Overview
- Governor Bill Lee signed House Bill 1034 on May 7, 2026, creating a statutory ban on noncompetition clauses for workers whose annualized pay is under $70,000.
- The ban applies to noncompete agreements entered into, renewed, or amended on or after July 1, 2026 and makes such covenants void and unenforceable for covered workers.
- The statute defines annualized compensation to include wages, salary, commissions and nondiscretionary bonuses and sets hourly pay at hourly rate × 40 × 52 for the threshold calculation.
- HB1034 establishes rebuttable presumptions of reasonable durations — two years for employees and independent contractors, three years for distributors and franchisees, and five years or the payment period for business sellers — and authorizes courts to modify overbroad terms to make them enforceable.
- The law covers both employees and independent contractors, preserves confidentiality and nonsolicitation tools and leaves separate healthcare noncompete limits in place; employers should identify affected workers and revise templates before the July 1 effective date.