Tennessee Imposes Minimum Pay Thresholds for Noncompetes
Effective July 1, 2026, the new Tennessee law prohibits employers from requiring, requesting, or enforcing a noncompete agreement against an employee whose annualized compensation is less than $70,000.
The statute defines “annualized compensation” to include “total . . . wages, salary, commissions, nondiscretionary bonuses, and other forms of remuneration, calculated on an annualized basis.” Unlike recently enacted laws in some states, the new Tennessee law does not prohibit employers from requiring hourly employees to sign noncompetes altogether; it merely requires the employee to meet the $70,000 “annualized compensation” threshold “by multiplying the employee’s hourly rate by forty (40) and multiplying the product by fifty-two (52).”
