A federal court ruling on June 24, 2026, raises interesting questions about whether noncompete restrictions impacting Tennessee healthcare providers that are broader than those specified in Tenn Code Ann. § 63-1-148 may be enforceable.
First, a little background: In 2005, the Tennessee Supreme Court ruled that noncompete restrictions inhibiting a physician from competing are void as against Tennessee public policy because they impede patients from selecting the doctor of their choice. See Murfreesboro Med. Clinic P.A. v. Udom, 166 S.W.3d 674 (Tenn. 2005). In response, the Tennessee General Assembly enacted Tenn. Code Ann. § 63-1-148. Effectively overruling Udom, the statute specifies that a healthcare provider noncompete restriction “shall be deemed reasonable” if the temporal restriction is no more than two years and the geographic restriction is the greater of: (a) a 10-mile radius of the provider’s primary practice site; or (b) the county of the provider’s primary practice site.[1]
Although the statute clearly sets forth what is allowed, it is less clear what is disallowed. In other words, if a healthcare provider noncompete restriction is broader than what § 63-1-148 allows, has the legislature signaled that it is per se unreasonable? Or is that something left to the courts to decide?
Judge Aleta Trauger (a judge with the U.S. District Court for the Middle District of Tennessee) addressed that as an issue of first impression in Upperline Healthcare, P.C. v. Hoover, 2026 WL 1823886 (M.D. Tenn. June 24, 2026). There, the defendant podiatrist entered into an agreement preventing her from competing within a 15-mile radius from her practice facility—five miles more than specified in the statute. Rejecting the podiatrist’s argument that this rendered her noncompete restriction per se invalid, the court found that “§ 63-1-148 does not impose an upper limit on reasonability of geographic restrictions in physician covenants not to compete.” The court observed that the statute does not expressly invalidate noncompetes that do not fall within the parameters and noted that “when the Tennessee legislature wants to entirely prohibit restrictions broader than those set forth in a statutory provision, it knows how to do so.” The court also found that the 15-mile radius was reasonable under the circumstances.[2]
Bottom Line for Tennessee Employers
Although employers can rest assured that a healthcare provider noncompete satisfying the limits in Tenn. Code Ann. § 63-1-148 will be deemed reasonable, this ruling will serve as ammunition for employers who may wish to take their chances with broader restrictions. Keep in mind that Judge Trauger’s ruling is not binding on other courts, and therefore, other courts could disagree. The Tennessee Supreme Court is the only court that has ultimate authority of the interpretation of the statute. It is also possible that the General Assembly could amend the statute to make its intent more clear.
A question not directly addressed in Judge Trauger’s ruling is whether, based on the Tennessee Supreme Court’s holding in Udom, a physician noncompete restriction exceeding Tenn. Code Ann. 63-1-148 is void as against public policy. It is debatable whether, in enacting the statute, the legislature (which has ultimate authority to declare Tennessee public policy) intended to signal that Udom’s entire interpretation of public policy was misguided or, instead, whether the statutory allowances serve as an exception to the Udom ruling.
It should also be noted that the Udom ruling was limited to the context of physicians and did not specifically address other types of healthcare providers, such as dentists, nurses, and chiropractors. Tenn Code. Ann. § 63-1-148, nevertheless applies more broadly to “healthcare providers” who are licensed under enumerated statutes. This distinction could lead to colorable legal arguments.
Employers considering broadening noncompete restrictions impacting Tennessee healthcare providers beyond the statutory parameters should confer with legal counsel.
[1] Alternatively, it is acceptable for the agreement to not include a geographic restriction but preclude the provider from practicing at any of the facilities where the employer provided services. Also, emergency physicians are not covered by the statute
[2] The court noted that, if the noncompete had simply specified a county-wide restriction (authorized by statute), it would effectively encompass a 15-mile radius anyway.
