Emily WangNon-compete or non-solicitation? For Tennessee employers designing post-employment restrictions, the choice defines both what can be protected and how likely a court is to enforce it. For employees, understanding the difference determines whether a clause they signed can actually stop them from taking a new job — and under what conditions Tennessee courts will throw it out entirely.
Tennessee enforces all three types of restrictive covenants — non-compete agreements, non-solicitation clauses, and non-disclosure agreements (NDAs) — but applies different scrutiny to each. Non-competes face the most demanding reasonableness review. NDAs face almost none. Non-solicitation clauses sit in between. This comparison explains where each stands under Tennessee law and when to use — or challenge — each type.
Three Types of Restrictive Covenants Under Tennessee Law
| Type | What it restricts | Enforceability scrutiny | Statutory basis |
|---|---|---|---|
| Non-compete agreement | Working for a competitor or starting a competing business | High — full reasonableness review | T.C.A. § 47-50-113 |
| Non-solicitation clause | Soliciting former clients or coworkers | Moderate — still needs legitimate interest | Common law + T.C.A. § 47-50-113 |
| Non-disclosure agreement (NDA) | Disclosing confidential information or trade secrets | Low — broad enforcement unless unconscionable | Tennessee Uniform Trade Secrets Act (TUTSA), T.C.A. § 47-25-1701 |
The 2020 Tennessee Restrictive Covenants Act (T.C.A. § 47-50-113) codified the standards courts had applied for decades: agreements must be supported by adequate consideration, protect a legitimate business interest, and be reasonable in scope, duration, and geography.
Non-Compete Agreements: Tennessee's Enforceability Gauntlet
A Tennessee non-compete agreement is enforceable only if it clears four hurdles:
1. Adequate Consideration
Consideration for a new employee is the offer of employment itself. For existing employees, continued employment alone is generally insufficient in Tennessee — courts have required something additional, such as a promotion, raise, access to confidential information, or specialized training, to support a non-compete signed after the employment relationship begins.
2. Legitimate Business Interest
Tennessee courts recognize several legitimate interests that can justify a non-compete:
- Protection of trade secrets and confidential business information
- Protection of specialized training and investment the employer made in the employee
- Protection of customer relationships and goodwill where the employee had direct customer contact
General skills the employee developed independently do not constitute a protectable interest. An employer cannot use a non-compete to prevent a carpenter from ever working in construction — only to protect the specific client relationships or proprietary methods that distinguish that employer's business.
3. Reasonable Duration
Tennessee courts regularly enforce non-competes ranging from 6 months to 2 years. Restrictions of 3 years or more face significantly higher scrutiny and are frequently reduced or voided. The key factor is whether the duration is necessary to protect the legitimate interest identified — a company whose customer contracts last 6 months probably cannot justify a 2-year restriction for a salesperson.
4. Reasonable Geographic Scope
The geographic restriction must track where the employer does business and where the employee had meaningful customer contact. A Nashville-based HR software company cannot impose a nationwide non-compete on a sales representative who only called on Tennessee and Kentucky accounts.
À retenir: Tennessee's "blue-pencil" doctrine allows courts to delete unreasonable terms from a non-compete rather than voiding the entire agreement. This means a court may enforce a 1-year restriction out of an attempted 3-year clause — reducing rather than eliminating the employer's protection. Employees should never assume that an overbroad non-compete is unenforceable simply because it contains unreasonable terms.
Non-Solicitation Agreements: The More Enforceable Alternative
Non-solicitation agreements — which prohibit a departing employee from soliciting the employer's clients or recruiting its employees — face a lower bar than non-competes because they restrict fewer of the employee's options. The employee remains free to compete in the market; they simply cannot actively pursue the former employer's specific customer base or staff.
Scenario: A Memphis financial advisor leaves her firm and joins a competitor. Her non-solicitation clause prohibits her from contacting clients she personally managed for 18 months. She cannot call, email, or meet with those clients to move their accounts — but nothing prevents her from serving new clients or clients she never worked with at the old firm. A Tennessee court would almost certainly enforce this clause as written.
