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ARTICLE · 01 JUNE 2026

Tennessee Changes Its Non-Compete Landscape

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Tennessee is poised to enact significant new limitations on non-compete agreements. The Tennessee General Assembly passed House Bill 1034 (“HB 1034”), introducing two key changes to the law governing...

United StatesEmployment and HR
Shawn Fabian
Shawn Fabian
Umar Sattar
Umar Sattar
Jo Gbujama
Jo Gbujama
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Tennessee is poised to enact significant new limitations on non-compete agreements. The Tennessee General Assembly passed House Bill 1034 (“HB 1034”), introducing two key changes to the law governing restrictive covenants: (i) it establishes statutory rebuttable presumptions for the reasonableness of time restrictions, and (ii) it prohibits non-compete agreements with employees earning less than $70,000 in annualized compensation. Governor Bill Lee signed HB 1034 on May 7, 2026, and the legislation is slated to take effect July 1, 2026. HB 1034 represents a meaningful shift in Tennessee’s approach to non-competes.

Rebuttable Presumptions on Time Restriction

HB 1034 establishes rebuttable presumptions for the reasonableness of time restrictions. For former employees and independent contractors, a restraint of two years or less is presumed reasonable. For distributors, dealers, franchisees, and similar business relationships, a restraint of three years or less is presumed

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