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Alabama Non-Compete Agreement Template

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The Alabama Non-Compete Agreement is a legal document, used to stop an individual or business from competing with a business once these parties have worked together. In most cases when two businesses work together, each may become aware of sensitive information such as business secrets, client lists, and other possible competitive practices used by the concerned business. This document is most commonly utilized during the hiring process with the knowledge that an individual may be exposed to sensitive company information. Such knowledge can greatly impact the success of a business if it is abused or disseminated in an irresponsible manner.

Businesses who wish to protect their Trade Secrets and Practices should use this document at the start of a professional relationship such as when a new hire or a new contract occurs. This paperwork will ensure the new professional relationship will be fully aware that it is not allowed to use any of the concerned business’ information or conduct affairs, in any capacity, using the competitive secrets gained from the entity using this form, for a well defined and reasonable amount of time. This will serve to protect a business entity even after the relationship has terminated.

This contract template should be obtained through the buttons on this page. Each button below the preview picture will give the user access to a workable version of this template as the file type he or she has selected. Make sure to print enough copies so that each signature party will be able to retain a signed original.

Non-compete agreements are governed by Sections 8-1-190 to 8-1-197 of the Alabama Code in the state of Alabama as of January 1, 2016, Section 8-1-1 of the Alabama Code and any law that is in conflict with the Restrictive covenants act have been repealed. Ala. Code 1975, §§ 8-1-190 to 8-1-197) allows for the following contracts to be enforced to preserve a protectable interest subject to reasonable time and place constraints.


A contract limiting a person or business’ ability to hire or employ the agent, servant, or employees of a party to the contract where the agent, servant, or employee holds a position uniquely essential to the business’ management, organization, or service. An agreement to limit a person or business’ commercial dealings to each other. If selling a business, a noncompete and non-solicitation agreement with the buyer. A noncompete agreement between a commercial entity and its agent, servant, or employee. A non-solicitation agreement between a commercial entity and its agent, servant, or employee. If dissolving a commercial entity, a noncompete agreement with partners, owners, or members.

GuideSummary of New (2016) Alabama Non-Compete Laws

Laws – Section 8-1-190

How to Write

1 – Two Vital Pieces Of Information Must Be Supplied In The First Paragraph

The name of the company that shall protect their business, client lists and/or any type of intellectual property should be supplied onto the first blank space in this paragraph. Submit the name of the person who shall agree not to compete with the business for a specific amount of time after resignation on the second blank line.

2 – Indicate What The Disclosing Business Will Allow And Forbid

The “Business Practices” paragraph was developed to protect the concerned Business’ services and products against unfair competition from the Recipient Signature Party. Check the corresponding check box to apply the terms within it to this paperwork’s effect.If the concerned Business wishes to protect its Clients from any solicitations or unapproved contact by the Recipient Signature Party (whether the Recipient Signature Party is representing itself or a third-party such as a competitor) the second paragraph, labeled “Clients/Customers” should be marked.The concerned business may impose a restriction forbidding the Recipient Signature Party from engaging in any type of business activity with any Competitors. The “General Competitor(s)” should be check marked to apply these terms.If the concerned business only wishes to prevent the Recipient Signature Party from interacting with “Specific Competitors” then, the fourth paragraph’s checkbox should be marked, and the forbidden competitors should be listed on the blank lines provided.If the Recipient Signature Party should be forbidden from any interaction with any past or present employees/contractors of the concerned business, the last paragraph in this section should be marked.

3 –  Discuss The Period Of Effect

The concerned business will need to define precisely how long it expects the Recipient Signature Party to adhere to the terms detailed in this contract. To do this we will need to define how long this contract remains in effect and when it goes into effect. In the statement beginning with “Recipient Warrants and Guarantees” record how long this period stays effective on the blank space provided.Next, one of two statements must be checked to indicate when this Period of Effect begins. If the Period of Effect begins as of the execution (Date of Signature) of this document, then mark the first checkbox. If the Period of Effect begins only when or if the Recipient Recipient Signature Party’s relationships with the concerned business is terminated, then mark the second box.

4 – Address The Possibility Of A Purchase Option

An option to purchase a release from this agreement’s terms may be provided by the concerned business, however, it will need to be presented by the time of signing. In the “Purchase Options” section, mark the first checkbox and enter the amount of money the concerned Business requires to nullify the terms of this contract. If the concerned Business will not provide such an option, the second statement’s checkbox will need to be marked.

5 – Define Where This Contract Will Be Enforced

The Jurisdiction where this document’s effect is governed should be documented on the blank line in the section labeled “5. Jurisdiction.” Ideally, this should be reported as a County/City and State, but you can only simply report the State where this contract is executed.

6 –  Make Sure Each Party Is Full Aware Of This Document’s Contents

Titled Sections and Subsections – The recipient of the document must carefully review and be prepared to sign, stating that they understand sections 6 through 13.

7 – Some Final Items From Each Signature Party Are Required.

Now locate the section titled “13. Entire Agreement.” Once each party has read and decided to agree to the terms in this agreement, it will need to be signed to be in effect. To begin, enter the Date of this paperwork’s execution across the three blank spaces in the “In Witness…” statement at the end of this agreement.Two columns below this statement have been supplied strictly for this contract’s execution. The concerned business issuing these terms should have an authorized representative sign the “Signature” line under the words “The Company.” This Signature Party will need to Print his or her Name and Title on the blank line labeled “Print Name And Title.” Finally, he or she must provide the Date these items were supplied. Note: This contract must be signed on the Execution Date above.The Recipient Signature Party will also have a column to satisfy. The party who has agreed to these terms must sign the “Signature” line under the bold words “Recipient.” Below the Signature, this party must print his or her Name and provide a Signature Date. This must be done on the execution Date documented in the “In Witness…” statement above.

Both parties must retain copies of the document for record keeping.