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HB1034 • 2026

Contracts

AN ACT to amend Tennessee Code Annotated, Title 50; Title 63 and Title 68, relative to covenants not to compete.

Healthcare Labor
Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor
Alexander, Bailey
Last action
2026-04-09
Official status
H. Placed on Regular Calendar for 4/13/2026
Effective date
Not listed

Plain English Breakdown

The bill text does not provide details on what happens to existing noncompete agreements before July 1, 2025.

Declaring Noncompete Agreements Unenforceable for Healthcare Workers

This bill declares noncompete agreements unenforceable for healthcare workers in Tennessee, with exceptions for certain physician buyouts.

What This Bill Does

  • Makes it illegal to enforce any agreement that stops a worker from practicing their profession after leaving a job or contract.
  • Removes specific sections of the law that allowed certain restrictions on healthcare providers.
  • Adds new rules about when noncompete agreements can be enforced, like if an employer buys a doctor's practice in good faith.

Who It Names or Affects

  • Healthcare workers who sign contracts with employers or clients.
  • Employers who make agreements with healthcare providers.

Terms To Know

Noncompete agreement
A contract that stops someone from working in the same field after leaving a job or ending a contract.
Healthcare provider
Someone who gives medical care, like doctors, dentists, and psychologists.

Limits and Unknowns

  • The bill does not specify what happens to existing noncompete agreements before the effective date.
  • It is unclear how this will affect healthcare providers in specific situations that are not covered by the exceptions.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

Amendment 1-0 to HB1034

Plain English: The amendment adds new sections to Tennessee law regarding restrictive covenants, including a presumption of reasonableness for certain time periods and a prohibition on noncompete agreements for employees earning less than $70,000 annually.

  • Adds a rebuttable presumption that restrictive covenants lasting two years or less are reasonable when enforced against former employees who were not selling business assets.
  • Establishes a three-year time limit as presumptively reasonable for certain distributors and franchisees.
  • Sets a five-year period, or the duration of payments to an owner or seller, as presumptively reasonable in cases involving the sale of significant business interests.
  • Prohibits employers from requiring noncompete agreements for employees earning less than $70,000 annually.
  • The amendment text does not specify all potential impacts on existing contracts or legal interpretations.
Amendment 2-0 to HB1034

Plain English: The amendment adds new sections to Tennessee law regarding restrictive covenants in employment contracts, setting limits on how long such restrictions can last based on the type of employee and business relationship.

  • Adds a presumption that noncompete agreements lasting more than two years for regular employees are unreasonable unless proven otherwise by the employer.
  • Establishes presumptions about reasonableness for different types of restrictive covenants, such as those involving distributors or franchisees, with limits up to three years.
  • Sets a five-year limit on restrictive covenants related to the sale of business assets and prohibits noncompete agreements for employees earning less than $70,000 annually.
  • The amendment text does not specify how courts should handle cases where an agreement falls between these limits or if there are exceptions.
  • It is unclear from the provided text what happens to existing noncompete agreements that do not comply with the new rules.
Amendment 1-0 to SB0995

Plain English: The amendment adds new sections to Tennessee law regarding restrictive covenants in employment contracts, setting limits on how long such restrictions can last based on the type of employee or business relationship and prohibiting noncompete agreements for employees earning less than $70,000 annually.

  • Adds a presumption that restrictive covenants lasting two years or less are reasonable for most former employees and independent contractors.
  • Establishes a three-year limit for certain distributors, dealers, franchisees, lessees of property, and licensees under specific conditions.
  • Sets a five-year limit for restrictive covenants involving the sale of business assets or equity interests, with an option to extend based on payment periods.
  • Prohibits employers from requiring noncompete agreements for employees earning less than $70,000 annually.
  • The amendment text does not specify all potential exceptions or modifications that courts may apply when enforcing restrictive covenants.

