Are Non-Competes Enforceable in Tennessee? Your Rights Explained

In Tennessee, non-compete agreements are enforceable against higher-paid employees when a court finds them reasonable — but as of July 1, 2026, they are void against most lower- and middle-income workers. Tennessee's new noncompete statute, Public Chapter 934 (2026), creates Tenn. Code Ann. § 50-1-211, which says an employer "shall not require, request, or enforce a noncompete agreement against an employee whose annualized compensation is less than seventy thousand dollars ($70,000)." A noncompete signed in violation of that rule is "void and unenforceable as a matter of public policy." The same act creates § 50-1-210, which sets rebuttable time limits on restrictive covenants. Above the $70,000 line, Tennessee's long-standing common-law reasonableness test — rooted in the Tennessee Supreme Court's decision in Hasty v. Rent-A-Driver, Inc. — still governs. Healthcare providers remain covered by a separate statute, discussed below.

The $70,000 Rule: Who Is Now Free of a Non-Compete

This is the most important change in Tennessee non-compete law in decades, and it is the first thing a worker should check. Under Tenn. Code Ann. § 50-1-211, if your annualized compensation is under $70,000, your employer may not require you to sign a noncompete, may not ask you to sign one, and may not enforce one against you. The statute opens with the words "Notwithstanding a law to the contrary," which means it overrides the common-law reasonableness test where the two conflict. It is not a factor for a judge to weigh — it is a bar.

• What counts as compensation. "Annualized compensation" means your total compensation from the employer — wages, salary, commissions, nondiscretionary bonuses, and other forms of remuneration — calculated on an annualized basis.
• If you are paid hourly, the statute gives you the exact formula: your hourly rate × 40 × 52. So an hourly employee earning less than roughly $33.65 an hour falls under the $70,000 threshold, and a noncompete against that worker is void.
• "Void and unenforceable" is the statute's own language (§ 50-1-211(c)). A covered worker does not have to prove hardship, and the employer does not get to argue the restriction was narrow and therefore reasonable.

Do not assume you are excluded because you signed before July 1, 2026. The act "takes effect July 1, 2026 ... and applies to proceedings occurring and agreements entering into, renewed, or amended, on or after that date." Two things follow. Agreements you sign, renew, or amend on or after July 1, 2026 are squarely covered. And because § 50-1-211 also forbids an employer from enforcing a noncompete against a sub-$70,000 employee, and because the act applies to proceedings occurring on or after July 1, 2026, a worker under the threshold who is sued or threatened now has a serious statutory argument even on an older contract. Tennessee courts have not yet ruled on how far that reaches. The practical point: if you earn under $70,000, do not assume you are trapped by an old agreement — raise the statute.

One important limit. Section 50-1-210(c) preserves three things the $70,000 rule does not wipe out: confidentiality and nondisclosure agreements, client-or-customer non-solicitation agreements, and employee non-solicitation agreements. Being free of a noncompete does not mean you may take confidential information, poach your old employer's customers, or recruit its staff. Read your full agreement, not just the noncompete clause.

How Long Can a Non-Compete Last? Statutory Presumptions Now Apply

Tennessee used to leave duration entirely to case-by-case reasonableness. Tenn. Code Ann. § 50-1-210 now instructs that "a court shall presume that a time restraint greater than" the applicable period below "is unreasonable":

• Two years or less — presumed reasonable against a former employee or independent contractor (where the covenant is not tied to the sale or ownership of a business or equity interest).
• Three years or less — presumed reasonable against a distributor, dealer, franchisee, lessee, or licensee of a trademark, trade dress, or service mark.
• The longer of five years, or the period during which payments are made to the seller — presumed reasonable against the owner or seller of a business or of shares, a partnership interest, an LLC membership interest, or another equity interest.

These are rebuttable presumptions, not hard caps. An employer can still try to justify a longer restriction, and a court can still find a shorter one unreasonable on the facts. But the burden has shifted: if you are an ordinary employee staring at a three-year noncompete, the statute now presumes it unreasonable, and the employer has to overcome that. There is still no statutory limit on geographic scope for general employees, so geography remains a pure reasonableness question — restrictions tied to where the employer actually does business and to the customers you personally served are the ones most likely to hold up.

The Reasonableness Test Still Governs Above $70,000

For employees over the threshold, the common-law framework still supplies the surrounding analysis. A restrictive covenant is enforceable only when it is supported by adequate consideration and is reasonable under the circumstances. Tennessee courts weigh:

• The consideration supporting the agreement — what the employee received in exchange for signing (a job offer, a promotion, specialized training, access to trade secrets, or other benefits).
• The threatened danger to the employer if the agreement is not enforced.
• The economic hardship the restriction imposes on the employee.
• Whether the restriction is against the public interest.

Critically, an employer cannot use a non-compete simply to keep an employee from competing. Tennessee courts require a legitimate protectable business interest — typically trade secrets, confidential business information, or customer relationships and goodwill that the employee was in a position to take advantage of. Ordinary skills and general knowledge an employee develops on the job are not, by themselves, enough to justify enforcing a non-compete.

Tennessee Courts Can "Blue-Pencil" an Overbroad Agreement

Tennessee follows a reasonable-modification (blue-pencil) approach, and the 2026 act now says so expressly: under § 50-1-210(d), "a court may modify a restrictive covenant governed by this section to render it reasonable and enforceable." If a non-compete is overly broad, a Tennessee court is not required to throw the whole thing out — it may shorten the time period or shrink the geographic area and then enforce the narrowed version. So if you are above the $70,000 threshold, signing an aggressive agreement on the assumption that "a court will never enforce something this broad" remains a risky bet. Note the difference, though: modification applies to covenants governed by § 50-1-210. A noncompete barred by the $70,000 rule in § 50-1-211 is void outright — there is nothing to narrow.

