Non-Solicitation Agreements in Tennessee: What Employers and Employees Should Know

Non-solicitation agreements are one of the most commonly used restrictive covenants in Nashville’s competitive employment market. While they receive less public attention than non-compete agreements, a non-solicitation agreement in Tennessee can have significant consequences for both employers protecting their customer relationships and employees changing jobs. Understanding the differences between these restrictive covenants and the standards Tennessee courts apply to non-solicitation agreements is critical for anyone involved in a dispute over one.

How Non-Solicitation Agreements Differ From Non-Competes

A non-solicitation agreement restricts a former employee from soliciting the employer’s customers, clients, or other employees after the employment relationship ends. Unlike a non-compete agreement, which broadly prevents an employee from working in a competing business, a non-solicitation agreement allows the employee to work anywhere, including for a direct competitor. The restriction is narrower: the employee simply cannot reach out to the former employer’s customers or recruit its employees.

This distinction matters in Tennessee because courts are generally more willing to enforce non-solicitation agreements than non-competes. Because a non-solicitation agreement is less restrictive on the employee’s ability to earn a living, it is more likely to be found reasonable under the same general framework Tennessee courts apply to all restrictive covenants. The restraint is targeted at protecting specific business relationships rather than broadly preventing competition.

For employers, this makes non-solicitation agreements an attractive alternative or complement to non-compete agreements. For employees, it means that even if a non-compete provision is unenforceable, a companion non-solicitation or non-compete agreement may still be upheld.

Enforceability Standards in Tennessee

Tennessee courts evaluate non-solicitation agreements using the same general reasonableness framework applied to non-competes, but with somewhat more flexibility given the narrower scope of the restriction. The agreement must be supported by adequate consideration, protect a legitimate business interest, and be reasonable in its duration and scope.

Consideration is typically satisfied when the non-solicitation agreement is signed at the beginning of employment. For existing employees, additional consideration such as a promotion, bonus, or continued employment may be required. Tennessee courts have addressed this issue in several decisions, and the sufficiency of consideration can depend on the specific facts.

The legitimate business interest most commonly protected by non-solicitation agreements is the employer’s customer relationships. Tennessee courts recognize that employers invest substantial time and resources in developing customer goodwill, and that a departing employee who takes those relationships to a competitor causes a real and measurable harm. Non-solicitation agreements that also restrict the solicitation of the employer’s other employees protect the business from losing its workforce to a departing colleague.

Duration is an important factor. Tennessee courts have generally upheld non-solicitation periods of one to two years, consistent with the standards applied to non-competes. A three-year or longer restriction may be more difficult to enforce unless the employer can demonstrate an unusual need for extended protection.

Common Pitfalls in Drafting and Enforcement

Many non-solicitation disputes in Nashville arise not from the concept of the restriction but from how the agreement was drafted. Vague or overbroad language is the most common problem. An agreement that prohibits the employee from having any contact with any customer of the employer, including customers the employee never worked with, may be struck down as unreasonable. Tennessee courts prefer restrictions that are tied to the specific customers the employee actually served during a defined period.

Another common issue is the definition of solicitation itself. Does the non-solicitation agreement prevent the employee from reaching out to former customers, or does it also prevent the employee from accepting business from customers who independently seek out the employee? Tennessee courts have grappled with this distinction, and the answer often depends on the specific language of the agreement. A well-drafted agreement will define solicitation clearly and address whether the restriction covers passive acceptance of business from former customers.

Middle Tennessee employers should also be mindful of the overlap between non-solicitation agreements and trade secret protection. Customer lists and customer-specific information may qualify as trade secrets under Tennessee’s Uniform Trade Secrets Act, providing an additional layer of protection beyond the non-solicitation agreement itself.

What to Do When a Dispute Arises

When a non-solicitation dispute arises in Tennessee, both sides should act quickly. For employers, gathering evidence of solicitation early is critical. This may include monitoring customer transitions, reviewing the departing employee’s communications, and interviewing affected customers. For employees, obtaining legal counsel before taking a new position is the best way to avoid inadvertently violating a non-solicitation agreement.

Tennessee courts can grant injunctive relief to enforce non-solicitation agreements, including temporary restraining orders that can be obtained on an emergency basis. The stakes in these proceedings can be high for both sides, making preparation and legal strategy essential from the outset.

If your business is involved in a non-solicitation agreement dispute in Tennessee, I can help. Contact Malloy Law for a confidential consultation.