Memphis Tennessee Noncompete Agreements Lawyer

In Tennessee, restrictive employment covenants are enforceable if they are reasonable under the particular circumstances. The law in Tennessee is clear that the enforceability of restrictive employment covenants rests upon the law and public policy of the state in which the enforcement is sought.

"Reasonableness" has several components, requiring both temporal and geographic reasonableness in the restrictions and that the restrictions are no more than necessary to protect a legitimate interest of the employer.

Geographic and temporal reasonableness, requires that the restriction be only so broad as necessary to protect the employer's interests against unfair competition. There are no hard and fast rules as to what is reasonable - one must look at the business, what the employee was doing, the nature of the competition, the existence of trade secrets, and similar factors in drafting limitations which are not overreaching.

Tennessee courts have generally upheld three-year periods (or temporal scopes) as being reasonable. However, in some instances as short as two years is seen as too long a period.  Typically this sort of temporal limitation will be based on the nature of the business, the duties of the employee, how long it will take to effectively replace the employee and the needs of the employer.

With respect to the geographic scope, courts may uphold covenants of national scope, but this is pretty rare.  If the employer has a legitimate interest in prohibiting nationwide competition it requires the employer to show that the scope of the employee's duties are such that the employee covers the entire nation.  This may be the case for a national employer with an employee who works on a national level, but with anything less it is unlikely that a broad geographic scope would be supported.  For most employees, the likely scope is significantly less and is usually limited to the area in which the employee actually performed services.

When considering the interest of the employer, Tennessee courts have looked to the reasoning behind the parties entering into the noncompetition agreement.  The first question is what did the employee do for the employer?  As an example, if the employee was a salesperson or was the "face of the employer" it is more likely that a court would find the employer has a legitimate interest to protect.  Also, if the employee had some specialized knowledge of how the employer performed some unique process or something that was unique about the employer and gave the employer a competitive advantage, tose things are typically protected.  However, many employers try to protect more mundane interests, even knowledge which the employee brought into the workplace or nonunique knowledge which the employee gathered as part of the employee's work.  Most often this sort of information is not a protectible interest.  This means that the noncompete agreement is not likely to be upheld.

In each case, noncompete agreements are very serious matters that are examined on a case-by-case basis. Often, whether there is an enforceable noncompete agreement depends on a very thorough examination of the facts of the case.  This is why if you are uncertain about your noncompete rights, have been sued by a former employer, threatened with litigation or you are an employer trying to protect something in your workplace, you should consult with an experience noncompete attorney.  To arrange a consultation to discuss your noncompete agreement, contact Memphis attorney James Becker.

Attorney James Becker

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Becker Law Firm • 5100 Poplar Ave Ste 2606 • Memphis, TN 38137 • Phone: 901.881.6205
Becker Law Office of Memphis, Tennessee represents clients in the Metro Area and West Tennessee, including Cordova, Germantown, Collierville, Lakeland, Millington, Somerville, Covington, Paris, Nashville, Savannah, Jackson, Union City, Dyersburg, McKenzie and all communities of Shelby County, Fayette County and Tipton County.
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