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Alabama Non-Compete Agreement Template

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Alabama Non-Compete Agreement Template

Updated February 18, 2024

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 (2) 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]


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]


  1. Section 8-1-190
  2. Section 8-1-196
  3. Burkett v. Adams (1978)
  4. Rule 5.6
  5. Pierce v. Hand, Arendall, Bedsole, Greaves & Johnston (1996)
  6. Dobbins v. Getz Exterminators (1980)
  7. Board of Optometry v. Eagerton (1981)
  8. Odess v. Taylor (1968)
  9. Benchmark Medical Holdings, Inc. v. Barnes (2004)
  10. J.E. Hanger, Inc. v. Scussel (1996)
  11. H&R Block Eastern Enterprises Inc. v. Village Tax Team (2005)
  12. G.L.S & Associates, Inc. v. Keith Rogers (2014)
  13. Friddle v. Raymond (1991)
  14. Premier Indus. Corp. v. Marlow (1974)
  15. Section 8-1-190
  16. Section 8-1-190(6)
  17. Friddle v. Raymond (1991)
  18. Section 8-27-2(1)
  19. Section 8-1-191
  20. Daughtry v. Capital Gas Company (1970)
  21. Section 8-1-190(b)(4)
  22. Section 8-1-193