Non-Compete Agreement in Tennessee
State-specific overview · Employment Law
Tennessee enforces reasonable non-competes protecting legitimate business interests, with a statutory framework requiring reasonable time, area, and line of business limits.
How Tennessee treats Non-Compete Agreement
Tennessee Code Annotated § 47-25-101 et seq. establishes that non-compete agreements are enforceable if they protect trade secrets, confidential business information, substantial relationships with prospective or existing customers, or other legitimate business interests. The restriction must be reasonable in duration, geographic area, and line of business. Courts examine whether the restriction is no greater than necessary to protect the employer's legitimate interests. Agreements that are overly broad or lack legitimate business purpose will be unenforceable.
The general definition of Non-Compete Agreement
A contract clause restricting an employee from working for competitors or starting a competing business after leaving.
A non-compete agreement is a contract between an employer and employee that prevents the employee from working for a competitor or starting a competing business for a set period after leaving the job. These agreements are designed to protect the employer's trade secrets and customer relationships. However, courts scrutinize them carefully because they restrict a person's right to earn a living. A non-compete is generally enforceable only if it is reasonable in scope (limited to a specific geographic area and time period) and protects a legitimate business interest. Some states, like California, disfavor non-competes entirely.
Read the full Non-Compete Agreement entry →This page is a plain-English reference and is not legal advice. State laws change frequently. For specific situations consult a licensed attorney in Tennessee.