Tennessee Enacts Noncompete Law: $70K Income Threshold and Rebuttable Presumptions on Duration

Short summary

Tennessee's HB 1034, effective July 1, 2026, prohibits noncompete agreements for employees earning under $70,000 annually and establishes rebuttable presumptions for noncompete duration reasonableness. Presumptive periods are 2 years for employees, 3 years for distributors/dealers, and 5 years for sale-of-business agreements. Courts retain discretion to modify overly long restrictions rather than voiding them automatically.

• •Noncompetes banned for Tennessee employees earning below $70K annualized compensation
• •Statutory rebuttable presumptions: 2yr employees, 3yr distributors, 5yr sale-of-business
• •Law is not retroactive; only agreements entered on or after July 1, 2026 are affected

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