Bernard Frechtman: Timely Topics: Alabama Rewrites Its Noncompete Statute
A. Bernard Frechtman, Esq., C.P.C. - July 24, 2017
Note: This article is not intended as legal advice. In all instances the reader is cautioned to consult with legal counsel when utilizing this information. ABF*
Alabama Rewrites Its Noncompete Statute
Alabama passed a comprehensive revision of the state’s Noncompete statute that will become effective January 1, 2016. The new statute like its predecessor “provides that every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than as provided in the statute is to that extent void.”
The statute spells out the exceptions, where the contractual limitations on the practice of a livelihood are permitted. These include agreements by employees with their employers: not to compete for a specified period following the conclusion of their employment; post-employment restrictions on solicitation of the employer’s customers; agreements not to compete in connection with the sale of the goodwill of a commercial entity; agreements (under certain circumstances) between businesses that limit their ability to hire the employees of one another; agreements not to compete in anticipation of or as a part of the dissolution of a commercial entity; and agreements in which persons or businesses agree to limit commercial dealings to one another. All of these types of agreements have been found enforceable in appropriate circumstances under Alabama case law.
Consistent with current practice, the statute retains the principle of “blue penciling,” meaning that courts will continue to have the ability to enforce only the reasonable aspects or limitations of an agreement that would otherwise be overly broad or unduly long.
Supreme Court’s Same Sex Marriage Ruling: What Does It Mean For Employers?
It simplifies the meaning of the word “spouse.” Employers with employees in more than one state faced a patchwork of state and federal laws as to whether a same-sex spouse was a legal spouse, and if so, the legal ramifications in each state. The inconsistency in state law also muddled Family and Medical Leave Act (FMLA) issues. The FMLA entitles eligible employees to take unpaid leave to “care for a spouse, son, daughter, or parent who has a serious health condition,” For the FMLA the United States Department of Labor previously defined spouse as “a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including “common law” marriage and same-sex marriage.” Now, no matter the state, a spouse is a spouse.
“References are what employers expect to get and are reluctant to give”