Non-Compete Agreement - Alabama

DISCLAIMER:
This template is provided for informational and educational purposes only and does not constitute legal advice. No attorney–client relationship is created by your use of this document. Because laws, regulations, and industry practices evolve, this form should be reviewed, customized, and approved by qualified counsel licensed in the relevant jurisdiction before use.

ALABAMA EMPLOYEE NON-COMPETE AGREEMENT

(Comprehensive Template)

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

1. Parties
   This Non-Compete Agreement (the “Agreement”) is entered into effective as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
   a. [EMPLOYER LEGAL NAME], an [Alabama ☐ corporation / ☐ limited liability company / ☐ other] with its principal place of business at [ADDRESS] (“Employer”); and
   b. [EMPLOYEE LEGAL NAME], residing at [ADDRESS] (“Employee”).
   Employer and Employee are each a “Party” and collectively the “Parties.”

2. Recitals
   a. Employer is engaged in the business of [BUSINESS DESCRIPTION] (the “Business”).
   b. Employee will serve as [POSITION] and, in that capacity, will have access to Employer’s Confidential Information and goodwill.
   c. Employer possesses one or more protectable interests identified in Ala. Code § 8-1-191, as specifically described in [ATTACHMENT / DESCRIPTION].
   d. In consideration of [INITIAL EMPLOYMENT / PROMOTION / NEW DUTIES], the compensation described below, and the mutual promises contained in this Agreement, the Parties agree as follows.
   e. Role gate. This form is intended for an agent, servant, or employee of a commercial entity. It must not be used where a professional exemption recognized by Alabama law applies without Alabama counsel's written approval. See Ala. Code § 8-1-196.

II. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below. Defined terms appear in bold-type throughout.

1. “Affiliate” means, with respect to any specified entity, any other entity that directly or indirectly controls, is controlled by, or is under common control with such entity.

2. “Confidential Information” means all non-public information, whether oral, written, electronic, or in any other form, relating to Employer or its Affiliates, including but not limited to Trade Secrets, customer lists, pricing, marketing strategies, product roadmaps, financial data, software, source code, and personnel information.

3. “Protected Customers” means Employer's current customers as of the Termination Date with whom Employee had material business contact during the [12] months preceding that date.

4. “Restricted Period” means the period commencing on the Termination Date and continuing for [UP TO 24] months thereafter. Under Ala. Code § 8-1-190(b)(4), two years or less is presumed reasonable for a qualifying employee non-compete, but all other requirements still apply.

5. “Restricted Territory” means [SPECIFIED GEOGRAPHIC AREA], limited to the area in which Employer carries on a like business and Employee materially worked or developed protected goodwill.

6. “Termination Date” means the date Employee’s employment with Employer ends for any reason.

7. “Trade Secrets” means information Employer identifies in [ATTACHMENT] that Alabama counsel confirms qualifies for trade-secret protection under current law.

III. OPERATIVE PROVISIONS

1. Employment Status
   a. Employment is and shall remain at-will unless otherwise provided in a separate written agreement executed by both Parties.
   b. Nothing herein shall be construed to create any fixed term of employment.

2. Consideration
   a. As consideration for Employee’s obligations under this Agreement, Employer shall provide:
   i. [Base salary amount];
   ii. [Sign-on bonus/equity grant/other consideration, if any]; and
   iii. [OTHER NEW, SPECIFIC CONSIDERATION].
   b. This Agreement must be in writing, signed by all Parties, and supported by adequate consideration. Ala. Code § 8-1-192. The drafter must not rely on the former pinpoint to “§ 8-1-190(a)(3),” which does not state a consideration rule.

3. Conditions Precedent
   Employee’s receipt of the consideration described above is expressly conditioned upon Employee’s execution of this Agreement and ongoing compliance with its terms.

IV. REPRESENTATIONS & WARRANTIES

1. Employee Representations
   a. Employee is not subject to any contractual or legal restriction that would prohibit full performance under this Agreement.
   b. Employee will promptly disclose to Employer any agreement that could restrict Employee’s duties.

2. Employer Representations
   Employer is duly organized, validly existing, and in good standing under the laws of the State of Alabama and has full power and authority to enter into and perform this Agreement.

3. Survival
   The representations and warranties set forth in this Section IV shall survive termination of Employee’s employment and expiration of the Restricted Period.

V. COVENANTS & RESTRICTIONS

1. Non-Competition
   During the Restricted Period, Employee shall not, within the Restricted Territory, directly or indirectly:
   a. perform the following services, which are the same as or materially similar to services Employee performed for Employer during the last [12] months of employment, for a business carrying on a like business: [DESCRIBE NARROWLY]; or
   b. own or control a competing business principally to perform those services. Passive ownership of less than [2]% of a publicly traded company is excluded.

