SB270 Summary

• Voids any contract that restrains a person from exercising a lawful profession, trade, or business unless it falls within specific permitted categories.

• Allows restrictive covenants in five circumstances: agreements between businesses limiting hiring of key personnel; agreements to limit commercial dealings; seller covenants protecting goodwill; employee agreements protecting customer relationships; and partnership dissolution agreements.

• Presumes restrictive covenants of one year or less are reasonable, and allows courts to refuse enforcement if it causes undue hardship.

• Requires restrictive covenants to be in writing, signed by all parties, supported by adequate consideration, and mutual in all significant provisions.

• Repeals Section 8-1-1 of the Code of Alabama 1975 and becomes effective January 1, 2015.