SB270 Alabama 2014 Session

Summary

Primary Sponsor

Phillip W. Williams

Republican

Session

Regular Session 2014

Title

Contracts, use of restrictive covenants clarified, Sec. 8-1-1 repealed

Summary

SB270 clarifies how restrictive covenants can be used and enforced in Alabama contracts and repeals the old Section 8-1-1.

What This Bill Does

It specifies which restraints are allowed to protect a business's interests, such as limits on hiring key staff, non-solicitation after a sale of goodwill, and geographic-area restraints for employees or agents within reasonable timeframes. It defines what counts as a protectable interest (like trade secrets, confidential information, and customer relationships) and states that general job skills are not protectable. It requires written, signed agreements with adequate consideration and mutual terms, lets courts void overly broad restraints, and provides remedies for breaches, including injunctive relief and damages.

Who It Affects

• Employers and businesses that use restrictive covenants, who would be able to enforce restraints to protect trade secrets, customer relationships, and goodwill, but must follow defined limits and show the restraints are reasonable.
• Employees, agents, buyers/sellers, and partners who enter into contracts containing restraints, as their activities may be restricted during employment, after a sale of goodwill, or in dissolution scenarios under specified conditions.

Key Provisions

• Repeals Section 8-1-1 and restates the law on restrictive covenants.
• Allows certain restraints to preserve a protectable interest: restrict hiring of a party's agents/employees; limit commercial dealings to specific parties; post-sale goodwill restraints within a geographic area with reasonable time/place limits; employee/agent restraints with reasonable time/place restraints; and dissolution-related restraints.
• Defines protectable interests to include trade secrets, confidential information, substantial relationships with customers/vendors/clients, and goodwill, but excludes mere job skills.
• Requires restraint agreements to be in writing, signed, supported by adequate consideration, and mutual in significant provisions.
• Gives courts authority to void overly broad restraints in whole or in part.
• Outlines remedies for breach: injunctive relief, actual or liquidated damages, and contract-law remedies (including attorneys’ fees if provided).
• Preserves professional exemptions recognized by Alabama law.
• States the act governs over conflicting foreign laws that violate its public policy.
• Repeals the old 8-1-1 statute as part of the act.
• Effective date: January 1, 2015.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Contracts