala. Code 8-1-190(c) caps post-termination employment non-competes at two years. A covenant exceeding two years is void on its face unless it falls within the sale-of-business or other narrow statutory exception.
Ala. Code 8-1-190(b) requires the employer to have a protectable interest. Generic 'protection from competition' is not a protectable interest. The covenant must protect customer goodwill, trade secrets, confidential information, or specialized training.
Ala. Code 8-1-190(b)(3) requires geographic scope to be reasonable. A statewide or multi-state restriction without corresponding territory is overbroad and may be narrowed under Ala. Code 8-1-194.
Ala. Code 8-1-190(b) defines who can be subject to a non-compete. 'Professionals' as defined in subsection (b)(4) — physicians, dentists, certain others — are subject to additional limits and in some cases excluded from non-competes.
Ala. Code 8-1-190(b)(5) requires the covenant not to impose undue hardship. A covenant that effectively prevents the employee from earning a living in their trade — without adequate compensation — will be narrowed or struck.
Alabama courts narrow vague activity scope language. The restriction must specifically identify the activities prohibited, tied to the protectable interest.
Alabama public policy applies the statutory framework to Alabama employees regardless of choice-of-law clauses for most employment situations. A clause selecting Texas or Delaware law will not avoid the statute.
Your legal rights
Alabama non-competes are governed by Ala. Code 8-1-190 et seq. (effective 2016), which codified and significantly modified the prior common-law framework. The statute caps duration at two years for most employment contexts, requires a protectable interest, requires reasonable geographic scope, and prohibits undue hardship on the employee. Ala. Code 8-1-194 authorizes blue-pencil modification of overbroad covenants. 'Professionals' as defined in the statute have additional protections. The Alabama Trade Secrets Act (Ala. Code 8-27-1 et seq.) provides independent trade secret protection. Pre-2016 common-law cases remain relevant for matters predating the statute.
Questions to ask before you sign
- 1Does the post-termination period exceed two years? Under Ala. Code 8-1-190(c), longer durations are presumed void.
- 2What specific protectable interest — customer goodwill, trade secrets, confidential information — does this restriction protect?
- 3Is the geographic scope tied to the employer's actual market area?
- 4If you are in a 'professional' category under Ala. Code 8-1-190(b)(4), do additional limits apply?
- 5Does the restriction create undue hardship — does it effectively prevent you from working in your trade?
- 6Are the restricted activities described specifically and tied to the protectable interest?
- 7Does any choice-of-law clause attempt to apply a different state's law?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.