Non-Compete agreements are often contained in employment contracts and in contracts for the sale of businesses. Courts construe this type of agreement very narrowly. In other words, there are only certain circumstances when courts are willing to enforce non-compete agreements. The following is an actual case from our files that went all the way to the Alabama Supreme Court.
Our client had purchased a manufacturing facility that was in competition with the seller’s factory. The purchase agreement contained a provision prohibiting the purchaser from hiring any of the seller’s employees without the seller’s permission. After our client hired two of the Seller’s employees, the Seller filed suit. We successfully defended the Purchaser in a case that went to the Alabama Supreme Court. Read the full text of Defco, Inc. v. Decatur Cylinder, Inc. decision.