Bill History

  1. 2026-04-09 Tennessee General Assembly

    H. Placed on Regular Calendar for 4/13/2026

  2. 2026-04-09 Tennessee General Assembly

    Placed on cal. Calendar & Rules Committee for 4/9/2026

  3. 2026-04-07 Tennessee General Assembly

    Recommended for passage with amendment/s, refer to Senate Calendar Committee Ayes 6, Nays 3 PNV 0

  4. 2026-04-01 Tennessee General Assembly

    Placed on Senate Commerce and Labor Committee calendar for 4/7/2026

  5. 2026-03-26 Tennessee General Assembly

    Reset on Final cal. 2 of Calendar & Rules Committee

  6. 2026-03-25 Tennessee General Assembly

    Placed on cal. Calendar & Rules Committee for 3/26/2026

  7. 2026-03-24 Tennessee General Assembly

    Rec. for pass; ref to Calendar & Rules Committee

  8. 2026-03-18 Tennessee General Assembly

    Placed on cal. Health Committee for 3/24/2026

  9. 2026-03-17 Tennessee General Assembly

    Action def. in Health Committee to 3/24/2026

  10. 2026-03-11 Tennessee General Assembly

    Placed on cal. Health Committee for 3/17/2026

  11. 2026-03-10 Tennessee General Assembly

    No Action Taken

  12. 2026-03-10 Tennessee General Assembly

    Action deferred in Senate Commerce and Labor Committee to 3/17/2026

  13. 2026-03-04 Tennessee General Assembly

    Placed on cal. Health Committee for 3/10/2026

  14. 2026-03-04 Tennessee General Assembly

    Rec. for pass. if am., ref. to Health Committee

  15. 2026-03-04 Tennessee General Assembly

    Placed on Senate Commerce and Labor Committee calendar for 3/10/2026

  16. 2026-03-03 Tennessee General Assembly

    Action deferred in Senate Commerce and Labor Committee to 3/10/2026

  17. 2026-02-25 Tennessee General Assembly

    Placed on cal. Commerce Committee for 3/4/2026

  18. 2026-02-24 Tennessee General Assembly

    Placed on Senate Commerce and Labor Committee calendar for 3/3/2026

  19. 2026-02-11 Tennessee General Assembly

    Action def. in Commerce Committee to 2/25/2026

  20. 2026-02-04 Tennessee General Assembly

    Placed on cal. Commerce Committee for 2/11/2026

  21. 2026-02-04 Tennessee General Assembly

    Rec for pass if am by s/c ref. to Commerce Committee

  22. 2026-02-04 Tennessee General Assembly

    Sponsor(s) Added.

  23. 2026-01-28 Tennessee General Assembly

    Placed on s/c cal Banking & Consumer Affairs Subcommittee for 2/4/2026

  24. 2026-01-26 Tennessee General Assembly

    Meeting Canceled

  25. 2026-01-21 Tennessee General Assembly

    Placed on s/c cal Banking & Consumer Affairs Subcommittee for 1/28/2026

  26. 2025-03-25 Tennessee General Assembly

    Assigned to General Subcommittee of Senate Commerce and Labor Committee

  27. 2025-03-19 Tennessee General Assembly

    Action Def. in s/c Banking and Consumer Affairs Subcommittee to Second Calendar of 2026

  28. 2025-03-19 Tennessee General Assembly

    Placed on Senate Commerce and Labor Committee calendar for 3/25/2025

  29. 2025-03-18 Tennessee General Assembly

    Action deferred in Senate Commerce and Labor Committee to 3/25/2025

  30. 2025-03-17 Tennessee General Assembly

    Sponsor(s) Added.

