Employment Contract Review in Alabama

Most employment agreements are signed quickly, often on a deadline, and usually without anyone reading the parts that matter most. The terms that cause trouble later are rarely the ones people focus on when they sign.

Employment contracts, offer letters, independent contractor agreements, and severance agreements can all be reviewed for enforceability under Alabama law, provision by provision.

What do the restrictive covenants do?

Alabama starts from an unusual position. Under Alabama Code Section 8-1-190(a), every contract by which anyone is restrained from exercising a lawful profession, trade, or business is void to that extent, unless it fits one of six exceptions in the statute. Subsection (b) allows those exceptions only to preserve a protectable interest.

The two that come up most in employment agreements:

• Non-compete, (b)(4). An employee of a commercial entity may agree not to engage in a similar business in a specified geographic area, subject to reasonable restraints of time and place. Restraints of two years or less are presumed reasonable.
• Non-solicitation of current customers, (b)(5). An employee may agree not to solicit current customers, subject to reasonable time restraints. Restraints of 18 months, or as long as post-separation consideration is paid, whichever is greater, are presumed reasonable.

Presumed reasonable is not a cap. A longer restraint is not automatically void, but it loses the presumption and has to be justified. Full detail in the guide to non-compete enforceability in Alabama.

If you are a contractor rather than an employee

That wording is why non-competes against true independent contractors are frequently unenforceable in Alabama. The caveat is that the label in the agreement does not settle it. Whether someone is genuinely an independent contractor depends on how the working relationship operates, not on what the contract calls it.

If you are a licensed professional

Section 8-1-190(a) voids restraints on a lawful profession, and Alabama courts have held non-competes generally unenforceable against professionals, applying that to physicians, veterinarians, accountants, and licensed physical therapists among others. If that describes you, see physician contract review or dental and veterinary contract review.

What do reviews commonly turn up?

• Missing termination provisions, leaving no clear exit
• Automatic renewal clauses that extend the agreement unless you cancel inside a narrow window
• Intellectual property assignment that transfers ownership of work you did not expect to give up
• Mandatory arbitration or venue requirements that make disputes harder to resolve
• One-sided liability provisions
• Compensation described in a way that leaves the employer room to change it
• Restrictive covenants drafted far broader than any protectable interest would support

Should a severance agreement be reviewed?

A severance agreement is a contract, and signing it usually means giving something up in exchange for the payment. It can also carry federal requirements an ordinary commercial contract does not, which is another reason to read it before the deadline the employer has set. Worth understanding before you sign: what exactly you are releasing, whether any restrictive covenant is being extended or newly imposed, how the payment is structured and taxed, what happens to unvested compensation, and whether any non-disparagement or confidentiality obligation attaches.

The time to read it is before the deadline the employer has set, not after.

Already signed?

Review still helps. A review of an existing agreement sets out your rights and obligations, what the contract says about termination and renewal, the notice requirements you have to follow, and your options before you take a step that affects them.

Is review worth it if they will not negotiate?

Yes, and this comes up constantly. Even with a genuine take-it-or-leave-it agreement, review buys you something negotiation cannot: you walk in knowing exactly how you can be terminated, what the non-compete restricts, what happens to a bonus, and what the contract conveniently leaves out. If a term is not written down, the other side does not have to honor it.

What review costs

An offer letter and a forty page executive agreement are not the same job, so the cost is not the same either. Length, stakes, whether negotiation is wanted, and turnaround decide it, and the figure comes before the work. What drives contract review cost.

Frequently Asked Questions

Should I have an employment contract reviewed before signing in Alabama?

Before signing is when your leverage is highest and when changes are cheapest to make. Review establishes what the agreement commits you to, including how you can be terminated, what any restrictive covenant restricts, and what the document leaves out. Terms that are not written down are not obligations the other side has to honor.

Are non-compete clauses in Alabama employment contracts enforceable?

Sometimes, but the default is the opposite of what most people assume. Alabama Code Section 8-1-190(a) voids contracts restraining a lawful profession, trade, or business unless they fit one of six statutory exceptions, and those exceptions are allowed only to preserve a protectable interest. Whether a particular clause qualifies is fact-specific.

How long can an employment non-compete last in Alabama?

The statute sets presumptions rather than caps. Under Section 8-1-190(b)(4), restraints of two years or less are presumed reasonable for an employee non-compete. A longer restraint is not automatically void, but it loses the presumption and has to be defended.

Can a non-compete be enforced against an independent contractor in Alabama?

Often not, though it is not automatic. The exceptions in Section 8-1-190(b)(4) and (b)(5) are written to cover an agent, servant, or employee of a commercial entity, and a genuine independent contractor is usually not an employee or a servant. Note that the list also includes agent, and a contractor may be acting as one depending on the arrangement. Whether a worker is genuinely an independent contractor depends on how the relationship operates rather than on the label used in the agreement.

What should I look for in an offer letter?

Whether it is an offer letter or an employment contract in substance, since the two carry different weight. Then: how compensation is defined and whether the employer can change it, what the notice and termination terms are, whether any restrictive covenant is attached or incorporated by reference, whether the start date is conditional, and what has been discussed verbally but not written down.

Should I have a severance agreement reviewed before signing?

Yes. A severance agreement is a contract, and signing it usually means releasing something in exchange for the payment. Worth understanding first: what exactly you are releasing, whether a restrictive covenant is being extended or newly imposed, how the payment is structured, what happens to unvested compensation, and what confidentiality or non-disparagement terms attach.

Is contract review worth it if the employer will not negotiate?

Yes. Even with a genuine take-it-or-leave-it agreement, review tells you how you can be terminated, what the restrictive covenant restricts, what happens to your bonus or deposit, and what the contract leaves out. Knowing that before you sign is the point, whether or not a word of it changes.

What is the difference between a non-compete and a non-solicitation agreement?

A non-compete restricts you from working in a similar business in a defined area. A non-solicitation restricts you from approaching customers. Alabama treats them under separate exceptions with different time presumptions, and they can survive or fail independently of each other.

Can I have my employment contract reviewed after I have already signed it?

Yes, and it is still worth doing. A review of an existing agreement sets out your rights and obligations, what the contract says about termination and renewal, the notice requirements you have to follow, and your options before you take a step that affects them.

Do you review employment agreements for employers as well as employees?

Yes. We review, draft, and negotiate employment contracts, independent contractor agreements, offer letters, and severance agreements. For an employer, the questions run the other way: whether a restrictive covenant is drafted narrowly enough to survive Section 8-1-190, and whether the agreement actually protects the interest it is meant to.

How much does employment contract review cost in Alabama?

It depends, and we will tell you what it depends on rather than hiding the ball. Four things drive the number: the length of the document, what is at stake if it goes wrong, whether you want negotiation or just understanding, and how fast you need it. We explain the expected scope and cost at the consultation, before any work begins.

This article is general information about Alabama law, not legal advice about your agreement. Employment contract questions are fact-specific, and the outcome depends on your role, your contract, and your working relationship.