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Alabama Non-Compete Agreement Template

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Updated August 04, 2026

An Alabama non-compete agreement is a contract between an employer that prohibits an employee from entering into the same business. A company can require an individual to agree to a non-compete for a period of up to two years and must be specified to a geographical area. Broad or unreasonable agreements are not allowed.

Legally Enforceable?

Yes, a non-compete is legal to preserve a protectable interest in Alabama.[1]

Employees

A non-complete is allowed for employees except those performing a “lawful profession.”[2]

There is no definition for the term “lawful profession,” although, the following court cases have decided specific types:

  • Accountants. Considered a lawful profession.[3]
  • Attorneys. Considered a lawful profession.[4][5]
  • Exterminators (pest). NOT considered a lawful profession.[6]
  • Optometrists. NOT considered a lawful profession.[7]
  • Physicians. Considered a lawful profession.[8]
  • Physical therapists. Considered a lawful profession.[9]
  • Prosthetists. NOT considered a lawful profession.[10]
  • Seasonal tax preparers. NOT considered a lawful profession.[11]
  • Securities brokers. Considered a lawful profession.[12]
  • Veterinarians. Considered a lawful profession.[13]
Independent Contractors

A non-compete with an independent contractor is not enforceable in Alabama.[14]

Sale of a Business

A seller of a business is permitted to be held to a non-compete for a period of up to 1 year. This is conditional upon the buyer continuing the same business after the sale. A specific geographical area for the non-compete must be defined in the agreement.[15]

Dissolution of an Entity

If the partners or shareholders agree, a non-compete is permitted between the owners dissolving business entity. The non-compete would prevent any owner from creating or working in the same or similar business.[16]

What is a “Lawful Profession”?

The Alabama District Court has made several factors to be considered to what constitutes a lawful profession:

  1. Professional training, skill, and experience required to perform certain services;
  2. Delicate nature of the services offered; and
  3. The ability and need to make instantaneous decisions.[17]

Protectable Interest

A protectable interest, which is the basis for a non-compete in Alabama, is defined as the following:

  • Trade secrets. A trade secret is information that is used or intended for use in a trade or business; is included or embodied in a formula, pattern, compilation, computer software, drawing, device, method, technique, or process; is not publicly known and is not generally known in the trade or business of the person asserting that it is a trade secret; cannot be readily ascertained or derived from publicly available information; is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and has significant economic value.[18]
  • Confidential information. Including, but not limited to, pricing information and methodology; compensation; customer lists; customer data and information; mailing lists; prospective customer information; financial and investment information; management and marketing plans; business strategy, technique, and methodology; business models and data; processes and procedures; and company provided files, software, code, reports, documents, manuals, and forms used in the business that may not otherwise qualify as a trade secret but which are treated as confidential to the business entity, in whatever medium provided or preserved, such as in writing or stored electronically.
  • Commercial relationships or contacts. With specific prospective or existing customers, patients, vendors, or clients.
  • Goodwill. Customer, patient, vendor, or client goodwill associated with any of the following:
    • An ongoing business, franchise, commercial, or professional practice, or trade dress.
    • A specific marketing or trade area.
  • Unique training. Specialized and unique training involving substantial business expenditure specifically directed to a particular agent, servant, or employee; provided that such training is specifically set forth in writing as the consideration for the restraint.[19]

Continued Employment

Continued employment is permitted as consideration for a non-compete in Alabama. No outside payment or promise is required.[20]

Maximum Period

2 years is the maximum statutory limit for a non-compete. The term must also include a geographical area which can be specific municipalities, a mile radius, or a general area.[21]

Geographical Area

The duration and geographical area, in combination, must be “reasonable.”

See 4 sample cases below that were approved in the court:

  1. G.L.S & Associates, Inc. v. Keith Rogers (2014): 2 years and a 50-mile radius
  2. J.E. Hanger, Inc. v. Scussel (1996): 2 years and a 50-mile radius
  3. Central Bancshares of the South v. Puckett (1991): 2 years and Statewide
  4. Parker v. Ebsco Industries, Inc. (1968): 1 year and east of the rocky mountains

Blue Penciling Allowed

Yes, a court in Alabama may modify an agreement that is overly broad or unreasonable to be legal in accordance with State law.

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. If a contractually specified restraint does not fall within the limited exceptions set out in subsection (b) of Section 8-1-190, a court may void the restraint in its entirety.[22]