In Tennessee, a covenant not to compete generally requires that, upon leaving the company, an employee agrees not to be employed by their employer's competitors. A covenant not to compete may also be called a "non-compete clause". An employee who signs a covenant not to compete may receive compensation for the agreement, or in some cases the agreement is a condition for their being hired.
When are Covenants not to Compete Unenforceable?
Whether or not a judge will conclude that the covenant is enforceable can be difficult to know beforehand. Even though the interests of an employer are important, Tennessee courts value a person's freedom to select the type of employment that they desire. Thus, courts will typically uphold only those covenants not to compete that they conclude to be reasonable. Some agreements that courts have considered to be unreasonable include terms that last for an unusually long period of time or that cover a geographic around Farragut that is unreasonably broad.
Limitations on non-compete clauses must also be restricted to cover only competitors who are related in a rational way to the employer's industry. Lastly, the employer must have a valid business interest behind its motivation for mandating a covenant not to compete.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
Since covenants could restrict your rights, you may wish to hire a Farragut, Tennessee lawyer to review any documents. They will be able to negotiate further changes to the covenant, and can draft an entirely new one that is acceptable to all parties if needed. Attorneys can provide valuable counseling to employers who are considering suing an employer who breached a covenant not to compete. They can also assist employees who have signed an agreement limiting their employment options.