The Healthcare Provider Statute

Healthcare has its own rule, and the citation matters because the statute was rewritten years ago. Tenn. Code Ann. § 63-1-148 was deleted in its entirety and replaced in 2011 (Public Chapter 218, effective January 1, 2012). In its current form it is a short cross-reference: a restriction on an employed or contracted healthcare provider's right to practice "shall be deemed reasonable if it complies with the terms and conditions set forth in § 63-6-204(f)(2)," and § 63-1-148 "shall apply to all healthcare providers licensed under [title 63]" — not just physicians.

Two practical consequences. First, the actual duration and geographic terms live in § 63-6-204(f)(2), not in § 63-1-148 — a provider who pulls up § 63-1-148 expecting to find a two-year limit will find only the cross-reference. Read § 63-6-204(f)(2) itself for the operative terms, which are generally described as a duration limit of up to two years and a geographic restriction tied to a defined radius from the provider's primary practice site or the county of practice. Second, be careful with older summaries: the 2007 version of § 63-1-148 contained a six-year-tenure escape clause and a carve-out for emergency medicine and radiology. Both were repealed in 2011 and are not the law, though many commercial legal websites still describe that dead version.

It is also an open question whether the new $70,000 rule reaches healthcare providers. Section 50-1-211 begins "Notwithstanding a law to the contrary," which on its face would override the healthcare statute for a provider earning under $70,000; no Tennessee court has decided the point yet. A lower-paid licensed provider should not assume the healthcare statute forecloses the argument.

What About the Federal Non-Compete Ban?

The Federal Trade Commission issued a rule in 2024 that would have banned most non-competes nationwide. It was challenged in Ryan, LLC v. FTC and set aside before it ever took effect, and in September 2025 the FTC voted to dismiss its appeals and accede to the vacatur. There is no federal ban on non-competes, so Tennessee workers are governed by Tennessee law — which, since July 1, 2026, is more protective than the federal baseline for anyone under $70,000. Federal law still sets other floors: the Fair Labor Standards Act sets a federal minimum wage of $7.25 per hour (29 U.S.C. § 206(a)(1)(C)) and requires overtime after 40 hours in a workweek for non-exempt employees, but the FLSA does not address non-competes. Tennessee has no state minimum wage law of its own, so the federal rate applies to most covered employers in the state.

What to Do If You Are Asked to Sign or Are Being Threatened

Whether you are facing a new agreement or a threat to enforce an old one, a few practical steps protect you:

• Do the $70,000 math first. Add up your wages, salary, commissions, and nondiscretionary bonuses on an annualized basis; if you are hourly, multiply your rate by 40 and then by 52. If the number is under $70,000, § 50-1-211 says a noncompete against you is void — say so, in writing, before you give up a job.
• Read it before you sign. Note the duration, the geographic area, the activities restricted, and whether it also includes non-solicitation or confidentiality clauses, which remain enforceable even when the noncompete is not. You can ask to negotiate scope, carve-outs, or severance triggers before signing.
• Get a copy and keep it. Keep the signed agreement, your offer letter, anything describing what you received in exchange (training, a bonus, a promotion), and pay records that establish your compensation level.
• Above the threshold, don't assume it's unenforceable. Because Tennessee courts can modify overbroad agreements, you should not treat an aggressive non-compete as a bluff.
• Be cautious about your next move. Even a worker freed by the $70,000 rule can be sued for taking documents, files, or customer lists. Misappropriating information can expose you to separate trade-secret claims.
• Respond carefully to a cease-and-desist letter. A former employer's demand letter is not a court order, and employers do send them to workers the statute now protects. But ignoring it can lead to a lawsuit and a request for an injunction in Chancery Court. Consider a written, measured response.
• Talk to a Tennessee employment lawyer, especially if you are near the threshold, are a licensed healthcare provider, or signed before July 1, 2026.

Where to Verify and Get Help

You can read the governing law yourself. The full text of the 2026 noncompete act — both § 50-1-210 and § 50-1-211 — is published free by the Tennessee Secretary of State as Public Chapter 934, and its legislative history is on the General Assembly's official bill page for HB 1034. The 2011 rewrite of the healthcare statute is in the official bill text of HB 832 / SB 611. Non-compete disputes in Tennessee are decided by the courts (typically Chancery Court), not by a state agency: the Tennessee Department of Labor and Workforce Development does not enforce or adjudicate non-compete agreements, though it is the state's official source for wage, workplace, and labor-standards questions. This article is general information, not legal advice. Because legal standards evolve and individual contracts differ, confirm the current law with the official statute and consult a licensed Tennessee attorney before acting on a specific agreement.

Official Tennessee Sources

This page is based on Tennessee employment law. Rules and figures change — verify the current details directly with the official Tennessee sources below. This is general legal information, not legal advice.

• Tennessee Department of Labor & Workforce Development — official Tennessee agency.
• How to Begin a Wage Claim - Tennessee Labor Standards Unit

Federal law and local ordinances may also apply. Federal laws like the Fair Labor Standards Act set a national floor, and your city or county may add protections (such as a higher local minimum wage or paid sick leave). Check both alongside Tennessee state law.