Any Alabama guide to non-compete agreements starts with one rule. Ala. Code § 8-1-190 voids any restraint on a lawful profession, trade or business unless the statute itself allows it.[1] An Alabama non-compete agreement is a written contract in which a worker promises not to compete with a company for a set time and in a set area. Companies use it to protect trade secrets and customer relationships.
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current Alabama law. If you notice an error or outdated information, please contact us.
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If you need a version that is not specific to Alabama, start from the general non-compete agreement template.
The Alabama template covers these points:
A non-compete agreement is a contract in which a worker agrees not to work for a rival or start a rival firm for a set time and place. In Alabama, a promise like this is void unless Ala. Code § 8-1-190 allows it.[1]
A non-solicitation clause is a close cousin. The worker agrees not to approach the company's staff, customers or vendors.
Two kinds of people sign this form most often. A company asks a worker to sign it, or a worker agrees to it as a condition of the job. The form names them the company and the agent, and the agent can be an employee or an independent contractor.
Alabama regulates non-competes in Ala. Code § 8-1-190. The statute voids every contract that restrains someone from a lawful profession, trade or business, except in the cases it lists. A non-compete is therefore enforceable only where the statute allows the restraint, and only on the conditions the statute attaches.[1]
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.
Beyond that general rule, the statute names these arrangements:
Alabama's statute attaches reasonable limits of time and place to a non-compete and presumes certain lengths reasonable. An employee's agreement not to compete in a similar business is presumed reasonable at two years or less. A restraint on soliciting is presumed reasonable at 18 months, or for as long as post-separation consideration is paid for the agreement, whichever is greater.[1]
| Type of restraint | Presumed reasonable |
|---|---|
| Employee agreeing not to compete | Two years or less |
| Restraint on soliciting | 18 months, or for as long as post-separation consideration is paid for the agreement, whichever is greater |
| Seller of a business agreeing not to compete | One year or less |
An employee may agree to stay out of a similar business within a specified geographic area, but only while the company carries on a like business there. Time and place limits must stay reasonable.[1]
Alabama's statute has its own rules for two business events. A person who sells the good will of a business may agree with the buyer not to compete. The partners, owners or members of a company that is dissolving, or about to dissolve, may agree not to compete with one another.[1]
The statute is easiest to understand through plain cases. Each example below follows the rules set out above, and each one turns on the same question: does the statute allow this kind of restraint, and for how long?
Read every clause before you write anything in. When both sides agree on the terms, work through the form from top to bottom. You can also fill in the downloaded PDF online before you print it.
Most problems with a non-compete come from blanks left open or terms that nobody read closely. These habits keep the agreement clear for both sides and leave less room for a later dispute over what was meant.
A short list of questions can catch most problems before a non-compete takes effect. Ask them of the other side, and ask them of yourself, because both parties live with the answers for the full term of the agreement.
In Alabama, a non-compete is void unless Ala. Code § 8-1-190 allows it. The answers below cover how enforceable these agreements are, when a court may uphold one, and what a worker can be bound to.[1]
In Alabama, a non-compete is enforceable only to the extent Ala. Code § 8-1-190 allows it. The statute voids every contract that restrains someone from a lawful profession, trade or business otherwise than as the section provides.[1]
Where the statute permits a restraint, it is enforceable on the conditions the statute attaches. Where it does not, the agreement is void to that extent.[1]
That turns on whether the restraint fits the statute. A restraint beyond it is void to that extent. For an employee who agrees not to compete, two years or less is presumed reasonable.[1]
Only within the limits the statute sets. An employee may agree to stay out of a similar business within a specified geographic area while the employer carries on a like business there. Time and place limits must be reasonable.[1]
General information, not legal or tax advice.
