Alabama non-compete law

Pay figure in the law

None found in the statutes we read

Separate rules for professions

None found in the statutes we read

Statutes and official texts quoted

Ala. Code § 8-1-190(a); Ala. Code § 8-1-190(b)(4); Ala. Code § 8-1-190(b)(5); Ala. Code § 8-1-190(b)(3); Ala. Code § 8-1-191(b); Ala. Code § 8-1-192; Ala. Code § 8-1-193; Ala. Code § 8-1-194; Ala. Code § 8-1-197

Is a non-compete allowed?

Alabama voids contracts restraining anyone from exercising a lawful profession, trade, or business, except as provided in § 8-1-190.

“Every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is to that extent void.”
Ala. Code § 8-1-190(a)

An employee may agree not to engage in a similar business within a specified area where the employer carries on a like business, subject to reasonable time and place limits; two years or less is presumed reasonable.

“An agent, servant, or employee of a commercial entity may agree with such entity to refrain from carrying on or engaging in a similar business within a specified geographic area so long as the commercial entity carries on a like business therein, subject to reasonable restraints of time and place. Restraints of two years or less are presumed to be reasonable.”
Ala. Code § 8-1-190(b)(4)

Notice and signing

To be valid, an agreement under the article must be in writing, signed by all parties, and supported by adequate consideration.

“In order to be valid, any contract or agreement executed pursuant to this article shall be reduced to writing, signed by all parties, and be supported by adequate consideration.”
Ala. Code § 8-1-192

What the employer must protect

Protectable interests include trade secrets, confidential information, commercial relationships, and good will; job skills alone are not protectable interests.

“Job skills in and of themselves, without more, are not protectable interests.”
Ala. Code § 8-1-191(b)

Exceptions

A seller of a business's good will may agree not to compete or solicit within a specified area, subject to reasonable limits; one year or less is presumed reasonable. Partners or owners may also agree upon dissolution.

“One who sells the good will of a business may agree with the buyer to refrain from carrying on or engaging in a similar business and from soliciting customers of such business within a specified geographic area”
Ala. Code § 8-1-190(b)(3)

Non-solicitation and no-hire rules

An employee may agree not to solicit current customers; 18 months, or as long as post-separation consideration is paid (whichever is greater), is presumed reasonable.

“Restraints of 18 months or for as long as post-separation consideration is paid for such agreement, whichever is greater, are presumed to be reasonable.”
Ala. Code § 8-1-190(b)(5)

If it is challenged

A court may partly void and reform an overly broad restraint, or void entirely a restraint that does not fit the listed exceptions.

“If a contractually specified restraint is overly broad or unreasonable in its duration, a court may void the restraint in part and reform it to preserve the protectable interest or interests.”
Ala. Code § 8-1-193

The party seeking enforcement bears the burden of proof on every element; the party resisting bears the burden on undue hardship if raised.

“The party seeking enforcement of the covenant has the burden of proof on every element. The party resisting enforcement of the covenant has the burden of proving the existence of undue hardship, if raised as a defense.”
Ala. Code § 8-1-194

Which state’s law and court

The article expresses fundamental public policy and applies instead of foreign law where foreign law would violate that policy.

“this article shall govern and shall be applied instead of any foreign laws that might otherwise be applicable in those instances when the application of those foreign laws would violate a fundamental public policy expressed in this article.”
Ala. Code § 8-1-197

Federal rules

On September 5, 2025, the FTC moved to dismiss its appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC and to accede to vacatur of the Non-Compete Clause Rule. FTC press release, Sept. 5, 2025

The FTC's final rule removes the Non-Compete Rule (16 CFR part 910) from the Code of Federal Regulations. 91 Fed. Reg. (Feb. 12, 2026), FR Doc. 2026-02866

Before you sign, or before you assume you are bound

1. Find every restrictive clause: non-compete, non-solicitation, no-hire and confidentiality are separate promises with separate rules.
2. Note how long each lasts and what area or customers it covers.
3. Check which state’s law the agreement picks and where disputes must be heard.
4. Compare your pay and your job with the Alabama rules above.

Check your state with the non-compete checker.

Common questions

Are non-competes enforceable in Alabama?

Alabama voids contracts restraining anyone from exercising a lawful profession, trade, or business, except as provided in § 8-1-190. (Ala. Code § 8-1-190(a)).