Tennessee Senate Bill SB0995

Tennessee 2025-2026 Regular Session

• Introduced: 2/5/25

Caption

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

Summary

SB0995 would substantially limit the use of covenants not to compete in Tennessee. The bill adds a new provision to Title 50 declaring that, except as otherwise provided in a narrow medical-practice exception, any restriction on an employee’s or contractor’s right to practice their profession after the employment or contractual relationship ends is void and unenforceable in Tennessee. In practical terms, the bill would bar most post-employment noncompete agreements for workers and independent contractors. The bill also repeals Tennessee Code Annotated § 63-1-148 and removes or revises several cross-references in Titles 63 and 68 that currently preserve noncompete restrictions in certain health-care settings. It preserves limited exceptions already embedded in those health-care statutes, but otherwise aligns those provisions with the broader ban. The act would take effect July 1, 2025, and would apply only to contracts entered into or amended on or after that date.

Impact

The bill would change Tennessee law by making most noncompete clauses unenforceable for employees and contractors, while also deleting a separate statutory section and conforming related provisions in the medical and health-care licensing statutes. It would affect employers, contractors, and professionals who currently rely on post-employment restrictive covenants, and it would likely reduce the ability of businesses to prevent workers from moving to competitors or starting similar practices. Existing contracts would not be affected unless amended on or after the effective date.

Sentiment

The available voting history suggests the bill had meaningful support but also notable opposition. The Senate Commerce and Labor Committee recommended passage with amendments by a 6-3 vote, indicating a favorable overall committee sentiment while still reflecting division. No transcript excerpts were provided, so the record does not show detailed floor or committee arguments, but the vote pattern suggests the bill was viewed positively by a majority and more cautiously by a minority.

Contention

The main point of contention is the scope of the ban on noncompete agreements and whether Tennessee should eliminate these restrictions broadly or preserve them for certain professions and health-care arrangements. Supporters likely view the bill as protecting worker mobility, professional freedom, and competition, while opponents likely worry about reduced employer protection, retention of specialized employees, and the impact on medical or professional practices that use restrictive covenants. The amendments to Titles 63 and 68 indicate that health-care-related exceptions were a particular focus of the debate.