Tennessee Code Title 50. Employer and Employee § 50-1-210

Current as of January 02, 2024 | Updated by Findlaw Staff

(a) In determining the reasonableness in time of a restrictive covenant sought to be enforced after the termination of an employment or business relationship, a court shall apply the rebuttable presumptions established in this section. A court shall presume that a time restraint greater than the applicable restraint described in subdivision (b)(1), (b)(2), or (b)(3) is unreasonable.

(b)(1) A court shall presume to be reasonable in time a restraint sought to be enforced against a former employee or independent contractor that:

(A) Is two (2) years or less in duration, measured from the date the employment or business relationship terminates; and

(B) Is not associated with the sale or ownership of all or a material part of:

(i) The assets of a business, professional practice, or other commercial enterprise;

(ii) The shares of a corporation;

(iii) A partnership interest;

(iv) A membership interest in a limited liability company; or

(v) Any other equity interest or right to receive profits in a business, professional practice, or other commercial enterprise.

(2) A court shall presume to be reasonable in time a restraint three (3) years or less in duration, measured from the date of termination of the business relationship in the case of a restrictive covenant sought to be enforced against a current or former distributor, dealer, franchisee, lessee of real or personal property, or licensee of a trademark, trade dress, or service mark, and not associated with the sale of all or a material part of:

(A) The assets of a business, professional practice, or other commercial enterprise;

(B) The shares of a corporation;

(D) A membership interest in a limited liability company; or

(E) Any other equity interest or right to receive profits in a business, professional practice, or other commercial enterprise.

(3) A court shall presume to be reasonable in time a restraint that is the longer of five (5) years or less, or a period equal to the time during which payments are made to the owner or seller, in the case of a restrictive covenant sought to be enforced against the owner or seller of all or a material part of:

(A) The assets of a business, professional practice, or other commercial enterprise;

(B) The shares of a corporation;

(D) A membership interest in a limited liability company; or

(E) Any other equity interest or right to receive profits in a business, professional practice, or other commercial enterprise.

(1) A confidentiality or nondisclosure agreement;

(2) A client or customer nonsolicitation agreement; or

(3) An employee nonsolicitation agreement.

(d) A court may modify a restrictive covenant governed by this section to render it reasonable and enforceable.

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Cite this article: FindLaw.com - Tennessee Code Title 50. Employer and Employee § 50-1-210 - last updated January 02, 2024 | https://codes.findlaw.com/tn/title-50-employer-and-employee/tn-code-sect-50-1-210/

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