Tennessee Court Strikes Down Non-Compete Agreement


In a recent decision, Julian Hinson d/b/a Trivia Time v. Thom O’Rourke, the Tennessee Court of Appeals upheld a trial court’s determination that a post-employment non-compete agreement was unenforceable. Defendant Thom O’Rourke was an independent contractor for plaintiff Trivia Time, an entertainment business providing live trivia games at bars and restaurants in Nashville. Defendant worked for plaintiff for approximately two years. As part of his employment, defendant signed a noncompetition agreement, independent contractor agreement and confidentiality agreement. The noncompete agreement prohibited defendant from “directly or indirectly conducting activity that is competitive with any of the activities [defendant] conducted for Trivia Time” for a period of three years from the date of termination. Upon terminating his association with plaintiff, defendant opened a competing business and provided services to prior clients of plaintiff. Plaintiff sent a cease and desist letter to defendant; however, defendant refused to stop competing with plaintiff. Plaintiff then filed suit for breach of contract and violation […]

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Enforceability of Physician Non-Compete Agreements


I have previously written about the enforceability of non-compete agreements with respect to health care professionals. Non-compete agreements for these professionals implicate certain public policy concerns absent in other industries. Non-compete agreements for physicians and other health care providers pose the unique issue of balancing the interests of patients against a physician’s ability to practice medicine. In a recent case, Amsurg New Port Richey FL, Inc. v. Vangara, No. 2D14-2117, 2015 WL 894322 (Fla. Dist. Ct. App., Mar. 4, 2015), a Florida appellate court examined Tennessee law with respect to the enforceability of a physician non-compete agreement. In this case, Dr. Vangara entered into a joint venture agreement with AmSurg to own and operate a ambulatory surgery center. As part of the agreement, Dr. Vangara agreed to not have any ownership or financial interest in any other ambulatory surgery center or competing business. The agreement was governed by Tennessee law. AmSurg later learned that Dr. Vangara began operating his own competing ambulatory […]

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Tennessee Court of Appeals Weighs in on Validity of Non-Compete Agreement for a Sales Professional


The Wall Street Journal recently published an article regarding the rise in litigation over non-compete agreements. The article reports that litigation over non-competes has risen 60% in the last decade. While non-compete litigation may be on the rise, the courts have not necessarily clarified non-compete law. I have written blog posts about the general enforceability of non-compete agreements in Tennessee, applicability of non-compete agreements to independent contractors and non-compete agreements for healthcare professionals. In each instance, the enforceability of the non-compete agreement almost always depends on the unique circumstances of each case. Because non-compete cases are highly fact-driven, I was excited to see a recent opinion from the Tennessee Court of Appeals, Carson Combs v. Brick Acquisition Company, E2012-02696-COA-R3-CV (Tenn. Ct. App., Oct. 30, 2013), which addresses one of the most common type of non-compete agreements – those applicable to salespersons. In Combs v. Brick Acquisition Company, the dispute began […]

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Health Care Non-Compete Agreements


Introduction As a general rule, courts in Tennessee will enforce non-compete agreements where the restrictions are found to be reasonable. As outlined in my recent blog post, there are a number of factors to consider when determining the reasonableness and enforceability of a non-compete agreement. However, non-compete agreements for health care professionals implicate certain public policy concerns absent in other industries. Non-compete agreements for physicians and other health care professionals pose the unique issue of balancing the interests of patients against a physician’s practice or employer. On one hand, a patient’s freedom to seek treatment with the physician of her choosing and similar ethical concerns lean in favor of finding health care non-compete agreements unenforceable. On the other hand, the sanctity of contract law and the desire to protect a medical practice’s business interests from departing employees support the enforcement of such provisions. The American Medical Association, in its Code of Medical […]

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Tennessee’s Trade Secrets Act


In a recent blog post, I outlined the general principles governing the enforceability of non-compete agreements in Tennessee. Many well-drafted non-compete agreements contain provisions protecting the employer’s confidential or proprietary information by restricting the employee from disclosing such information to others during employment and after the employment relationship ends. Non-compete and non-disclosure agreements, especially for salespeople, often define such confidential information to include customer lists, account information, sales strategy and tactics, and pricing data. Outside the sales context, many agreements protect other important proprietary information of the employer, such as formulas, data, programs, designs and similar intellectual property. Businesses will often seek to enforce non-compete and confidentiality agreements to protect their valuable trade secrets, confidential and proprietary information. Claims for misappropriation of confidential information, interference with contract, and violations of the Tennessee Trade Secrets Act are often made in conjunction with claims for breach of a non-compete, non-disclosure or other […]

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