Last month, Tennessee passed a law limiting non-compete agreements for low-wage workers. The law takes effect July 1, 2026, and applies to any non‑compete entered into, renewed, or amended on or after that date.
At a high level, the law: (1) prohibits non-compete agreements for employees earning less than $70,000 annually; (2) preserves a court’s ability to modify overly broad non-competes (for employees earning more than $70,000 annually), rather than voiding them entirely; (3) introduces rebuttable presumptions about how long a non‑compete may last; (4) does not ban non‑competes outright; (5) does not prohibit other common restrictive covenants such as confidentiality agreements, customer non‑solicitation provisions, and employee non‑solicitation provisions; and (6) is not retroactive.
Calculating the Annual Earnings Threshold
Earnings that count toward the $70,000 annualized income threshold include wages, salary, commissions, and non‑discretionary bonuses. For hourly employees,… Read the complete article here...
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