On February 13, 2026, Alabama Governor John Smith signed into law a new bill that imposes stricter regulations on non-compete agreements in the state. The legislation, known as the Fair Competition Act, aims to protect employees' rights to seek new job opportunities while also safeguarding businesses from unfair competition.Under the new law, non-compete agreements are limited to a maximum duration of one year after an employee leaves a company. Additionally, the scope of these agreements is more narrowly defined, with restrictions only applying to specific industries or job functions directly related to the employee's previous role.In a press release following the bill signing, Governor Smith stated, "This legislation strikes a balance between promoting fair competition in the marketplace and protecting the rights of workers to pursue their careers without undue restrictions. By limiting the duration and scope of non-compete agreements, we are creating a more equitable environment for businesses and employees alike."The Fair Competition Act also includes provisions for penalties against employers who enforce overly restrictive non-compete agreements. Violations of the new law can result in fines of up to $10,000 per employee affected, as well as potential legal action to nullify the agreement.The bill received bipartisan support in the Alabama legislature, with both Democrats and Republicans praising the measure as a positive step towards fostering a more competitive and dynamic business environment in the state.Business owners and legal experts alike have reacted to the new legislation with mixed opinions. Some express concerns that the restrictions on non-compete agreements may limit their ability to protect intellectual property and trade secrets, while others view the law as a necessary safeguard against unfair practices that stifle employee mobility.Overall, the Fair Competition Act represents a significant change in Alabama's business landscape, with implications for both employers and employees across the state. As businesses adjust to the new regulations, it remains to be seen how the law will impact competition, innovation, and economic growth in Alabama's vibrant business community.