Are non-compete agreements enforceable in Tennessee?

1. Baseline Rule. No general statute; common law controls. Vantage Technology, LLC v. Cross, 17 S.W.3d 637 (Tenn. Ct. App. 1999), and Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471 (Tenn. 1984), set the framework. The court asks whether the covenant (a) protects a legitimate business interest, (b) is reasonable as to time and territory, and (c) is not against public policy.

2. Reasonableness Factors. Legitimate interests include trade secrets, confidential information, customer relationships, and special training. Tennessee weighs the consideration paid, the threat to the employer's interest, the economic hardship on the employee, and the public interest.

3. Consideration. Continued at-will employment is sufficient consideration in Tennessee.

4. Wage Thresholds. None.

5. Blue Pencil / Reformation. Tennessee applies a "reasonable alteration" rule — courts may modify overbroad covenants to render them reasonable. Central Adjustment Bureau, Inc. v. Ingram, 678 S.W.2d 28 (Tenn. 1984).

6. Physician Carve-Out. Tenn. Code § 63-1-148 governs physician non-competes. Such covenants are enforceable only if (a) duration ≤ 2 years, (b) geographic restriction ≤ greater of the county where the practice is located or a 10-mile radius from primary practice site, and (c) certain other conditions. Hospital-employed physicians have additional protections.

7. Industry Carve-Outs. Lawyers barred by Tenn. RPC 5.6. Healthcare providers have specific protections.

8. FTC Rule. Enjoined nationwide by Ryan LLC v. FTC (E.D. Tex. Aug. 2024); on appeal.

9. Garden Leave / Forfeiture-for-Competition. Permitted.

10. Choice of Law. Tennessee courts apply Tennessee law where another state's law conflicts with Tennessee public policy, especially physician protections.

This is legal information, not legal advice.