Burr & Forman

05.28.2014   |   Alabama, Blog Articles, Non-Compete & Trade Secrets Law, Non-Solicitation Agreement

Is A Licensed Securities Dealer A “Professional” Under Alabama Law Prohibiting Enforcement of Nonsolicitation Agreements Against Professionals?

The Alabama Court of Civil Appeals released a slip opinion on May 16, 2014 addressing enforcement of a nonsolicitation agreement against a licensed securities broker. See G.L.S. & Associates, Inc., and G.L. Smith & Associates, Inc. v. Keith Rogers, No. 2130322 (Ala. Civ. App. May 16, 2014) (Slip Opinion). The defendant (Rogers) worked for a securities firm (GLSA) and had an employment agreement that contained a nonsolicitation provision which prohibited Rogers from soliciting GLSA’s clients for a period of two years after termination of employment. Rogers resigned from his employment in January 2013. Thereafter, GLSA filed a complaint against Rogers, attaching the employment agreement to the complaint, and arguing that Rogers had solicited GLSA’s clients in violation of the agreement.

At the trial court level, Rogers moved to dismiss the complaint under Rule 12(b)(6) for failure to state a claim, averring that he was a “professional” and therefore the nonsolicitation provisions were unenforceable under Alabama law, in particular, Section 8-1-1 of the Alabama Code and the factors for determining whether an occupation is a “profession” as set out by the Alabama Supreme Court in Friddle v. Raymond, 575 So. 2d 1038, 1039 (Ala. 1991) (factors are “professional training, skill, and experience required to perform certain services; delicate nature of the services offered; and the ability and need to make instantaneous decisions”) (citing Odess v. Taylor, 211 So. 2d 805 (Ala. 1968)). To read the rest of this article and others on securities litigation, please visit the Burr & Forman Securities Litigation & Arbitration blog.

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