Tennessee significantly changed its non-compete landscape in 2026. If you work in Tennessee, your salary level now plays a critical role in whether your non-compete can be enforced at all.
Tennessee's New Salary Threshold — Effective July 1, 2026
Effective July 1, 2026, Tennessee prohibits non-compete agreements with employees earning less than $70,000 per year. This is a hard threshold — if you earn at or below $70,000, a non-compete signed after this date is void and unenforceable under Tennessee law.
✅ If you earn $70,000 or less per year and your non-compete was signed on or after July 1, 2026, it is void under Tennessee law. Even if your employer threatens legal action, an unenforceable agreement cannot be enforced against you.
⚠️ Non-competes signed before July 1, 2026 may still be subject to the old Tennessee law. If your agreement predates the new law, consult an employment attorney to understand how it affects your specific situation.
The New Tiered Framework for Duration
Tennessee's 2026 law also establishes a tiered framework courts must apply when evaluating whether a non-compete's duration is reasonable. Previously, Tennessee courts had broad discretion in assessing duration. The new framework provides clearer standards for both employees and employers.
Tennessee Law for Higher Earners (Over $70,000)
For employees above the $70,000 threshold, Tennessee courts apply a reasonableness standard. Tennessee follows the majority rule that non-competes must be reasonable in:
- Duration — courts historically viewed 1-2 years as reasonable
- Geographic scope — must correspond to where the employer does business
- Scope of restricted activity — must be tied to what the employee actually did
Tennessee and the Blue Pencil Rule
Tennessee courts apply what is sometimes called "partial enforcement" — they can modify an overbroad non-compete to make it reasonable rather than voiding it entirely. A court might reduce a 3-year restriction to 1 year, or narrow a nationwide restriction to a regional one.
Consideration in Tennessee
Tennessee requires that employees receive something of value — consideration — in exchange for signing a non-compete. Employment itself is generally considered adequate consideration for agreements signed at hire. Mid-employment non-competes should be supported by additional benefit beyond continued employment.
Medical Non-Competes in Tennessee
Tennessee has specific rules governing non-compete agreements for physicians and other healthcare practitioners. Courts apply heightened scrutiny to medical non-competes due to the public interest in patient access to care. If you are a healthcare worker, your non-compete analysis may differ from the general framework above.