Tennessee Bans Noncompetes for Workers Who Make Under $70,000

Tennessee will ban employee noncompetes for workers earning less than $70,000 annually, or the hourly equivalent, under legislation that Gov. Bill Lee (R) signed into law.

The measure (HB 1034) applies the new income-based restriction to noncompetes signed or renewed on or after July 1, 2026, following Lee’s signature on Thursday. It also instructs courts to treat two years as a reasonable amount of time to block a former employee from working for a competitor when there’s no sale of a business involved, and empowers judges to modify the agreements to make them reasonable and enforceable.

The Republican-majority legislature’s adoption of an income threshold for noncompetes puts Tennessee in the company of at least 10 other states, mostly with Democratic-majority legislatures, expanding the somewhat bipartisan nature of policies promoting workers’ career mobility.

Apart from a Florida law adopted in 2025, state lawmakers across the US have steadily advanced stricter limits on the use of noncompetes for roughly a decade, including Washington state’s enactment of a near-total ban this year. Federal regulators have shifted their focus to selective enforcement against overly broad noncompetes after abandoning a Biden administration proposal to ban them nationwide.