2. Non-Solicitation of Customers
   For [UP TO 18] months after the Termination Date, Employee shall not solicit a Protected Customer for products or services competitive with Employer's like business. Under Ala. Code § 8-1-190(b)(5), eighteen months—or the longer period during which post-separation consideration is paid—is presumed reasonable for a qualifying current-customer restriction.

3. No-Hire / Personnel Restriction
   [OMIT UNLESS ALABAMA COUNSEL CONFIRMS THE RESTRICTION FITS ALA. CODE § 8-1-190(b)(1), INCLUDING THE “UNIQUELY ESSENTIAL” POSITION REQUIREMENT.]

4. Confidentiality
   Employee shall hold all Confidential Information in strict confidence and shall not disclose or use such information except as required in the course of employment. This covenant survives indefinitely with respect to Trade Secrets and for a period of five (5) years with respect to all other Confidential Information.

5. Return of Property
   Upon the Termination Date, Employee shall immediately return to Employer all property, documents, and media containing Confidential Information.

VI. DEFAULT & REMEDIES

1. Events of Default
   Any breach or threatened breach of Sections V.1–V.4 constitutes an “Event of Default.”

2. Notice & Cure
   Employer may provide written notice of any alleged breach and, where feasible, grant Employee five (5) business days to cure; provided, however, that no cure period is required for breaches of confidentiality or misappropriation of Trade Secrets.

3. Injunctive Relief
   For an actual or threatened breach, Employer may seek appropriate injunctive or other equitable relief under Ala. Code § 8-1-195(a)(1), subject to all required proof, defenses, and security requirements.

4. Cumulative Remedies
   Available relief may include actual damages, lawful liquidated damages if validly provided, and contract remedies authorized by Ala. Code § 8-1-195. Nothing here eliminates defenses available at law or equity.

5. Attorneys’ Fees
   In an action to enforce this Agreement, the prevailing Party may seek reasonable attorneys’ fees and costs under this contractual provision to the extent enforceable under Ala. Code § 8-1-195(a)(3).

VII. RISK ALLOCATION

1. No Automatic Risk Transfer
   This Agreement does not impose an employee indemnity, an uncapped liability declaration, or an automatic damages measure. A claimant must prove entitlement to relief under Section VI and applicable law.

VIII. DISPUTE RESOLUTION

1. Governing Law
   This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama, without regard to its conflict-of-laws principles.

2. Forum Selection
   The Parties irrevocably submit to the exclusive jurisdiction of the state courts located in [COUNTY], Alabama for any action arising out of or relating to this Agreement.

3. Arbitration [OPTIONAL]
   a. If the Parties check the box below, any claim or dispute shall be resolved by binding arbitration administered by the American Arbitration Association (“AAA”) under its Employment Arbitration Rules:
   ☐ Arbitration Agreed  ☐ Arbitration Declined
   b. Judgment on the award rendered by the arbitrator may be entered in any court of competent jurisdiction.

4. Jury Waiver [OPTIONAL]
   IF (AND ONLY IF) ENFORCEABLE UNDER APPLICABLE LAW, THE PARTIES KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.

5. Equitable Relief Preservation
   Nothing in this Section VIII shall limit Employer’s right to seek injunctive or other equitable relief in a court of competent jurisdiction to enforce Sections V.1–V.4.

IX. GENERAL PROVISIONS

1. Amendment & Waiver
   No amendment or waiver of any provision of this Agreement is effective unless it is in writing and signed by both Parties. A waiver of any breach is not a waiver of any other breach.

2. Assignment
   a. Employer may assign this Agreement to any successor or Affiliate without Employee’s consent.
   b. Employee may not assign or delegate any rights or obligations under this Agreement without Employer’s prior written consent.

3. Successors & Assigns
   This Agreement inures to the benefit of and is binding upon the Parties and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.

4. Severability & Reformation
   If a restraint is overly broad or unreasonable in duration, a court may void it in part and reform it to preserve a protectable interest. If it falls outside Ala. Code § 8-1-190(b), the court may void it entirely. See Ala. Code § 8-1-193.

5. Integration
   This Agreement constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all prior or contemporaneous oral or written agreements.

6. Counterparts; Electronic Signatures
   This Agreement may be executed in one or more counterparts (including by electronic means), each of which is deemed an original and all of which together constitute one and the same instrument.

X. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

Sources and References

• Alabama Legislature, current Code portal, Ala. Code §§ 8-1-190 through 8-1-197: https://alison.legislature.state.al.us/code-of-alabama?section=8-1-190
• 2025 Code text (mirror used because the official portal returned only its JavaScript shell through Sofya): https://law.justia.com/codes/alabama/title-8/chapter-1/article-10/section-8-1-190/