Tennessee non-compete law: the 2026 $70,000 floor for recruiters

Tennessee courts have long enforced reasonable non-competes, and since July 1, 2026 a statute sets two hard edges. Public Chapter 934 of 2026 bars an employer from requiring, requesting or enforcing a non-compete against an employee whose annualized compensation is under $70,000, and tells courts to presume a non-compete of two years or less reasonable in time and anything longer unreasonable. It applies to agreements entered into, renewed or amended on or after July 1, 2026; older agreements still turn mainly on the court-made reasonableness test. Physicians and some other licensed providers have their own rule in Tenn. Code Ann. 63-1-148, as of October 2026.

For a recruiter, the new questions are dates and pay bands: when the candidate signed or last renewed the agreement, and whether their pay at that employer is above or below $70,000. The general screen is in non-compete questions for candidates, and the agency-side clauses are in non-solicitation clauses for recruiters.

What changed in Tennessee non-compete law on July 1, 2026?

House Bill 1034 (Senate companion SB 995) passed the House 74-8 on April 16, 2026 and the Senate 28-4 on April 23, 2026, and was signed by the Governor on May 15, 2026. As Public Chapter 934, it adds two sections to Title 50, Chapter 1, Part 2:

• Section 50-1-211, the pay floor. "Notwithstanding a law to the contrary, an employer shall not require, request, or enforce a noncompete agreement against an employee whose annualized compensation is less than seventy thousand dollars ($70,000)." An agreement made in violation "is void and unenforceable as a matter of public policy."
• Section 50-1-210, the time presumptions. Courts must apply rebuttable presumptions on how long a restrictive covenant may last after the relationship ends, and "may modify a restrictive covenant governed by this section to render it reasonable and enforceable."

Section 3 of the act says it "takes effect July 1, 2026" and "applies to proceedings occurring and agreements entering into, renewed, or amended, on or after that date." A 2023 agreement that was amended in August 2026 may therefore be in a different position from one that was never touched. Ask about renewals and amendments, not just the original signing date.

Who falls under the $70,000 floor?

"Annualized compensation" means the total compensation the employee earns from the employer, "including wages, salary, commissions, nondiscretionary bonuses, and other forms of remuneration," calculated on an annualized basis. For an hourly employee it is the hourly rate times 40 times 52, so the floor works out to about $33.66 an hour (our arithmetic: $33.65 an hour annualizes to $69,992, below the line; $33.66 annualizes to $70,012.80).

Three things the statute does not spell out, and that counsel will want to look at:

• When pay is measured. It bars requiring, requesting or enforcing, so pay at signing and pay at enforcement may both matter.
• What counts as a "noncompete agreement." Section 50-1-211 does not define the term, while section 50-1-210 says it does not prohibit enforcing confidentiality agreements, customer non-solicitation agreements or employee non-solicitation agreements.
• Reach across state lines. The section speaks of "an employer" and "an employee" without saying which state's workers it covers.

How long can a Tennessee non-compete last?

A restraint longer than the applicable period is presumed unreasonable. The presumptions cover time only; the area and the activity restricted are still judged under Tennessee case law.

What test do Tennessee courts apply?

Before 2026 Tennessee had no general employee non-compete statute, and the court test still governs everything the act does not address. In Hasty v. Rent-A-Driver, Inc. (1984), the Tennessee Supreme Court treated covenants not to compete as disfavored restraints of trade, construed strictly in favor of the employee, and enforceable only where the employer has a legitimate business interest beyond ordinary competition, such as specialized training, trade secrets or confidential information, or customer relationships the employee built on the employer's behalf. Courts also weigh the hardship on the employee, the public interest, and whether the time and territory go no further than necessary.

Two further points come from Central Adjustment Bureau, Inc. v. Ingram (Tenn. 1984): continued employment for a substantial period after signing can supply consideration for a covenant signed after the job began, and a court may modify an overbroad covenant and enforce it to a reasonable extent unless the employer acted in bad faith. Section 50-1-210(d) now writes modification into the statute for covenants it governs. For a comparison with a strict blue pencil state, see North Carolina non-compete law.

What about physicians and other health care providers?

