Employee Restrictive Covenant Agreement
Cover Terms
The terms below are incorporated into and form part of this agreement.
| Employer | [Legal name of the entity that employs the employee] | ||||||||
| Employee | [Full legal name of the employee] | ||||||||
| Employee Title / Position | |||||||||
| Effective Date | [Effective date of this agreement — the date the last party signs. It anchors the duration presumptions stated in Cover Terms.] | ||||||||
| Governing Law | Tennessee | ||||||||
| Confidentiality | |||||||||
| Trade Secrets Duration | Perpetual | ||||||||
| Other Confidential Information Duration | 24 months | ||||||||
| Employee Non-Solicitation | |||||||||
| Duration | 24 monthsMarket benchmark HideShow
Why this selected default?Why is this the selected default?24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; 12 months is the common lighter alternative. The Act sets no express duration presumption for the no-hire category, so the uniquely-essential scope limit does the primary category work; counsel should size the term to the workforce interest actually protected. Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing. See all 3 examples in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark → | ||||||||
| Customer Non-Solicitation | |||||||||
| Duration | 12 monthsState-law basis 12 monthsReference only — not part of this agreement. 12 months sits well inside the presumptively reasonable window for a current-customer non-solicit: eighteen months, or for as long as post-separation consideration is paid, whichever is greater. Counsel may extend toward eighteen months, or longer while post-separation consideration is paid, where the interest supports it. | ||||||||
| No Business with Covered Customers | |||||||||
| Duration | 12 monthsState-law basis 12 monthsReference only — not part of this agreement. 12 months sits within the current-customer window. Because non-dealing has no category of its own, it is drawn to fit inside the current-customer non-solicit exception, and its duration tracks that category's presumption. | ||||||||
| Non-Investment | |||||||||
| Duration | 12 months | ||||||||
| Non-Disparagement | |||||||||
| Duration | 24 months |
Standard Terms
1. Defined Terms
“Competitive Business” means the business activities described in Cover Terms under Competitive Business.
“Confidential Information” means non-public information relating to Employer's business, including trade secrets, customer lists, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee and excluding the general knowledge, skill, and experience Employee acquired during employment.
“Covered Customers” means customers, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.
“Covered Employees” means employees with whom Employee worked or whom Employee managed during the 12 months before termination of employment.
“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.
“Protected Interests” means Employer's Confidential Information, Trade Secrets, investment in special training provided to Employee, and customer relationships developed by Employee on Employer's behalf.
“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.
“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.
“Solicit” means to directly or indirectly contact, approach, induce, encourage, or provide Confidential Information to any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or unsolicited inquiries not initiated by Employee.
“Trade Secrets” means information qualifying as a trade secret under applicable law.
2. Recitals and Protectable Interests
Employer and Employee acknowledge that each restrictive covenant in this agreement protects one or more of Employer's Protected Interests, including its Confidential Information and trade secrets, its investment in special training, and its customer relationships in which Employee is the face of the business. Employer would not provide Employee with access to these Protected Interests absent the protections in this agreement. Employer and Employee acknowledge that the covenants are reasonable in time, territory, and scope.
Drafting Note The special-facts threshold and the reasonableness factors
A Tennessee covenant not to compete is a disfavored restraint of trade that a court enforces only when reasonableness is established, so acknowledgments of reasonableness in the agreement do not carry the covenant on their own. The threshold question comes before the balancing: an employer cannot restrain ordinary competition, and only special facts over and above ordinary competition — confidential information or trade secrets, an investment in special training, or customer relationships in which the employee is the face of the business — support the restraint at all . Once a protectable interest exists, the covenant stands or falls on whether its time and territory are greater than required to protect that interest, weighed against the consideration, the threatened danger to the employer, the hardship on the employee, and the public interest — a covenant reaching further than the proven interest is exposed on the element that reaches too far .
3. Timing, Consideration, and Employee Acknowledgements
If this agreement is signed at the outset of employment, the offer and commencement of employment is the consideration. If Employee signs after hire, Employer will provide the consideration stated in Cover Terms. Employer has given Employee the opportunity to consult with independent legal counsel before signing this agreement. Employee acknowledges that the restrictions protect Employer's Protected Interests. This agreement is effective as of the Effective Date listed in Cover Terms.
Drafting Note Continued employment as consideration
A covenant an existing Tennessee employee signs after hire is supported when the employee then remains employed for an appreciable length of time; the length of the continued employment is what supplies the consideration, so a covenant paired with only a brief tenure after signing is on weaker ground . Adequate consideration establishes only that a covenant is supported, not that it is reasonable, so a covenant that clears the consideration question still has to satisfy the protectable-interest, time, territory, and scope limits on its own; where continued employment is brief, separate consideration identified in the agreement removes the doubt .
4. Confidential Information and Trade Secret Protection
Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding trade secrets continue in perpetuity, for as long as the information remains a trade secret. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms. This confidentiality obligation is intended to operate alongside, and independent of, any restrictive covenant, and does not restrict Employee's use of the general knowledge, skill, and experience Employee acquired during employment.
