How Are Non-Compete Clauses Enforced in Your State?
Oct. 29, 2025
When someone leaves a job, both the employer and the employee are often concerned about what comes next. For employers, there's the worry that a former worker might take clients, share confidential information, or join a competitor.
For employees, there’s the uncertainty of whether they can take a new opportunity without getting sued. That’s where non-compete clauses come into play.
Non-compete agreements are legal, but they aren’t automatically enforceable. Courts don’t favor restrictions that keep someone from earning a living. At the same time, they recognize a company’s right to protect its business interests. Striking that balance is what makes non-compete clauses such a hot topic in employment and business law across the state.
At McCarter | East PLLC, we help individuals and businesses across Middle Tennessee understand and manage the legal side of employment relationships, including non-compete agreements. We know how confusing and stressful it can be to face restrictions on where or how you work, or to worry about protecting your business when someone leaves.
Whether you're an employer drafting a contract or a worker wondering what you're allowed to do after quitting or being fired, it's important to understand how Tennessee courts treat these agreements. Contact our Murfreesboro employment agreement lawyers for more information.
What’s a Non-Compete Clause?
A non-compete clause, sometimes called a restrictive covenant, is a contract term that limits what a former employee can do after leaving a job. These clauses typically try to prevent a person from working for a direct competitor, starting a competing business, or soliciting the company’s clients or employees.
In Tennessee, non-compete clauses are usually part of:
Employment contracts
Independent contractor agreements
Business sale agreements
The restrictions in these clauses often apply for a set period of time and within a certain geographic area. For example, an employee might be prohibited from working for a competing business within a 50-mile radius for one year after their employment ends.
These agreements are commonly reviewed and interpreted through the lens of business law, which helps courts weigh both competition and fairness in the marketplace.
Are Non-Compete Clauses Enforceable in Tennessee?
Yes, but only if certain requirements are met. Tennessee courts don’t automatically uphold non-compete clauses just because both parties signed them. The court will look closely at the specific terms and the situation involved.
To be enforceable, a non-compete clause must be:
Reasonable in duration and geographic scope
Necessary to protect the employer’s legitimate business interests
Not harmful to the public
Courts in Tennessee take a practical, case-by-case approach. That means the same clause might be enforceable in one situation but not in another.
These principles come directly from Tennessee business law, which sets clear limits on how far employers can go to restrict competition.
What Do Tennessee Courts Consider When Reviewing a Non-Compete?
When a dispute arises over a non-compete clause, the court will weigh several factors to decide whether it should be enforced. The goal is to balance the employer’s interest in protecting its business with the employee’s right to earn a living.
Here are some of the key factors courts consider:
The scope of the restriction: How broad is the non-compete clause in terms of time, geography, and the type of work restricted?
The nature of the job: Did the employee have access to confidential information, specialized training, or key customer relationships?
The reason the employment ended: Was the employee fired, or did they leave voluntarily?
The employer’s business interest: Is there a real risk of harm to the employer if the clause isn’t enforced?
The impact on the public: Would enforcement of the clause limit access to services or cause other harm to the community?
The more tailored and reasonable a clause is, the more likely it’s to be upheld. Overly broad restrictions tend to get struck down, especially when challenged by an attorney familiar with business law.
Legitimate Business Interests That Can Support a Non-Compete
Employers must show that a non-compete clause protects something real—not just a desire to reduce competition. Tennessee courts recognize several types of legitimate business interests that can justify a non-compete agreement:
Trade secrets or confidential business information
Customer relationships developed during employment
Specialized training provided by the employer
Unique business methods or strategies
If an employer can’t point to one of these interests, the court is unlikely to enforce the clause. Just wanting to prevent someone from joining a competitor isn’t enough on its own, and business law in Tennessee reflects that.
Common Pitfalls That Make Non-Competes Unenforceable
Even well-intentioned non-compete clauses can fall apart in court if they’re poorly written or too broad. Here are some common mistakes that can weaken a non-compete agreement:
Overly broad geographic restrictions
Excessive duration
Unclear language
Trying to restrict ordinary competition
Business law doesn’t support contracts that block someone from making a living unless the employer can clearly show why the restriction is necessary.
Tips for Employers Creating a Non-Compete
If you're a Tennessee employer thinking about using a non-compete clause, it's important to approach it carefully. A poorly written or overly aggressive clause might not hold up in court and could damage your relationship with employees.
Here are a few things to keep in mind:
Make the clause specific to the job and the risks involved
Keep restrictions narrow in time and location
Define what counts as a competing business
Consider whether a non-solicitation or confidentiality clause might be more appropriate
Provide something of value in exchange for the agreement
Working with an experienced business law attorney who understands business law can help you avoid costly mistakes and draft agreements that actually stand up in court.
What Employees Should Know Before Signing a Non-Compete
If you’re an employee being asked to sign a non-compete agreement in Tennessee, take your time before signing. These agreements can affect your career long after you leave the job.
Here are a few important things to ask yourself:
What exactly am I restricted from doing?
How long does the restriction last?
Where am I prohibited from working?
Is the clause related to confidential information or special training?
What happens if I violate the agreement?
If you’re unsure, it’s a good idea to speak with a lawyer who focuses on employment and business law before signing.
What Happens if You Break a Non-Compete?
When someone violates a non-compete clause in Tennessee, the employer may respond by taking legal action. This often includes filing a lawsuit and asking the court to stop the former employee from working for a competitor.
Courts can issue an injunction, which is a court order preventing the employee from continuing to violate the clause. If the employer can prove financial harm, they may also seek damages.
Even then, courts won’t enforce a clause they believe is unfair or overly broad. This is why understanding business law principles is important before entering into or challenging a non-compete.
Alternatives to Non-Compete Agreements
Non-compete clauses are just one way employers try to protect their business. In some cases, less restrictive alternatives can offer similar protection without limiting a former employee’s career.
Some common alternatives include:
Non-solicitation agreements
Confidentiality agreements
Non-disclosure agreements (NDAs)
These tools are widely used in business law to safeguard company interests without restricting future employment opportunities too harshly.
Contact Us So You Know Where You Stand Before You Act
Non-compete clauses in Tennessee walk a fine line between protecting business interests and preserving a worker's right to move forward in their career. Whether you're an employer writing one or an employee being asked to sign one, it's worth your time to understand what the courts expect and what rights you actually have.
At McCarter | East PLLC, we work with both employers and employees throughout Middle Tennessee, including Murfreesboro and Woodbury, to help address these kinds of employment and business law matters. Our Murfreesboro office is located just blocks from the courthouse, making it easy for us to stay actively involved in every case.
If you’re dealing with a non-compete agreement—whether you’re enforcing one or fighting one—reach out to us. We’re here to help you make informed decisions and protect what matters most to your business or your career. Contact our office today to schedule a consultation.