Alabama non compete law restricts non competes by statute: alabama’s Restrictive Covenants Act (for agreements since January 1, 2016) starts from the rule that any contract restraining a lawful profession, trade or business is void, then allows a short list of covenants to preserve a protectable interest — trade secrets, confidential information, customer goodwill, specialized training (job skills alone do not count);
an employee may agree not to engage in a similar business in a specified area, with restraints of two years or less presumed reasonable, and customer non solicits of 18 months (or as long as post-separation pay continues) presumed reasonable.
This guide gives the exact Alabama non compete law rule with the date we verified it, the threshold and carve-outs where they exist, what a court does with an overbroad term, and what to do if you signed one. Rules verified against the statute on 2026-10-08; confirm the current rule with Alabama Department of Labor or an attorney before you rely on it.
Alabama Non Compete Law at a Glance
| Status | Restricted by statute |
| Income threshold | No earnings threshold |
| Statute | Ala. Code 8-1-190 to 8-1-197 |
| Notice / consideration | No statutory notice rule |
| Carve-outs | Professionals (physicians, lawyers and the like) are outside the Act’s employee covenants under long-standing Alabama case law; no-hire agreements only for… |
| Overbroad terms | reform — a court may void an overbroad restraint in part and reform it to preserve the protectable interest (8-1-193); the party challenging the covenant now carries the burden on undue hardship |
| In effect since | January 1, 2016 (2015 Ala. Acts, HB 352), replacing 8-1-1 |
In This Alabama Non Compete Law Guide:
Is a Non Compete Enforceable Under Alabama Non Compete Law?
Alabama’s Restrictive Covenants Act (for agreements since January 1, 2016) starts from the rule that any contract restraining a lawful profession, trade or business is void, then allows a short list of covenants to preserve a protectable interest — trade secrets, confidential information, customer goodwill, specialized training (job skills alone do not count); an employee may agree not to engage in a similar business in a specified area,
with restraints of two years or less presumed reasonable, and customer non solicits of 18 months (or as long as post-separation pay continues) presumed reasonable.
The statute is Ala. Code 8-1-190 to 8-1-197. The carve-outs matter: professionals (physicians, lawyers and the like) are outside the Act’s employee covenants under long-standing Alabama case law; no-hire agreements only for employees uniquely essential to the business; sale-of-business covenants presumed reasonable for one year or less.
Alabama Non Compete Law at a Glance
Rules verified against the statute on 2026-10-08; confirm the current rule with Alabama Department of Labor or an attorney before you rely on it. The statute row is where to check it yourself.
| Status | Restricted by statute |
| What the rule says | Alabama’s Restrictive Covenants Act (for agreements since January 1, 2016) starts from the rule that any contract restraining a lawful profession, trade or business is void, then allows a short list of covenants to preserve a protectable interest — trade secrets, confidential information, customer goodwill, specialized training (job skills alone do not count); an employee may agree not to engage in a similar business in a specified area, with restraints of two years or less presumed reasonable, and customer non solicits of 18 months (or as long as post-separation pay continues) presumed reasonable. |
| Income threshold | No earnings threshold |
| Statute | Ala. Code 8-1-190 to 8-1-197 |
| Carve-outs | Professionals (physicians, lawyers and the like) are outside the Act’s employee covenants under long-standing Alabama case law; no-hire agreements only for employees uniquely essential to the business; sale-of-business covenants presumed reasonable for one year or less |
| What a court does with an overbroad term | reform — a court may void an overbroad restraint in part and reform it to preserve the protectable interest (8-1-193); the party challenging the covenant now carries the burden on undue hardship |
| In effect since | January 1, 2016 (2015 Ala. Acts, HB 352), replacing 8-1-1 |
The Reasonableness Test Under Alabama Non Compete Law
Alabama law starts from the position that a contract restraining someone’s trade or profession is void, then lets an employer enforce one only if it fits a specific exception and protects a real business interest. Protectable interests include trade secrets, confidential information, customer relationships and goodwill, and specialized training. Courts then look at whether the time limit, the geographic area and the type of work covered are reasonable.
A worker can also argue that enforcing the covenant would cause undue hardship, such as being unable to earn a living in their field.
Under Alabama law a non-compete of 2 years or less after employment ends is presumed reasonable, and so is a customer non-solicit of 18 months or less. Courts have generally upheld restraints tied to the territory where the worker actually served customers, and they may narrow or strike restraints that are longer, cover a wider area, or bar unrelated work.
With an overbroad term the court will reform — a court may void an overbroad restraint in part and reform it to preserve the protectable interest (8-1-193); the party challenging the covenant now carries the burden on undue hardship.
Alabama Non Compete Law If You Were Fired or Laid Off
The Alabama statute does not treat a worker who was fired or laid off differently from a worker who quit. A court may still weigh how the job ended when it decides whether enforcement is fair or would cause undue hardship, so the circumstances of a layoff can matter.