Tennessee courts apply a narrower reasonableness test to non-solicitation agreements:
- The restriction must be limited to clients or employees the departing employee actually knew and worked with
- The duration is typically measured against the length of customer relationships (6 months to 1 year is commonly upheld)
- A blanket prohibition on any contact with any former client of the entire firm — regardless of whether the employee knew them — is likely to be reduced
Non-solicitation of employees (sometimes called "anti-raiding" clauses) are also enforceable in Tennessee when the employer has a legitimate interest in workforce stability and the restriction is narrowly tailored to key employees rather than all staff.
NDAs and Trade Secret Protection: Broadest Enforcement
Non-disclosure agreements and trade secret protections under the Tennessee Uniform Trade Secrets Act (TUTSA) are the most reliably enforced category of restrictive covenant. Tennessee courts will enjoin disclosure of qualifying trade secrets — customer lists, pricing algorithms, proprietary software, formulas, methods — without the extensive reasonableness review that applies to non-competes.
A trade secret under TUTSA must: (1) derive independent economic value from not being generally known or readily ascertainable, and (2) be the subject of reasonable measures to maintain its secrecy. Employers who share "confidential" information broadly internally, do not use password protection, or never train employees on confidentiality policies may find that courts decline to classify that information as a trade secret.
Practical Comparison: Which Instrument to Use When
| Situation | Best instrument | Why |
|---|---|---|
| Senior executive with access to strategic plans | NDA + narrow non-compete | Trade secrets warrant both; exec has high legitimate business interest |
| Sales rep with customer relationships | Non-solicitation (client-specific) | Protects customer relationships without overbroad competition restriction |
| Developer with access to proprietary code | NDA + TUTSA protection | Code is a trade secret; non-compete often unnecessary |
| General worker without client contact | NDA only | Non-compete likely fails "legitimate business interest" test |
| Departing employee being offered a severance | Non-compete in exchange for severance | Severance constitutes valid consideration; courts regularly enforce |
Disclaimer: Tennessee non-compete and restrictive covenant law is highly fact-specific. Whether a particular agreement is enforceable depends on the specific industry, the employee's role, the geographic market, and how the agreement was drafted. Consult a licensed Tennessee employment attorney before signing or attempting to enforce any restrictive covenant.
The FTC Non-Compete Rule and Its Status in Tennessee
In April 2024, the Federal Trade Commission issued a rule that would have effectively banned most non-compete agreements for most workers nationwide. The rule was challenged immediately in federal court, and in August 2024 a federal judge in Texas issued a nationwide injunction blocking its enforcement. As of 2026, the FTC rule has not taken effect — Tennessee employers and employees should not assume it governs their agreements.
The practical implication: Tennessee's state-law reasonableness standard remains the operative framework for non-compete enforceability. Workers in Tennessee do not have a federal right to void their non-compete agreements absent a successful challenge in Tennessee state court or (for FLSA claims) federal district court. The FTC's legal battle may eventually produce a different outcome, but until the rule takes effect — if it does — state law controls.
Frequently Asked Questions About Tennessee Non-Compete Agreements
Can a Tennessee employer fire me for refusing to sign a non-compete? In theory, yes — Tennessee is an at-will state, and refusing to sign can be grounds for termination. Whether the employer would actually terminate over a refusal is a separate question. If you are asked to sign a non-compete mid-employment, you have more leverage to negotiate terms than at the point of hire.
Does the blue-pencil doctrine help employees or employers? Both, but unevenly. Courts can narrow an overbroad non-compete to make it enforceable — which helps employers preserve some protection they might otherwise lose entirely. But it also means employees cannot rely on overbreadth as a complete defense; a court may rewrite a 5-year national non-compete into a 1-year regional one and then enforce it against you.
What if I was fired without cause — does that affect my non-compete? Tennessee courts consider the circumstances of termination when evaluating the reasonableness of continuing to enforce a non-compete after involuntary separation. Being terminated without cause does not automatically void the agreement, but it is a factor that can reduce the enforceability of restrictions that seem punitive in context.