5. Permitted Disclosures and Protected Conduct
Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law, including Section 7 of the National Labor Relations Act (29 U.S.C. § 157); (d) testifying truthfully in legal proceedings; or (e) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.
6. Return, Deletion, and Certification of Company Property
Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request.
7. Non-Solicitation of Employees
During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees. This covenant reaches only Covered Employees whom the departing Employee actually worked with or managed and does not operate as a workforce-wide hiring ban.
8. Non-Solicitation of Customers, Vendors, Referral Sources, and Business Partners
During the Restricted Period, Employee must not Solicit the business of any Covered Customer.
Drafting Note Preserved covenants operating as de facto non-competes
The 2026 statute preserves a confidentiality or nondisclosure agreement, a customer non-solicitation agreement, and an employee non-solicitation agreement from its non-compete rules, so a covenant tied to genuine confidential information, customers, or employees sits outside the time presumptions and the $70,000 threshold; together with the trade-secret protections, a customer non-solicit is often a more readily enforceable protection than a broad non-compete . That shelter depends on the covenant staying within its category: a non-solicitation or confidentiality clause drawn so broadly that it bars the worker from competing at all reads as a disguised non-compete and draws the same reasonableness scrutiny — and, for a below-threshold employee, the same voidness risk — as an express non-compete. A no-dealing covenant is not on the preserved list at all, so a court may test it under the disfavored-restraint framework rather than the carve-out, and a clock kept independently per covenant makes clear which covenants answer to the statute and which do not .
9. No Business with Covered Customers
During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact.
10. Non-Investment
During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. The same objective exclusions as the Non-Competition section apply to this restriction. Passive Public Holdings are permitted.
11. Non-Disparagement
During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, or exercising rights protected by law, including rights protected under Section 7 of the National Labor Relations Act.
12. Physician and Health Care Provider Covenants
If Employee provides licensed health-care services, any covenant restricting Employee's practice lasts no more than two years and applies only within the greater of a ten-mile radius from Employee's primary practice site or the county where that site is located. No non-compete restricts Employee's practice of emergency medicine.
Drafting Note The health-care-provider safe harbor and its limits
For a provider licensed under the listed chapters of Title 63, a covenant deemed reasonable is one in writing, running two years or less, and within the greater of a ten-mile radius from the primary practice site or the county in which it sits; a covenant tied to the purchase or sale of the practice carries a rebuttable presumption that its agreed duration and area are reasonable . Meeting the safe harbor deems the covenant reasonable in time and area only — the protectable-interest requirement and the other common-law limits still apply, so a safe-harbor-compliant covenant untethered to a legitimate interest still fails. The safe harbor does not reach a physician who specializes in emergency medicine: no statute then authorizes the covenant, so it remains void, the same result the threshold section reaches for that physician .
13. No Conflicting Obligations
Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment.
14. Notice to Future Employers and Other Third Parties
Employer may disclose the existence and terms of obligations then in effect under this agreement to any prospective employer or business associate of Employee if Employer has a reasonable belief that Employee may breach those obligations. Employee consents to this disclosure.
15. Tolling During Breach
If Employee breaches any restrictive covenant in this agreement, the Restricted Period for that covenant is extended by one day for each day of the breach, subject to applicable law.
16. Remedies
Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other equitable relief in addition to any other remedies available at law. Each party bears its own attorney's fees unless this agreement expressly provides otherwise.
17. Enforceability and Severability
If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect.
18. Survival and Expiration of Each Covenant
Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. Obligations under the Confidential Information and Trade Secret Protection section survive for the Trade Secrets Duration specified in Cover Terms to the extent they relate to trade secrets, and for the Other Confidential Information Duration specified in Cover Terms for other Confidential Information. All other provisions survive to the extent necessary to enforce rights that arose during employment. Each covenant's Restricted Period runs independently of the others.
19. Assignment and Successors
Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.
20. Governing Law, Venue, and Dispute Process
This agreement is governed by the law listed in Cover Terms. Tennessee law governs to the extent required by non-waivable law. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law.
Drafting Note A good-faith basis for an out-of-state choice of law
A Tennessee court honors a contractual choice of another state's law only when certain requirements are met, beginning with good-faith execution and a genuine connection between the chosen state and the parties . A clause picking a state with no real connection, or one deployed to escape Tennessee's protections — including the $70,000 bar — is vulnerable, so a covenant with a Tennessee worker that leans on foreign law to survive is exposed if that choice cannot be defended as genuine; governing-law and venue that track where the worker actually lives and works leave the covenant measured against the law it was drafted for .
21. Entire Agreement, Amendment, Waiver, and Electronic Signatures
This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. This agreement may be amended only in writing signed by both parties. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.
Signatures
By signing this agreement, each party acknowledges and agrees to the restrictive covenant obligations above. Employee confirms having read and understood each provision, including the Cover Terms.
Employer
Employer: [Legal name of the entity that employs the employee]
Signature:
Signatory Name: [Full name of the authorized signatory signing for the employer]
Title: [Title of the authorized signatory signing for the employer]
Date:
Employee
Signature:
Print Name: [Full legal name of the employee]
Date: