Tennessee Non-Compete Laws (2026): Are Non-Competes Enforceable?

Tennessee non-competes now depend first on pay. Since July 1, 2026, T.C.A. 50-1-211, added by Public Chapter 934 (House Bill 1034), bars an employer from requiring, requesting or enforcing a non-compete against an employee whose annualized compensation is less than $70,000, and makes such an agreement void. Above that figure, a Tennessee court enforces a non-compete only if it is reasonable, the test the Tennessee Supreme Court applied in Hasty v. Rent-A-Driver, Inc. (1984).

The new law applies to agreements entered into, renewed or amended on or after July 1, 2026. For how other states handle these agreements, see our non-compete laws by state guide.

Information last verified on 2026-10-08. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Tennessee law on employee non-compete agreements: T.C.A. 50-1-210 and 50-1-211 (Public Chapter 934 of 2026), the health care provider statutes T.C.A. 63-1-148 and 63-6-204(f), and the Tennessee Supreme Court decisions applying the common-law reasonableness test, with a short note on the federal FTC rule. It does not cover trade-secret claims (see Tennessee trade secret laws) or severance pay (see Tennessee severance pay laws).

Are non-competes enforceable in Tennessee?

It depends on three things: what you earn, what you do, and when the agreement was signed. Tennessee had no general non-compete statute until July 1, 2026. Public Chapter 934 added two sections to Title 50 of the Tennessee Code, and the older court-made rules still fill in everything the new sections do not address.

The $70,000 rule (T.C.A. 50-1-211)

The core of the 2026 law is one sentence:

"Notwithstanding a law to the contrary, 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)." T.C.A. 50-1-211, as enacted by Public Chapter 934 (2026)

The ban reaches further than enforcement. An employer covered by it may not even ask a lower-paid employee to sign a non-compete. A non-compete signed in violation of the section "is void and unenforceable as a matter of public policy."

What counts as compensation. "Annualized compensation" is the total an employee earns from the employer, "including wages, salary, commissions, nondiscretionary bonuses, and other forms of remuneration, calculated on an annualized basis." For an hourly employee, the act sets the math: the hourly rate times 40, times 52.

The figure does not adjust on its own. The act text sets $70,000 and contains no indexing or inflation language. A change would take a new act of the General Assembly.

What the act leaves open. The act does not define "noncompete agreement," and we found no court decision construing the new section yet. It also sets no civil penalty, no attorney-fee award and no private lawsuit for a violation, and it names no state agency to enforce it. What it does provide is the result: a covered agreement is void.

Which agreements the new law covers

Public Chapter 934 took effect July 1, 2026. Its effective-date clause says it "applies to proceedings occurring and agreements entering into, renewed, or amended, on or after that date."

So a non-compete signed, renewed or amended on or after July 1, 2026 is governed by the new sections. One signed earlier and never renewed or amended stays under the prior common-law rules described below. The "proceedings occurring" wording could be read to reach court cases filed after July 1, 2026 over older agreements; no court we found has interpreted it, so that question is open.

Time limits: the statutory presumptions (T.C.A. 50-1-210)

T.C.A. 50-1-210 addresses how long a restraint may run. It does not set hard caps. Instead, it tells a court which periods to treat as reasonable:

The statute then says: "A court shall presume that a time restraint greater than the applicable restraint described in subdivision (b)(1), (b)(2), or (b)(3) is unreasonable." A presumption can be rebutted, so a longer period is not automatically void, but the party enforcing it starts at a disadvantage.

Section 50-1-210 speaks only to time. Whether the geographic area and the activities covered are reasonable is still decided under the common-law test.

The common-law reasonableness test

For employees earning $70,000 or more, and for older agreements, Tennessee's court-made rule still decides most cases. In Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471 (Tenn. 1984), the Tennessee Supreme Court said covenants not to compete are "not favored in Tennessee because they are in restraint of trade," and that the modern trend is to construe them in the employee's favor. They are not invalid on their face, though; a reasonable covenant can be enforced.

The court weighed four factors:

• the consideration supporting the covenant;
• the threatened danger to the employer without it;
• the economic hardship the covenant imposes on the employee; and
• whether the covenant is against the public interest.

The court also held that an employer cannot use a contract simply to restrain ordinary competition. It needs a protectable interest, such as trade secrets, confidential information or close relationships with customers. Applying those rules, the court held the truck driver's covenant in Hasty unenforceable, reversing the Court of Appeals.

Consideration and signing

In Central Adjustment Bureau, Inc. v. Ingram, 678 S.W.2d 28 (Tenn. 1984), the Tennessee Supreme Court held that a covenant signed before, at or shortly after employment begins is part of the original employment agreement and is supported by adequate consideration.

Neither 50-1-210 nor 50-1-211 adds a notice period, a right to consult a lawyer, a garden-leave payment or any other signing formality. For a covenant signed partway through a job, Ingram held that a bare promise of continued at-will employment is not enough consideration, but employment that actually continues afterward can be. Whether it is enough "depends upon the facts and circumstances of each case," and the court said "employment for only a short period of time" might not be.

What a court does with an overbroad covenant

Tennessee courts can trim an overbroad covenant rather than throw it out. Ingram, deciding the question for the first time in Tennessee, rejected the "blue pencil" rule, which only lets a court strike whole words, and adopted a "rule of reasonableness": "We are persuaded that the rule of reasonableness is the better rule." Under it, a court may enforce a covenant to the extent reasonably necessary to protect the employer, unless the employer acted in bad faith.

The 2026 statute confirms the power for covenants it governs: "A court may modify a restrictive covenant governed by this section to render it reasonable and enforceable" (T.C.A. 50-1-210). The $70,000 rule works differently. Section 50-1-211 does not speak of modification; it declares a non-compete signed in violation of it "void and unenforceable as a matter of public policy."

Health care providers

Physicians have been treated separately since Murfreesboro Medical Clinic, P.A. v. Udom, 166 S.W.3d 674 (Tenn. 2005). The Tennessee Supreme Court held that "except for those specifically prescribed by statute, physicians' covenants not to compete are unenforceable and void" as a matter of public policy.

The statute that now sets those terms is T.C.A. 63-1-148. The General Assembly's official summary of House Bill 1034 describes it as covering podiatrists, chiropractors, dentists, medical physicians, osteopathic physicians and psychologists. Public Chapter 934 did not amend it.

The text of 63-1-148 that our research could check comes from a 2021 copy of the Tennessee Code held in our statute library, not the current official code, so confirm the current wording before relying on it. As that text reads, a restriction on a provider's right to practice after the job ends is deemed reasonable if:

• it is in a written agreement signed by the provider and the employing or contracting entity; and
• it lasts two years or less, and either limits the area to the greater of a ten-mile radius from the primary practice site or the county where that practice is located, or has no geographic limit but bars practice only at facilities where the employer provided services.

In that same text, agreements made on the sale of a practice get a rebuttable presumption of reasonableness, and the section does not apply to emergency-medicine physicians. It applies to providers licensed under chapters 3, 4, 5, 6, 8, 9 and 11 of Title 63, which takes in optometrists (chapter 8) as well as the professions the bill summary names.

Those terms may be a safe harbor rather than a ceiling. Ruling on summary-judgment motions in Upperline Healthcare, PC v. Hoover, No. 3:24-cv-00678 (M.D. Tenn. May 29, 2026), a federal district court held that 63-1-148 "does not impose an upper limit on reasonability of geographic restrictions in physician covenants not to compete" and found a 15-mile restriction on a podiatrist reasonable. That is one federal trial court's reading of the statute, not a Tennessee appellate holding; the court noted that, to its knowledge, "no Tennessee court has construed § 63-1-148(a)." Under that reading, a covenant broader than the statute's terms is not automatically void, but it still has to be shown reasonable.

Physicians employed by hospitals. T.C.A. 63-6-204(f) adds rules for physicians employed by a hospital or a hospital affiliate, other than radiologists, anesthesiologists, pathologists and emergency physicians. In the 2021 text our research used, the employer may not restrict the physician's right to practice after the job ends except under 63-1-148 or in connection with a bona fide purchase of the physician's practice. If the employer ends the job of a physician hired independently of a practice purchase "for reasons other than breach by the employee, any such restrictions shall be void." For purchased practices, that text limits the area to the greater of the county or 10 miles, limits the period to 2 years (up to 5 by written agreement where needed to comply with federal law), and requires a buy-back option at the original purchase price, or up to fair market value if agreed in writing, on no more than 30 days' notice.

A separate subsection, 63-6-204(h), lets a faculty practice plan associated with a medical school restrict an employed physician for up to 2 years within the greater of the county or 10 miles of the primary practice site. It adds that it does not "preclude the enforceability of any restrictive covenant or prohibition exceeding the requirements or conditions of this subsection (h) that is reasonable and not inimical to the public interest under the common law principles governing restrictive covenants."

Fired versus quit

Tennessee has no general statute that changes the rule when an employer fires you instead of you quitting. The one statutory rule we found is the hospital-physician provision above, which voids the restriction when the hospital ends the job for reasons other than the physician's breach.

Separately, Ingram treats employer bad faith as a reason a court will not modify an overbroad covenant. The court also said that a discharge which is "arbitrary, capricious or in bad faith clearly has a bearing on whether a court of equity should enforce a non-competition covenant."

Sale of a business

Covenants given by the seller of a business get the longest statutory window: the longer of 5 years or less, or the period payments are made to the owner or seller (T.C.A. 50-1-210(b)(3)). The $70,000 rule in 50-1-211 is written around an "employee's" compensation; whether it reaches an owner who sold a business and also works for the buyer is not answered by the text.

Non-solicits, NDAs and trade secrets

Section 50-1-210(c) states that it "does not prohibit an employer from enforcing" a confidentiality or nondisclosure agreement, a client or customer non-solicitation agreement, or an employee non-solicitation agreement. That carve-out appears in 50-1-210, not in the $70,000 section. Because 50-1-211 does not define "noncompete agreement," whether it reaches non-solicitation clauses for lower-paid employees is an open question no court has answered that we found.

Trade-secret law is separate. It protects specific confidential information whether or not you signed any covenant; see Tennessee trade secret laws.

Choice of law and enforcement

We found no Tennessee statute on non-compete clauses that choose another state's law or courts, and the 2026 act does not address the question. Our research did not go further on it.

We found no Tennessee agency that enforces these rules; the act names none, and non-compete disputes are decided in court.

Recent and pending changes

• House Bill 1034 / Senate Bill 995 (Public Chapter 934), enacted. The House passed the amended bill on April 16, 2026, by 74-8-9; the Senate substituted it for SB 995 and passed it on April 23, 2026, by 28-4. It was signed by the Governor on May 15, 2026 and took effect July 1, 2026. As filed, HB 1034 would have voided most non-competes; House Amendment 2 rewrote it into the $70,000 rule and the time presumptions. Our news report on the $70,000 law covers its passage.
• House Bill 1206 / Senate Bill 852 (2025), stalled. Would have lengthened the physician practice buy-back standoff period in 63-6-204(f) from 10 to 30 business days. Both bills were sent to subcommittees in March 2025 with no later action listed.

Bills for the 115th General Assembly, which convenes in January 2027, were not yet listed when we checked.

The federal FTC rule

The FTC's nationwide non-compete rule never took effect. A federal court in Texas set it aside on August 20, 2024 (Ryan, LLC v. FTC, No. 3:24-CV-00986-E, N.D. Tex.), the FTC voted on September 5, 2025 to dismiss its appeals, and the rule was removed from the Code of Federal Regulations effective February 12, 2026. The FTC still acts case by case; on June 22, 2026 it approved a final order requiring a pest-control company to stop enforcing non-competes. See FTC non-compete ban struck down and the non-compete laws by state guide.

