Tennessee non-compete law

Pay figure in the law

$70,000 a year

Separate rules for professions

None found in the statutes we read

Statutes and official texts quoted

Tenn. Code Ann. § 50-1-211(a) (2026 Tenn. Pub. Acts ch. 934); Tenn. Code Ann. § 50-1-211(b); Tenn. Code Ann. § 50-1-211(c); Tenn. Code Ann. § 50-1-210(a)-(b)(1); Tenn. Code Ann. § 50-1-210(b)(3); Tenn. Code Ann. § 50-1-210(c); Tenn. Code Ann. § 50-1-210(d); 2026 Tenn. Pub. Acts ch. 934, § 3

Is a non-compete allowed?

A noncompete agreement executed in violation of the $70,000 rule is void and unenforceable as a matter of public policy.

“A noncompete agreement executed in violation of this section is void and unenforceable as a matter of public policy.”
Tenn. Code Ann. § 50-1-211(c)

Pay thresholds

Tennessee bars employers from requiring, requesting, or enforcing a noncompete agreement against an employee whose annualized compensation is less than $70,000.

“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).”
Tenn. Code Ann. § 50-1-211(a) (2026 Tenn. Pub. Acts ch. 934)

Annualized compensation includes wages, salary, commissions, nondiscretionary bonuses and other pay; for hourly employees it is the hourly rate times 40 times 52.

“Annualized compensation for an hourly employee must be calculated by multiplying the employee's hourly rate by forty (40) and multiplying the product by fifty-two (52).”
Tenn. Code Ann. § 50-1-211(b)

Exceptions

For a covenant against the owner or seller of all or a material part of a business or equity interest, a restraint of the longer of five years or less, or the period payments are made to the owner or seller, is presumed reasonable in time.

“A court shall presume to be reasonable in time a restraint that is the longer of five (5) years or less, or a period equal to the time during which payments are made to the owner or seller”
Tenn. Code Ann. § 50-1-210(b)(3)

The time-reasonableness section does not prohibit enforcing confidentiality or nondisclosure agreements, client or customer nonsolicitation agreements, or employee nonsolicitation agreements.

“This section does not prohibit an employer from enforcing: (1) A confidentiality or nondisclosure agreement; (2) A client or customer nonsolicitation agreement; or (3) An employee nonsolicitation agreement.”
Tenn. Code Ann. § 50-1-210(c)

Limits on length and area

Courts presume a post-employment restraint against a former employee or independent contractor reasonable in time if it lasts two years or less (and is not tied to a business sale or ownership), and presume a longer restraint than the applicable limit unreasonable; these presumptions are rebuttable.

“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.”
Tenn. Code Ann. § 50-1-210(a)-(b)(1)

If it is challenged

A court may modify a restrictive covenant governed by section 50-1-210 to make it reasonable and enforceable.

“A court may modify a restrictive covenant governed by this section to render it reasonable and enforceable.”
Tenn. Code Ann. § 50-1-210(d)

When the rules took effect

The Tennessee law took effect July 1, 2026, and applies to proceedings occurring and agreements entered into, renewed, or amended on or after that date.

“This act takes effect July 1, 2026, the public welfare requiring it, and applies to proceedings occurring and agreements entering into, renewed, or amended, on or after that date.”
2026 Tenn. Pub. Acts ch. 934, § 3

Federal rules

On September 5, 2025, the FTC moved to dismiss its appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC and to accede to vacatur of the Non-Compete Clause Rule. FTC press release, Sept. 5, 2025

The FTC's final rule removes the Non-Compete Rule (16 CFR part 910) from the Code of Federal Regulations. 91 Fed. Reg. (Feb. 12, 2026), FR Doc. 2026-02866

Before you sign, or before you assume you are bound

1. Find every restrictive clause: non-compete, non-solicitation, no-hire and confidentiality are separate promises with separate rules.
2. Note how long each lasts and what area or customers it covers.
3. Check which state’s law the agreement picks and where disputes must be heard.
4. Compare your pay and your job with the Tennessee rules above.

Check your state with the non-compete checker.

Common questions

Are non-competes enforceable in Tennessee?

A noncompete agreement executed in violation of the $70,000 rule is void and unenforceable as a matter of public policy. (Tenn. Code Ann. § 50-1-211(c)).

Is there a salary threshold for non-competes in Tennessee?

Tennessee bars employers from requiring, requesting, or enforcing a noncompete agreement against an employee whose annualized compensation is less than $70,000. (Tenn. Code Ann. § 50-1-211(a) (2026 Tenn. Pub. Acts ch. 934)).