HB241 Summary

• Declares void any contract restraining a person from exercising a lawful profession, trade, or business except as specifically provided in the statute.

• Permits five types of restrictive covenants to preserve protectable interests: contracts limiting hiring of key employees, exclusive dealing agreements, non-compete provisions upon sale of business goodwill, employee non-competes, and dissolution agreements among business partners or owners.

• Defines protectable interests to include trade secrets, confidential business information, substantial customer relationships, goodwill, and specialized training with substantial company expenditure, but excludes job skills alone.

• Requires all restrictive covenants be in writing, signed by all parties, supported by adequate consideration, and mutual in all significant provisions; permits courts to void overly broad or unreasonably long restraints.

• Repeals Section 8-1-1 of the Code of Alabama 1975 and becomes effective January 1, 2015; passed House 101-0 on March 5, 2014.