What this means if you signed one

The first questions in Tennessee are factual: when was the agreement signed, renewed or amended, and what is your annualized compensation from that employer? For an agreement on or after July 1, 2026 with pay under $70,000, the statute calls it void. Above that line, the questions become how long it runs against the 50-1-210 presumptions, what interest the employer is protecting, and whether a health care statute applies. For when an employer can end the job in the first place, see Tennessee at-will employment laws. A lawyer licensed in Tennessee can review a specific agreement.

Related

• Non-compete laws by state
• Tennessee's $70,000 non-compete law (news)
• Tennessee trade secret laws
• Tennessee severance pay laws
• Tennessee at-will employment laws
• FTC non-compete ban struck down

Disclaimer: This article provides general legal information about Tennessee non-compete law, including T.C.A. 50-1-210, 50-1-211, 63-1-148 and 63-6-204(f) and the Tennessee Supreme Court decisions applying the reasonableness test, not legal advice. The information was last verified on 2026-10-08. Tennessee non-compete disputes are decided by the courts; for advice about a specific agreement, contact a legal aid office or a lawyer licensed in Tennessee.

Last updated: 2026-10-08.

Frequently Asked Questions

Are non-competes enforceable in Tennessee?

Sometimes. Since July 1, 2026, T.C.A. 50-1-211 voids a non-compete with an employee whose annualized compensation is less than $70,000; above that figure, a court enforces a non-compete only if it is reasonable under Hasty v. Rent-A-Driver (Tenn. 1984), with the time presumptions in T.C.A. 50-1-210.

What is the salary threshold for a Tennessee non-compete?

$70,000 in annualized compensation, counting wages, salary, commissions, nondiscretionary bonuses and other pay from the employer (T.C.A. 50-1-211(b)). The act text sets no automatic adjustment to the figure.

How is the $70,000 figure calculated for hourly workers?

Multiply the hourly rate by 40, then multiply that by 52 (T.C.A. 50-1-211(b)).

Does the $70,000 rule apply to a non-compete I signed before July 2026?

The act applies to agreements entered into, renewed or amended on or after July 1, 2026, and to proceedings occurring on or after that date. How the proceedings wording applies to an older agreement enforced after that date has not been settled by a court we found, so ask a Tennessee lawyer.

How long can a non-compete last in Tennessee?

T.C.A. 50-1-210 presumes a restraint on an employee or independent contractor unreasonable if it runs longer than 2 years after the job ends. It is a presumption a court applies, not a hard cap, and the court may modify the covenant.

Can a Tennessee court rewrite an overbroad non-compete?

Yes, for covenants governed by T.C.A. 50-1-210, and under Central Adjustment Bureau v. Ingram (1984) a court may enforce a covenant to the extent it is reasonable unless the employer acted in bad faith.

Are doctor non-competes allowed in Tennessee?

Only as a statute allows. Murfreesboro Medical Clinic v. Udom (2005) held physician covenants void except those prescribed by statute, and T.C.A. 63-1-148 sets the terms under which a covenant with a covered health care provider is deemed reasonable. A federal trial court in Upperline Healthcare v. Hoover (M.D. Tenn. 2026) read those terms as a safe harbor rather than an upper limit; no Tennessee appellate court has decided that question.

Does the new law ban non-solicitation agreements in Tennessee?

T.C.A. 50-1-210(c) says that section does not stop an employer from enforcing confidentiality, customer non-solicitation or employee non-solicitation agreements. Whether the $70,000 rule in 50-1-211 reaches non-solicits is an open question.

Does the FTC non-compete ban apply in Tennessee?

No. A federal court set the FTC rule aside on August 20, 2024, and it was removed from the Code of Federal Regulations effective February 12, 2026. Tennessee law governs.