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An Alabama non-solicitation agreement is a legal form that, once signed, prevents an employee from “stealing away” an employer’s clients and/or customers during and after employment. Companies use the contract to safeguard their protectable interests, which are intangible assets that are vital to a business’ competitive advantage. The covenant can exist as a standalone contract or as a provision within a broader employment contract.
Laws
- Statutes: § 8-1-190, § 8-1-191
- Requirements / Recommendations: Non-solicitation agreements are permitted and enforceable in Alabama so long they meet the following criteria:
- The agreement must be enforcing a “protectable interest,” which includes a) trade secrets, b) confidential information, c) commercial relationships, d) customer goodwill, and e) specialized training (job skills do not apply). (§ 8-1-191)
- The former employee must engage in a “like business” for agreements specific to the solicitation of customers (§ 8-1-190(b)(3))
- The term is no longer than 1.5 years (18 months). (§ 8-1-190(b)(5))
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