Enforceability of Tennessee Covenants Not to Compete
Covenants not to compete are disfavored in Tennessee, but are strictly enforceable if certain elements are met. The issue of enforceability comes up enough that it’s a good rule of thumb to have these elements handy. They require that:
(a.) there is a legitimate business interest to be protected; and
(b.) the time and territorial limitations in the covenant are reasonable.
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;
(4) whether the covenant is inimical to the public interest;
(5) that the time and territorial limits must be no greater than necessary
See Murfreesboro Medical Clinic, P.A. v. Udom, 166 S.W.3d 674, 678 (Tenn. 2005).