(a) Every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is to that extent void.
(b) Except as otherwise prohibited by law, the following contracts are allowed to preserve a protectable interest:
(1) A contract between two or more persons or businesses or a person and a business limiting their 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 management, organization, or service of the business.
(2) An agreement between two or more persons or businesses or a person and a business to limit commercial dealings to each other.
(3) One who sells the good will of a business may agree with the buyer to refrain from carrying on or engaging in a similar business and from soliciting customers of such business within a specified geographic area so long as the buyer, or any entity deriving title to the good will from that business, carries on a like business therein, subject to reasonable time and place restraints. Restraints of one year or less are presumed to be reasonable.
(4) An agent, servant, or employee of a commercial entity may agree with such entity to refrain from carrying on or engaging in a similar business within a specified geographic area so long as the commercial entity carries on a like business therein, subject to reasonable restraints of time and place. Restraints of two years or less are presumed to be reasonable.
(5) An agent, servant, or employee of a commercial entity may agree with such entity to refrain from soliciting current customers, so long as the commercial entity carries on a like business, subject to reasonable time restraints. Restraints of 18 months or for as long as post-separation consideration is paid for such agreement, whichever is greater, are presumed to be reasonable.
(6) Upon or in anticipation of a dissolution of a commercial entity, partners, owners, or members, or any combination thereof, may agree that none of them will carry on a similar commercial activity in the geographic area where the commercial activity has been transacted.
(Act 2015-465, §1.)
Notes of Decisions
DJR Assocs., LLC v. Hammonds, 241 F. Supp. 3d 1208 (N.D. Ala. 2017).
· cites it 4× “” 6 Alabama’s law relating to non-compete agreements is now codified at Alabama Code §§ 8-1-190 et seq., effective January 1, 2016.”
Ex parte PT Solutions Holdings, LLC, 225 So. 3d 37 (Ala. 2016).
“Second, she contends that prohibiting restraints on the practice of a profession is a fundamental public policy of the State of Alabama, citing §§ 8-1-190, 8-1-196, and 8-1-197, Ala. Code 1975, for support.”
Ranger Env't Servs. LLC v. Foehl (S.D. Ala. 2023).
· cites it 14× “In Alabama, the current restraint-of-trade statute is codified at Alabama Code §§ 8-1-190, et seq., which states that “[e]very contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is…”
Cajun Steamer Ventures LLC v. Thompson (N.D. Ala. 2019).
· cites it 12× “Ala. Code § 8-1-190 (a) (2015).2 Generally, “[c]ontracts restraining employment are looked upon with disfavor, because they tend not only to deprive the public of efficient service, but tend to impoverish the individual.”
C & H Mgmt. Grp. LLC v. DeLuccio (N.D. Ala. 2022).
· cites it 9× “” Ala. Code § 8-1-190 (a). There are six exceptions, two of which are relevant here: (4) An agent, servant, or employee of a commercial entity may agree with such entity to refrain from carrying on or engaging in a similar business within a specified geographic area so long as…”
McGriff, Seibels & Williams Inc v. Sparks (N.D. Ala. 2019).
· cites it 8× “McMahan, the provision prohibiting solicitation, hiring, or employing of MSW’s employees likely is void because under § 8-1-190(b)(1), an agreement not to hire or employ an employee is valid only if the employee “holds a position uniquely essential to the management,…”
Hightower Holding, LLC v. John Gibson (Del. Ch. 2023).
· cites it 5× “62 Ala. Code § 8-1-190 (a). Effective January 1, 2016, Section 8-1-190 superseded the previous version of the statute, which had been codified at Section 8-1-1.”
Dynamic Diagnostics, LLC v. Wilken (M.D. Ala. 2024).
· cites it 2× “Ala. Code §§ 8-1-190 (b)(4) & (5) (restrictive covenants not to compete and not to solicit are allowed to preserve protectable interests); Ala.”
— Ala. Code § 8-1-190(b) — 1 case
Ranger Env't Servs. LLC v. Foehl (S.D. Ala. 2023).
“In Alabama, the current restraint-of-trade statute is codified at Alabama Code §§ 8-1-190, et seq., which states that “[e]very contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is…”
— Ala. Code § 8-1-190(b)(1) — 2 cases
Ranger Env't Servs. LLC v. Foehl (S.D. Ala. 2023).
“In Alabama, the current restraint-of-trade statute is codified at Alabama Code §§ 8-1-190, et seq., which states that “[e]very contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is…”
McGriff, Seibels & Williams Inc v. Sparks (N.D. Ala. 2019).
“McMahan, the provision prohibiting solicitation, hiring, or employing of MSW’s employees likely is void because under § 8-1-190(b)(1), an agreement not to hire or employ an employee is valid only if the employee “holds a position uniquely essential to the management,…”
— Ala. Code § 8-1-190(b)(4) — 2 cases
Cajun Steamer Ventures LLC v. Thompson (N.D. Ala. 2019).
“Ala. Code § 8-1-190 (a) (2015).2 Generally, “[c]ontracts restraining employment are looked upon with disfavor, because they tend not only to deprive the public of efficient service, but tend to impoverish the individual.”
Ranger Env't Servs. LLC v. Foehl (S.D. Ala. 2023).
“In Alabama, the current restraint-of-trade statute is codified at Alabama Code §§ 8-1-190, et seq., which states that “[e]very contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is…”
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