  31. 2025-03-13 Tennessee General Assembly

    Placed on Senate Commerce and Labor Committee calendar for 3/18/2025

  32. 2025-03-12 Tennessee General Assembly

    Placed on s/c cal Banking & Consumer Affairs Subcommittee for 3/19/2025

  33. 2025-03-12 Tennessee General Assembly

    Action Def. in s/c Banking and Consumer Affairs Subcommittee to 3/19/2025

  34. 2025-03-11 Tennessee General Assembly

    Placed on Senate Commerce and Labor Committee calendar for 3/18/2025

  35. 2025-03-05 Tennessee General Assembly

    Placed on s/c cal Banking & Consumer Affairs Subcommittee for 3/12/2025

  36. 2025-02-12 Tennessee General Assembly

    Passed on Second Consideration, refer to Senate Commerce and Labor Committee

  37. 2025-02-11 Tennessee General Assembly

    Assigned to s/c Banking & Consumer Affairs Subcommittee

  38. 2025-02-10 Tennessee General Assembly

    P2C, ref. to Commerce Committee - Health Committee

  39. 2025-02-10 Tennessee General Assembly

    Introduced, Passed on First Consideration

  40. 2025-02-06 Tennessee General Assembly

    Intro., P1C.

  41. 2025-02-05 Tennessee General Assembly

    Filed for introduction

  42. 2025-02-05 Tennessee General Assembly

    Filed for introduction

Official Summary Text

Present law provides that a
restriction on the right of an employed or contracted healthcare provider to practice the healthcare provider's profession upon termination or conclusion of the employment or contractua
l relationship
(a "noncompete" agreement) is
reasonable if:

(1) The restriction is set forth in an employment agreement or other written document signed by the healthcare provider and the employing or contracting entity;
and

(2) The duration of the re
striction is two years or less and either:

(A) The maximum allowable geographic restriction is the greater of
a

10
-mile radius from the primary practice site
o
r
th
e county
where
the primary practice
i
s located; or

(B) There is no geographic restriction
, but the healthcare provider is restricted from practicing the healthcare provider's profession at any facility at which the employing or contracting entity provided services while the healthcare provider was employed or contracted with the employing or
c
ontracting entity.

The healthcare providers to whom the requirements for a noncompete agreement apply under present law are podiatrists, chiropractors, dentists, medical physicians, osteopathic physicians, and psychologists.

This bill declares void and
unenforceable
a restriction on the right of an
y
employee or contractor to practice the employee's or contractor's profession upon termination or conclusion of the employment or contractual relationship
,

except in cases of
physicians from whom the employin
g entity has made a bona fide purchase of the physician's practice
and further provided that any such agreement must meet the reasonable time and distance limits and contain a buy-back option.

Current Bill Text

Read the full stored bill text 
SENATE BILL 995
By Bailey

HOUSE BILL 1034
By Alexander

HB1034
002990
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 50;
Title 63 and Title 68, relative to covenants not to
compete.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 50, Chapter 1, Part 2, is amended by
adding the following as a new section:
Except as otherwise provided in § 63-6-204(f)(2), a restriction on the right of an
employee or contractor to practice the employee's or contractor's profession upon
termination or conclusion of the employment or contractual relationship is void and
unenforceable in this state.
SECTION 2. Tennessee Code Annotated, Section 63-1-148, is amended by deleting the
section.
SECTION 3. Tennessee Code Annotated, Section 63-6-204(f)(2)(B), is amended by
deleting ", except as allowed by § 63-1-148 or any successor section".
SECTION 4. Tennessee Code Annotated, Section 63-6-204(g)(2), is amended by
deleting ", except as allowed by § 63-1-148 or any successor section".
SECTION 5. Tennessee Code Annotated, Section 63-6-204(g)(3), is amended by
deleting "Notwithstanding § 63-1-148 or any successor section, in" and substituting instead "In".
SECTION 6. Tennessee Code Annotated, Section 68-11-205(c)(2), is amended by
deleting ", except as allowed by § 63-1-148 or any successor section".
SECTION 7. Tennessee Code Annotated, Section 68-11-205(c)(3), is amended by
deleting "Notwithstanding § 63-1-148 or any successor section, in" and substituting instead "In".

- 2 - 002990

SECTION 8. Tennessee Code Annotated, Section 68-11-205(f)(2), is amended by
deleting "; provided, such restriction complies with 63-1-148".
SECTION 9. This act takes effect July 1, 2025, the public welfare requiring it, and
applies to contracts entered into or amended on or after that date.