U.S. - Tennessee

Non-competition Agreements.

Seminal Case: In Murfreesboro Med. Clinic, P.A. v. Udom, 166 S.W.3d 674, 678 (Tenn. 2005), the Tennessee Supreme Court described the controlling analysis as follows:

  • "In general, covenants not to compete are disfavored in Tennessee. See Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471, 472 (Tenn. 1984). These covenants are viewed as a restraint of trade, and as such, are construed strictly in favor of the employee. Id. However, if there is a legitimate business interest to be protected and the time and territorial limitations are reasonable then non-compete agreements are enforceable. Id. at 473. Factors relevant to whether a covenant is reasonable include: (1) the consideration supporting the covenant; (2) the threatened danger to the employer in the absence of the covenant; (3) the economic hardship imposed on the employee by the covenant; and (4) whether the covenant is inimical to the public interest. Id. at 472-73 (citing Allright Auto Parks, Inc. v. Berry, 219 Tenn. 280, 409 S.W.2d 361, 363 (1966)). Also, the time and territorial limits must be no greater than necessary to protect the business interest of the employer. Allright Auto Parks, 409 S.W.2d at 363.

General Discussions: 

"Non-Compete Agreements" Tenn. Bar Assoc., with most recent citation to a 2009 decision that focuses extensively on (1) what is a legitimate employer interest for enforcement of a non-compete, and (2) "balancing [former employer]’s business interest against the hardship enforcement would impose on the [former employee] and the risk of harm to the public interest."

See Tenn. Noncompete Blog

2011 -- Employer prevails; recovers attorneys' fees: Otter's Chicken Tender, LLC v. Joey Coppage, 2011 Tenn. App. LEXIS 347 (Tenn. App. 2011).