by Al Vreeland
A bill signed into law over the summer will significantly strengthen Alabama employers’ ability to enforce noncompete agreements when the law takes effect January 1, 2016.
The state’s old noncompete statute makes a broad statement that noncompete agreements are void. It then creates several exceptions into which courts have shoehorned the modern version of the noncompete.
Alabama courts have generally stated that noncompetes are disfavored, but they can be enforced when they are related to a legitimate interest (e.g., protecting customer relationships or proprietary information) and are reasonably limited in time and geographic scope. That formula gave an enormous amount of discretion to judges to decide whether noncompetes would be enforceable and left employers with uncertainty.