HB206 Summary: Alabama Non-Disparagement Obligations Act

• Creates the Alabama Non-Disparagement Obligations Act to establish enforceable non-disparagement obligations in contracts between parties.

• Non-disparagement contracts are only enforceable through civil action when they contain explicit language, an objectively injurious statement is made, and the statement results in specific loss to the plaintiff.

• Requires non-disparagement contracts to be in writing, signed by all parties, supported by adequate consideration, and include notice that parties cannot be held liable for disclosures made to law enforcement, regulators, grand juries, courts, attorneys, or in discovery with protective orders.

• Courts may void contracts that are overly broad, unconscionable, or unduly lacking in mutuality, and may award injunctive relief, actual damages, and attorneys' fees upon finding a breach.

• Allows defendants to mitigate damages by proving statements were made in good faith or by mistake, or were retracted in a way that eliminated or reduced harm; effective on the first day of the third month following passage and approval.