What the Employer Must Give Under Alabama Non Compete Law
Alabama courts have generally accepted continued employment as enough consideration for a non-compete signed by a current employee. A raise, bonus, promotion or access to confidential information makes the agreement harder to challenge, so most workers should check what they received when they signed.
Non Solicit and Non Disclosure Agreements Under Alabama Non Compete Law
A non-solicit bars contacting the former employer’s customers or recruiting its employees but still lets the worker take a job in the same field. Courts often find that easier to enforce than a full non-compete. A non-disclosure agreement protects trade secrets and confidential information, can last longer than either, and Alabama courts generally enforce it when the information is genuinely confidential.
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If You Already Signed One: Alabama Non Compete Law in Practice
Read the agreement carefully for the exact time limit, the geographic area, the activities it restricts and what triggers it, and get a copy if you no longer have one. Ask your former employer in writing for a release or a narrower waiver, especially if you were laid off or the new job does not compete for the same customers.
Before accepting a new offer, consider having an Alabama employment lawyer review the agreement, because the answer depends on its wording.
An Alabama employer can ask a court for an injunction ordering the worker to stop the competing work or customer contact, and courts may modify an overbroad covenant before enforcing it. The employer can also seek money damages for losses caused by the breach, and it can recover attorney’s fees only if the agreement includes a fee-shifting clause.
The Federal Rule and Alabama Non Compete Law
The Federal Trade Commission adopted a nationwide non compete ban in 2024, but a federal court blocked it before it took effect and the FTC later withdrew its defense; as of October 2026 there is no federal ban in force, so Alabama non compete law controls.
Other Alabama Non Compete Law Rules to Know
Alabama courts treat licensed professionals, including physicians, lawyers and accountants, as outside the statute’s exceptions, so a non-compete limiting that professional practice is generally unenforceable. The covenant must also be in writing and signed by all parties.
Think your employer owes you money or broke the law?
A non compete is a contract question, and the answer turns on your own agreement’s words. Your state bar runs a lawyer-referral service that connects you with an employment attorney for a short, low-cost first consultation — find it through the American Bar Association referral directory. Free legal aid may also help if your income qualifies.
Alabama — the bottom line
- Alabama non compete law is a statute with its own limits — the first thing to check is which side of the line your agreement falls on.
- Under Alabama non compete law, an overbroad term is reform — a court may void an overbroad restraint in part and reform it to preserve the protectable interest (8-1-193); the party challenging the covenant now carries the burden on undue hardship — the words of your own agreement decide more than the headline rule.
- Alabama non compete law does not stop you from taking a new job in a different field or outside the restricted area — read the scope before you turn an offer down.
Frequently Asked Questions
Are non competes enforceable in Alabama?
Sometimes.
Alabama’s Restrictive Covenants Act (for agreements since January 1, 2016) starts from the rule that any contract restraining a lawful profession, trade or business is void, then allows a short list of covenants to preserve a protectable interest — trade secrets, confidential information, customer goodwill, specialized training (job skills alone do not count); an employee may agree not to engage in a similar business in a specified area,
with restraints of two years or less presumed reasonable, and customer non solicits of 18 months (or as long as post-separation pay continues) presumed reasonable.
Is there an income threshold under Alabama non compete law?
No. Alabama has no earnings threshold; enforcement turns on whether the agreement is reasonable.
What does an Alabama court do with an overbroad non compete?
Reform — a court may void an overbroad restraint in part and reform it to preserve the protectable interest (8-1-193); the party challenging the covenant now carries the burden on undue hardship.
Can my employer enforce a non compete in Alabama after firing me?
The Alabama statute does not treat a worker who was fired or laid off differently from a worker who quit. A court may still weigh how the job ended when it decides whether enforcement is fair or would cause undue hardship, so the circumstances of a layoff can matter.
I signed a non compete in Alabama and have a new offer — what should I do?
Read the agreement carefully for the exact time limit, the geographic area, the activities it restricts and what triggers it, and get a copy if you no longer have one.
Official Alabama Sources & Resources
- Alabama Department of Labor: https://www.labor.alabama.gov/
- Alabama non compete statute (Ala. Code 8-1-190 to 8-1-197): https://alison.legislature.state.al.us/code-of-alabama?section=8-1-190
- Verified source: https://law.justia.com/codes/alabama/title-8/chapter-1/article-10/section-8-1-190
- Verified source: https://alison.legislature.state.al.us/files/pdf/SearchableInstruments/2015RS/PrintFiles/HB352-Eng.pdf
- U.S. Department of Labor, Wage and Hour Division — state payday requirements: dol.gov
- Federal Trade Commission — the non compete rule (status): ftc.gov
- Alabama bar lawyer referral: https://www.alabar.org/programs/lawyer-referral-service/
This Alabama non compete law guide was last verified against official Alabama sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.
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Disclaimer: This guide is general information, not legal or financial advice. My Unemployment Rights is an independent educational resource, not a government agency and not a law firm. Final-paycheck deadlines, penalties and non compete rules change — every figure here carries the date we verified it. Confirm the current rule with your state labor department or a licensed attorney before you act.