In Tennessee, a covenant not to compete typically 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 them either does so as a condition to employment or they may receive compensation for the agreement.
When are Covenants not to Compete Unenforceable?
Whether a given judge will enforce a non-compete agreement is difficult to know in advance. Although the interests of employers are important, courts in Tennessee also give priority to an employee's freedom to choose the type of employment that they desire. As a result, courts usually uphold only those covenants that are consider to be reasonable according to the circumstances. Covenants not to compete that a court will categorize as unreasonable include provisions that last for a long duration or that restrict the employee to an unreasonable geographic area around Lenoir City.
Covenants must also be limited to restricting dealings with those competitors that are rationally related to the employer's industry. Finally, the covenant not to compete must have a legitimate business purpose which is behind the employer's motivation for requiring the agreement.
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 Lenoir City, Tennessee lawyer to review any agreements. 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. A lawyer can also render useful advice for employers who are considering suing an employee for breach of covenant, or they can counsel employees who have signed such an agreement.