DeVoe v. Cheatham
413 So.2d 1141, 1982 Ala. LEXIS 3121 (1982)
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Rule of Law:
A non-compete agreement is unenforceable if the employer lacks a protectable interest, which does not exist when an employee has only learned a general labor skill without gaining access to confidential information, trade secrets, or special customer relationships.
Facts:
- On April 30, 1979, Richard DeVoe, who had little prior experience, entered into an employment contract with Pop's Vinyl Tops.
- The contract included a covenant restricting DeVoe from competing in the vinyl roof business for five years within a 50-mile radius of Decatur, Alabama, upon termination.
- Mr. Cheatham, the owner of Pop's Vinyl Tops, trained DeVoe in the skill of installing vinyl automobile roofs, and DeVoe became proficient.
- DeVoe's employment was terminated once by Cheatham and he was later rehired.
- DeVoe voluntarily terminated his employment in November 1980.
- After leaving Pop's Vinyl Tops, DeVoe became employed by a competing vinyl top shop.
- During his employment, DeVoe learned only the normal skills of the trade and did not have access to any confidential information, trade secrets, or customer lists, nor did he develop special relationships with clients.
Procedural Posture:
- Cheatham and Pop's Vinyl Tops filed an action in an Alabama trial court to enjoin Richard DeVoe from competing with them.
- The trial court granted a preliminary injunction against DeVoe.
- On March 10, 1981, the trial court entered a permanent injunction against DeVoe for a period of five years.
- DeVoe appealed the trial court's order granting the permanent injunction to the reviewing appellate court.
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Issue:
Does an employer have a legally protectable interest sufficient to enforce a non-compete agreement when the employee's training consisted only of learning a general labor skill, without access to confidential information or unique customer relationships?
Opinions:
Majority - Unattributed
No. An employer does not have a legally protectable interest sufficient to enforce a non-compete agreement when an employee has only learned a general labor skill. Alabama law disfavors contracts in restraint of trade. For a non-compete agreement to be enforceable, the employer must possess 'a substantial right in its business sufficiently unique to warrant the type of protection contemplated.' Such protectable interests typically include confidential information, trade secrets, and unique customer relationships. A simple labor skill, even one taught by the employer, does not constitute a protectable interest. Enforcing such a restriction would place an undue burden on the employee and prevent them from earning a livelihood, which contravenes public policy.
Analysis:
This decision clarifies the 'protectable interest' requirement for the enforcement of non-compete agreements under Alabama law. It establishes a critical distinction between general skills acquired through on-the-job training, which are not protectable, and proprietary assets like trade secrets or customer goodwill, which are. The ruling strengthens employee mobility, particularly for laborers and skilled tradespeople, by affirming their right to use learned skills in future employment. This precedent signals that courts will scrutinize non-competes closely and refuse to enforce them when they serve merely to prevent ordinary competition rather than to protect unique business assets.