Tenn. Code Ann. 63-1-148 deems a restriction on an employed or contracted health care provider's right to practice after the relationship ends reasonable if it is in an agreement or other writing signed by both sides, lasts two years or less, and either (A) is limited to the greater of a ten-mile radius from the provider's primary practice site or the county where that site is located, or (B) has no geographic limit but bars practice only at facilities where the employer provided services while the provider worked there. A separate subsection covers the sale of a practice. The section applies to providers licensed under the chapters of Title 63 it lists, which include physicians and podiatrists, and does not apply to physicians who specialize in emergency medicine.

The background is Murfreesboro Medical Clinic, P.A. v. Udom (Tenn. 2005), in which the Tennessee Supreme Court held covenants restricting a physician's practice unenforceable as against public policy, apart from those the legislature had authorized. Public Chapter 934 does not mention section 63-1-148 in its text, so how the $70,000 floor and the new presumptions interact with clinician covenants is a question for counsel. Healthcare recruiters should capture the license, the radius, the practice site and the signing or renewal date.

Tennessee non-compete rules at a glance

What should a recruiter ask a Tennessee candidate?

Ask early in the phone screen, in the same words for every candidate, and write down facts only.

TENNESSEE CANDIDATE — restrictive agreements

1. "Have you signed a non-compete, a customer or employee non-solicit,
    or a confidentiality agreement with your current or a past employer?"
2. "When did you sign it, and has it been renewed or amended since?
    Was that before or after July 1, 2026?"
3. "How long does it last after you leave, and what area or
    customers does it name?"
4. Only if counsel needs it: "Is your total pay there at or above
    $70,000 a year?" (a yes or no is enough)
5. Health care roles: "Which license do you hold, and what radius,
    county or facilities does the restriction name?"
6. "Does it say which state's law applies or where disputes go?"
Always: "We don't want any confidential information, documents or
client lists from your current employer."

Tennessee has no statewide salary history ban, as the Tennessee hiring guide notes, but candidates living elsewhere may be covered by one; see salary history ban states. A yes-or-no threshold question gives counsel what it needs without collecting a pay figure.

What is the risk to the hiring company?

Tennessee adds a statutory risk most states lack. Tenn. Code Ann. 47-50-109 makes it unlawful to induce or procure the breach of a lawful contract, and makes the person who procures the breach liable for three times the resulting damages. A former employer that believes a competitor lured its employee into breaking a valid non-compete can sue under that section as well as the common-law interference tort, and whether the elements are met depends on what the new employer knew and did.

The practical response is the same as anywhere, done earlier: learn about the agreement before final interviews, let the client's counsel read it before the offer, never encourage a candidate to ignore it, and confirm at the offer call that the company wants no confidential information.

What if your client is the Tennessee employer?

The floor binds your client's own offers. For agreements from July 1, 2026, a Tennessee employer may not even request a non-compete from a hire whose annualized compensation will be under $70,000, so check the offer packet for a non-compete before an hourly or entry-level offer goes out. Customer and employee non-solicits and confidentiality terms are treated separately in section 50-1-210(c), but whether one is really a non-compete in disguise is for counsel. Virginia has a similar low-wage line; see Virginia non-compete law.

Where does the federal FTC rule stand?

It does not apply. The FTC's Noncompete Rule page notes the August 20, 2024 court order; the Commission voted 3-1 on September 5, 2025 to accede to the vacatur; and a February 12, 2026 notice removed it from the Code of Federal Regulations.

Staffing agencies and their own agreements

Many agency recruiters and coordinators earn under $70,000, so a non-compete your firm asks them to sign, renew or amend on or after July 1, 2026 may be void under section 50-1-211, while customer and employee non-solicits sit under section 50-1-210(c). Review your templates with counsel. For the other Tennessee rules on a hire, see the Tennessee staffing agency license guide, Tennessee E-Verify requirements, Tennessee background check laws and the Tennessee recording consent guide.

A Tennessee checklist

• Restrictive-agreement question asked of every candidate, in the same words.
• Signing, renewal and amendment dates recorded against July 1, 2026.
• Pay band captured as above or below $70,000 only when counsel needs it.
• Duration checked against the two-year presumption; area and scope recorded as written.
• Health care roles: license, radius or county, facilities and emergency medicine status noted.
• Client's own offer documents checked for non-competes on sub-$70,000 hires.
• No encouragement to breach; counsel reviews before the offer, given the treble-damages statute.