Are covenants not to compete enforceable in Tennessee?
Can a court shorten the time period of a non-compete agreement?
In Tennessee, while covenants not to compete are technically"disfavored," generally speaking, they will be enforced by the courts provided that they are "reasonable" under the particular circumstances. Before a court will uphold a non-compete agreement, it will, typically, make sure that the time and territorial limitations of the agreement are no greater than is necessary to protect the party who obtained the agreement.
There are no hard and fast rules that establish when a non-compete agreement is reasonable or unreasonable, and a court will look at the particular facts of each case involving a non-compete agreement to determine the reasonableness of the non-compete agreement. In Tennessee, a court has the power to rewrite a non-compete agreement to reduce the length of time that it is effective. In Tennessee, a court has the power to limit or reduce the geographical area set forth in the agreement. Tennessee courts have reduced either, or both, the time limitation or geographical limitation of non-compete agreements.
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