Bradley attorneys have partnered with Lexology to draft the Getting the Deal Through Employment chapter for Alabama.

This guide covers a state snapshot, the employment relationship, hiring, wage and hour, discrimination, harassment and family leave, privacy in the workplace, trade secrets and restrictive covenants, labor relations and discipline and termination. With a premium Lexology account uses can use the interactive tool to create a cross border comparative report.

The comprehensive list of Lexology’s Employment Guides is available on Lexology’s website.
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State Snapshot

Key Considerations

1. Which issues would you most highlight to someone new to
your state?

In general, Alabama is an employer-friendly state and the default is that employment is at will. It is a right-to-work state and unions have not been able to gain much ground outside the coal mining and steel industries and the Mobile area. Restrictive covenants are generally enforceable (as governed by statute). Workers' compensation is handled in litigation, rather than in an administrative process. Alabama has no state equal employment opportunity agency and no state equal employment opportunity laws, apart from the following:

• an age discrimination in employment act that follows the federal Age Discrimination in Employment Act; and
• an equal pay statute that prohibits employers from paying any
  worker at a wage rate less than that paid to employees of another
  race or sex for equal work (largely tracking the federal Equal Pay
  Act) and provides that employers may not refuse to interview, hire,
  promote, or employ an applicant and may not otherwise retaliate
  against an applicant for refusing to provide wage history information
  during the application or interview process.

2. What do you consider unique to those doing business in your
state?

Restrictive covenants are governed by statute (Ala. Code 8-1-190, and following), and the courts regularly enforce reasonable restrictions—both non-compete and non-solicitation. There is a statute prohibiting retaliation for filing a workers' compensation claim. For employers with commissioned sales representatives, a statute governing the payment of commissions provides for treble damages and attorneys' fees. The plaintiffs' employment bar in Alabama is generally experienced and creative.

3. Is there any general advice you would give in the labor/
employment area?

In state courts it is difficult to obtain summary judgment in most jurisdictions. State judges are elected, and local knowledge is typically helpful.

Emerging Issues

4. What are the emerging trends in employment law in your
state, including the interplay with other areas of law, such as
firearms legislation, legalization of marijuana and privacy?

None that are likely to get much traction.

Proposals for Reform

5. Are there any noteworthy proposals for reform in your state?

Alabama has a statute permitting employees to keep firearms in their cars on company property, under certain conditions. Specifically, an employee with a proper permit can store a weapon in a locked vehicle, and employers may not retaliate against employees who do so. With regards to privacy, Alabama follows the federal wiretapping statute—which stipulates that you only need the consent of one party to a conversation to record it. Alabama has an immigration statute, only some of which survived judicial scrutiny.

Employment Relationship

State-specific Laws

6. What state-specific laws govern the employment
relationship?

Age discrimination in employment is prohibited (under Ala. Code 25-1- 20, and following). The statute follows the federal Age Discrimination in Employment Act coverage (an employer must have 20 or more employees, and it protects persons aged 40 and older).

The Workers' Compensation Act (Ala. Code 25-5-1 and following) applies to anyone who employs a person to perform a service for hire and pays wages directly to that person. Employers must maintain insurance but can be self-insured. Claims can only be settled with court approval.

Full-time employees serving on juries have job protection (under Ala. Code 12-16-8, 8.1). Employers must pay those full-time employees their regular wages during jury service.

The Alabama Restrictive Covenants Act (Ala. Code 8-1-190 and following) regulates non-competes and non-solicitation agreements.

Alabama has a statute which provides that all commissions due at the time of termination of a contract between a sales representative and a principal must be paid within 30 days from the termination. Any commissions that become due after the termination date must be paid within 30 days from becoming due. Failure to pay as required makes the principal liable for three times the damages, plus reasonable attorneys' fees and court costs (Ala. Code 8-24-1, 2, and 3).

