Non Compete Agreement State of Tennessee

If you`re a business owner in Tennessee, you may have heard of a non-compete agreement. A non-compete agreement is a legal document that prohibits an employee from working for a competitor or starting a competing business for a certain period of time after leaving their current employer. These types of agreements are becoming more common in the business world, but not all states allow them.

In Tennessee, non-compete agreements are generally enforceable, but there are certain restrictions that employers must follow. For example, the agreement must be reasonable in scope and duration, meaning that it cannot be overly broad or prevent the employee from finding other employment options.

Another restriction in Tennessee is that the non-compete agreement must be supported by valuable consideration. This means that the employer must offer something of value to the employee in exchange for signing the agreement, such as a raise, promotion, or access to confidential information.

Tennessee also has a “blue pencil” rule, which allows a court to modify an overly broad non-compete agreement to make it reasonable and enforceable. This means that if a court finds that a non-compete agreement is too restrictive, it can still be enforced with certain modifications.

It`s important to note that non-compete agreements are not always the best option for every business or industry. In some cases, they may be too restrictive and prevent employees from finding new job opportunities or starting their own businesses. For this reason, it`s important to consult with a legal professional to determine if a non-compete agreement is appropriate for your business needs.

Overall, non-compete agreements are enforceable in Tennessee, but they must be reasonable in scope and duration, supported by valuable consideration, and subject to the “blue pencil” rule. As a business owner, it`s important to carefully consider the potential benefits and drawbacks of non-compete agreements before implementing them in your organization.