Bill > HB1034

This bill, effective July 1, 2026, modifies Tennessee law regarding restrictive covenants, commonly known as noncompete agreements, by establishing specific rules for their enforceability and duration. It introduces a "rebuttable presumption" system where courts will generally consider noncompete agreements to be reasonable in duration if they are two years or less for former employees or independent contractors, three years or less for distributors, dealers, franchisees, lessees, or licensees, and five years or less for owners or sellers of a business or its assets. However, these time limits do not apply if the agreement is associated with the sale of a significant portion of a business. The bill also explicitly states that employers can still enforce agreements related to confidentiality, client nonsolicitation, and employee nonsolicitation. Crucially, this bill prohibits employers from requiring, enforcing, or even requesting a noncompete agreement from any employee whose total annual compensation, including wages, salary, commissions, and bonuses, is less than $70,000, with a specific calculation method provided for hourly workers; any noncompete agreement violating this provision will be considered void and unenforceable as a matter of public policy.