To be enforceable, any contract or agreement "executed under this Act is reduced to the letter, signed by all parties and supported by an appropriate consideration." According to current jurisprudence, Alabama has recognized the maintenance of employment in an "appropriate consideration" and I do not think the new law changes it. The new law includes "protective interests" that can be asserted in competition disputes. Professional skills as such are not considered protected by a non-competition agreement. Legitimate interests are taken into account: in particular, the new law provides, on an interim basis, reasonable periods of time for non-competition bans and non-invitations. One year is considered appropriate for agreements that prevent a company`s goodwill seller from competing or recruiting the buyer`s customers. Two years are considered appropriate for non-competition bans. Finally, it is considered that 18 months are appropriate for non-invitation agreements. "Business unit" replaces "employer." The new law applies to non-competition agreements made by commercial bodies (instead of "employers," as provided for in the previous statute). This enlargement raises the question of whether restrictive alliances can be used by non-profit, religious and charitable organizations and whether they can be applied to independent contractors. The new law also applies specifically to franchises and finds that a protective interest implies the goodwill of customers, suppliers and customers in the context of an ongoing franchise. This provision allows franchises to enter into restrictive agreements to protect those interests and likely subjects these agreements to the deadlines set by the new legislation. Agreements prohibiting the recruitment of staff are very limited.
Although the new law is not clear in this regard, it provides for agreements preventing the recruitment of employees of a company. These non-invitation agreements were previously considered to be partial restrictions on trade that did not fall under the provisions of p. 8-1-1. The new law appears to authorize such agreements, while limiting their application, to prevent an outgoing employee from being called to a current employee who "holds a unique position for the management, organization or department of the company." The new legislation does not define this provision and will leave it to the courts to interpret and enforce it. The law provides for the following remedies for violation of an agreement: effective January 1, 2016, Alabama passed a new competition ban and non-injunction law, which repeals section 8-1-1 of the Alabama Code ("New Act"). The new law begins with the same general statement as the previous law, which stipulates that any contract excluding anyone from the exercise of a legitimate profession, trade or business is unskilled, unless the new law allows it. It also states that the provisions of the New Act express a fundamental public policy of the State of Alabama and that all opposing foreign laws would not apply if they violated the new law, thus prohibiting the parties from attempting to circumvent the new law by choosing to apply the law of another state. Training pointer. The new law codifies many court decisions that have been made over the years and have interpreted Alabama`s law without competition. This gives employers some certainty in the development of non-competition agreements. Given the changes that will come into effect on January 1, 2016, it is time for employers who have non-compete agreements or are considering the application of a non-compete clause to verify what is currently being used or contemplated to ensure compliance with the new law.
This is particularly important given the "probable" durations set in different scenarios from 12 months to 2 years.