The City of Birmingham passed a non-discrimination ordinance prohibiting discrimination based on “real or perceived race, color, religion, national origin, sex, sexual orientation, gender identity, disability, or family status.” This ordinance applies to any person employing one or more employees in the City of Birmingham. This is a criminal ordinance and the municipal court can levy fines for violations which cannot exceed $500. The mayor signed the ordinance but has yet to appoint the Human Rights Commission that is to receive complaints.

The Clarke-Figures Equal Pay Act (CFEPA) prohibits employers from paying any worker at a wage rate less than that paid to employees of another race or sex for equal work where the jobs require equal skill, effort, education, experience, and responsibility under similar working conditions. There is an exception for payments made pursuant to a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a differential based on any factor other than race or sex. The CFEPA also provides that employers may not refuse to interview, hire, promote, or employ an applicant and may not otherwise retaliate against an applicant for refusing to provide wage history information during the application or interview process. A successful plaintiff can recover an amount equal to the wages that were lost because of the violation—plus interest—and must file a lawsuit
within two years of the alleged discrimination.

7. Who do these cover, including categories of workers?

Age discrimination in employment is prohibited (under Ala. Code 25-1-20, and following). The statute follows the federal Age Discrimination in Employment Act coverage (an employer must have 20 or more employees, and it protects persons aged 40 and older).

The Workers' Compensation Act (Ala. Code 25-5-1 and following) applies to anyone who employs a person to perform a service for hire and pays wages directly to that person. Employers must maintain insurance but can be self-insured. Claims can only be settled with court approval.

Full-time employees serving on juries have job protection (under Ala. Code 12-16-8, 8.1). Employers must pay those full-time employees their regular wages during jury service.

The Alabama Restrictive Covenants Act (Ala. Code 8-1-190 and following) regulates non-competes and non-solicitation agreements.

Alabama has a statute which provides that all commissions due at the time of termination of a contract between a sales representative and a principal must be paid within 30 days from the termination. Any commissions that become due after the termination date must be paid within 30 days from becoming due. Failure to pay as required makes the principal liable for three times the damages, plus reasonable attorneys' fees and court costs (Ala. Code 8-24-1, 2, and 3).

The City of Birmingham passed a non-discrimination ordinance prohibiting discrimination based on “real or perceived race, color, religion, national origin, sex, sexual orientation, gender identity, disability, or family status.” This ordinance applies to any person employing one or more employees in the City of Birmingham. This is a criminal ordinance and the municipal court can levy fines for violations which cannot exceed $500. The mayor signed the ordinance but has yet to appoint the Human Rights Commission that is to receive complaints.

The Clarke-Figures Equal Pay Act (CFEPA) prohibits employers from paying any worker at a wage rate less than that paid to employees of another race or sex for equal work where the jobs require equal skill, effort, education, experience, and responsibility under similar working conditions. There is an exception for payments made pursuant to a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a differential based on any factor other than race or sex. The CFEPA also provides that employers may not refuse to interview, hire, promote, or employ an applicant and may not otherwise retaliate against an applicant for refusing to provide wage history information during the application or interview process. A successful plaintiff can recover an amount equal to the wages that were lost because of the violation—plus interest—and must file a lawsuit
within two years of the alleged discrimination.

Misclassification

8. Are there state-specific rules regarding employee/contractor misclassification?

No.

Contracts

9. Must an employment contract be in writing?

No, oral contracts are enforceable (subject to the statute of frauds).

10. Are any terms implied into employment contracts?

No, but in the absence of a specific term, employment is assumed to be at will.

11. Are mandatory arbitration agreements enforceable?

Yes.

12. How can employers make changes to existing employment
agreements?

Courts can enforce the terms of a written agreement and amendment provisions. As a general matter, continued employment is sufficient consideration for an alteration to a term of employment. In the absence of a written agreement, employees are employed at will. Employers should consider new or additional considerations to bolster the enforcement
of significant changes to employment terms.

Republished with permission. The full version of the "Lexology Employment Guide: Alabama" was published by Lexology in November 2020.