Allowed above a pay floor

Non-compete law in Tennessee

Public Chapter 934 (2026), effective July 1, 2026 and applying to agreements entered into, renewed or amended on or after that date and to proceedings on or after it, bars employers from requiring, requesting or enforcing a noncompete against an employee whose annualized compensation is under $70,000 (void as against public policy). For other workers it directs courts to presume reasonable a restraint of 2 years or less (3 years for distributors, dealers, franchisees, lessees and licensees; the longer of 5 years or the payment period for sellers and owners) and to presume longer restraints unreasonable, with court modification allowed. Health care providers licensed under Title 63 chapters 3, 4, 5, 6, 8, 9 and 11 (the legislature's bill summary names podiatrists, chiropractors, dentists, medical and osteopathic physicians and psychologists) keep a separate statute with a 2-year / 10-mile-or-county presumption.

Last verified · confidence medium. Clauseworthy is not a law firm and does not give legal advice.

Employee non-competes
Only within the statute's conditions
Pay floor
$70,000 a year in 2026, adjusted none (fixed in statute)
How pay is measured
Tenn. Code Ann. § 50-1-211 (as added by 2026 Pub. Ch. 934 s. 1): an employer shall not require, request or enforce a noncompete against an employee whose annualized compensation is less than $70,000; annualized compensation = total compensation from the employer incl. wages, salary, commissions, nondiscretionary bonuses and other remuneration, annualized; hourly = hourly rate x 40 x 52.
Duration
No hard cap. Courts presume reasonable in time: 2 years or less from termination for an employee or independent contractor (not tied to a sale of a business interest); 3 years or less for a distributor, dealer, franchisee, lessee or licensee; for an owner/seller of a business interest, the longer of 5 years or the period payments are made. A longer restraint is presumed unreasonable; a court may modify (§ 50-1-210).

Exceptions and special rules

  • Sale of a business: the statute allows a non-compete given by a seller.
  • Owner/seller of all or a material part of business assets, shares, partnership/LLC interests or other equity: presumption of reasonableness up to the longer of 5 years or the payment period (§ 50-1-210(b)(3)); sale-linked restraints are carved out of the 2-year employee presumption (§ 50-1-210(b)(1)(B))
  • Nothing in § 50-1-210 prohibits enforcing confidentiality/nondisclosure agreements, client or customer nonsolicitation agreements, or employee nonsolicitation agreements (§ 50-1-210(c))
  • Health care providers licensed under Title 63 chapters 3, 4, 5, 6, 8, 9 and 11 (per the legislature's bill summary: podiatrists, chiropractors, dentists, medical physicians, osteopathic physicians, psychologists); physicians specializing in emergency medicine are excluded. A post-employment restriction is deemed reasonable if in a signed writing and no more than 2 years, with either a geographic limit of the greater of a 10-mile radius from the primary practice site or the county of that site, or no geographic limit but a bar on practicing at facilities where the employer provided services during the provider's tenure. An agreement tied to the purchase/sale of a provider's practice may restrict practice if duration and area are reasonable (rebuttable presumption of reasonableness). The 2007 enactment also made the restriction non-binding after 6 years' service; that sentence does not appear in the current mirrored text. (Tenn. Code Ann. § 63-1-148 (2007 Pub. Ch. 487; current text via Justia mirror of the 2024 Code - secondary; the same 2-year / 10-mile-or-county / facility rule is described as present law in the General Assembly's official HB 1034 bill summary))

Non-solicitation clauses

Not restricted by the 2026 act: employers may still enforce client/customer and employee nonsolicitation and confidentiality/nondisclosure agreements (§ 50-1-210(c)).

Remedies

A noncompete executed in violation of the $70,000 rule is void and unenforceable as a matter of public policy (§ 50-1-211(c)); a court may modify an over-long restraint to make it reasonable (§ 50-1-210(d)). No fee-shifting or penalty in the act.

Which agreements it covers

Pub. Ch. 934 s. 3: effective July 1, 2026, 'the public welfare requiring it', and applies to proceedings occurring and agreements entered into, renewed or amended on or after that date. Earlier unrenewed agreements are not covered by the text read. 2026-07-01 (entered into, renewed or amended on or after)

Recent changes

  • 2026-07-01. 2026 Pub. Ch. 934 (HB 1034/SB 995) took effect: new Tenn. Code Ann. §§ 50-1-210 (time-reasonableness presumptions) and 50-1-211 ($70,000 floor). Passed House 74-8 (2026-04-16, as amended) and Senate 28-4 (2026-04-20); signed by the Governor 2026-05-07. Source
  • 2007. 2007 Pub. Ch. 487 enacted Tenn. Code Ann. § 63-1-148 (health care provider covenants). Source

Primary sources

Secondary sources

Commentary and trackers used only to find the primary text. None of them is the statute, and none is cited for what the statute says.

Checker

What the statute says for these facts

Four facts. The answer leads with what the statute does at that pay, then names any change already enacted, then quotes the details with their citations.

The person who would sign

Several statutes treat contractors differently.

Other states on file