Allowed if reasonable

Non-compete law in Alabama

Alabama's Restrictive Covenants Act (Ala. Code §§ 8-1-190 to 8-1-197) voids every restraint on a lawful profession, trade or business except six listed kinds of contract, including an employee's agreement not to compete within a specified geographic area, subject to reasonable time and place limits. A restraint of two years or less is presumed reasonable for employees (18 months or the period of post-separation payments, if longer, for customer non-solicitation; one year for a seller of goodwill). The agreement must be written, signed and supported by consideration, the party enforcing bears the burden of proof, and a court may reform an overbroad covenant. The Act does not remove professional exemptions recognized by Alabama law.

Last verified · confidence medium. Clauseworthy is not a law firm and does not give legal advice.

Employee non-competes
Not banned; conditions apply
Pay floor
None in the statute
Duration
No hard cap. Restraints of two years or less are presumed reasonable for an employee's covenant not to compete (§ 8-1-190(b)(4)); the restraint must be reasonable in time and place and limited to a specified geographic area in which the employer carries on a like business.
Notice
No statutory notice period. The contract must be reduced to writing and signed by all parties (§ 8-1-192).
Consideration
Must be supported by adequate consideration (§ 8-1-192). Specialized training counts as a protectable interest only if the training is specifically set out in writing as the consideration for the restraint (§ 8-1-191(a)(5)); job skills alone are not a protectable interest (§ 8-1-191(b)).

Exceptions and special rules

  • Sale of a business: the statute allows a non-compete given by a seller.
  • Seller of a business's goodwill may agree with the buyer not to carry on a similar business or solicit its customers within a specified geographic area, subject to reasonable time and place restraints; one year or less presumed reasonable (§ 8-1-190(b)(3))
  • On or in anticipation of dissolution of a commercial entity, partners, owners or members may agree not to carry on similar commercial activity in the area where the activity was transacted (§ 8-1-190(b)(6))
  • Anti-hiring agreements between persons/businesses for employees holding positions uniquely essential to the business, and agreements to limit commercial dealings to each other (§ 8-1-190(b)(1)-(2))
  • Statute does not eliminate any professional exemption recognized by Alabama law (§ 8-1-196); the statute itself does not list which professions
  • Professionals (as recognized by Alabama law). Section 8-1-196 preserves any professional exemption recognized by Alabama law; the Act itself does not define 'professional' or name professions. Which occupations are exempt is a case-law question not answered by the statute text. (Ala. Code § 8-1-196)

Non-solicitation clauses

An employee may agree with the employer not to solicit current customers while the employer carries on a like business, subject to reasonable time restraints; 18 months, or as long as post-separation consideration is paid for the agreement if longer, is presumed reasonable (§ 8-1-190(b)(5)). Anti-hiring agreements are separately allowed for uniquely essential employees (§ 8-1-190(b)(1)).

Contracts naming another state's law

The Act expresses fundamental public policy of Alabama and applies instead of any foreign law whose application would violate that policy (§ 8-1-197).

Remedies

Injunctive and other equitable relief; actual damages or lawful liquidated damages; contract remedies including attorney's fees or costs if provided in the contract or by law (§ 8-1-195). Party seeking enforcement has the burden on every element; the resisting party must prove any undue-hardship defense (§ 8-1-194). Court may void an overbroad or over-long restraint in part and reform it, and may void in its entirety a restraint outside the § 8-1-190(b) categories (§ 8-1-193).

Which agreements it covers

Act 2015-465 took effect January 1, 2016 (section 10 of the enrolled bill, HB 352, 2015 Regular Session). The act text contains no retroactivity clause; its section 9 repealed former § 8-1-1. Agreements signed before 2016-01-01 are presumably outside this text (secondary law-firm sources say they remain judged under prior law; not verified in a primary).

Recent changes

  • 2016-01-01. Act 2015-465 (HB 352) took effect: repealed § 8-1-1 and enacted §§ 8-1-190 to 8-1-197 (presumptive durations, writing/signature/consideration, reformation, burden of proof). No later amendment appears in the Code's section histories as of 2026-10-14. Source

Primary sources

Checker

What the statute says for these facts

Four facts. The answer leads with what the statute does at that pay, then names any change already enacted, then quotes the details with their citations.

The person who would sign

Several statutes treat contractors differently.

Other states on file