Source: https://www.faircompetitionlaw.com/2016/02/25/noncompete-law-developments-alabama/
Timestamp: 2019-07-23 13:12:50
Document Index: 312114280

Matched Legal Cases: ['§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8']

Noncompete Law Developments: Alabama – Fair Competition Law
Alabama: (c) Tubs; photo available here
Alabama‘s new so-called “Restrictive Covenant Act,” Ala. Code §§ 8-1-190-197, reproduced below, can be a bit hard to find. (Hat tip to the law firm of Sirote & Permutt, which has a nice summary of the new law here – and which is the only place where one can easily find the (correct) reference to Alabama’s new noncompete law.)
The new law carries over much of Alabama’s existing noncompete (and nonsolicit) law, but, most significantly, (1) establishes a presumption that a two-year noncompete is reasonable in duration and (2) requires mandatory judicial reformation (i.e., modification or rewriting) of overbroad noncompetes. (States take one of three general approaches to overly-broad noncompetes: reformation (in which the court essentially rewrites the language to conform the law to a permissible scope); blue pencil (in which the court simply crosses out the offending language, leaving the remaining language enforceable or not); and red pencil (also referred to as the “all or nothing” approach, as its name implies, requires a court to void any restriction that is overly broad, leaving nothing to enforce.)
What follows is the new statute:
§ 8-1-190. Void contracts; contracts allowed to preserve protectable interests.
§ 8-1-191. Protectable interests.
§ 8-1-192. Requirements for validity.
In order to be valid, any contract or agreement executed pursuant to this article shall be reduced to writing, signed by all parties, and be supported by adequate consideration.
§ 8-1-193. Voidable restraints.
If a contractually specified restraint is overly broad or unreasonable in its duration, a court may void the restraint in part and reform it to preserve the protectable interest or interests. If a contractually specified restraint does not fall within the limited exceptions set out in subsection (b) of Section 8-1-190, a court may void the restraint in its entirety.
§ 8-1-194. Burden of proof.
The party seeking enforcement of the covenant has the burden of proof on every element. The party resisting enforcement of the covenant has the burden of proving the existence of undue hardship, if raised as a defense.
§ 8-1-195. Remedies and defenses.
(a) The remedies available for breach of an agreement subject to this article are:
(1) Such injunctive and other equitable relief as may be appropriate with respect to any actual or threatened breach.
(2) The actual damages suffered as a result of the breach or lawful liquidated damages if provided in the contract.
(3) Any remedies available in contract law, including attorneys’ fees or costs, if provided for in the contract or otherwise provided for by law.
(b) Nothing in this article shall limit the availability of any defense otherwise available in law or equity.
§ 8-1-196. Professional exemptions.
Nothing in this article shall be construed to eliminate any professional exemption recognized by Alabama law.
§ 8-1-197. Legislative intent; application.
It is hereby declared that this article expresses fundamental public policies of the State of Alabama. Therefore, this article shall govern and shall be applied instead of any foreign laws that might otherwise be applicable in those instances when the application of those foreign laws would violate a fundamental public policy expressed in this article.
(Note that the statute is reproduced from Westlaw, which has the full statute, together with notes, currentness, and other research services.)