Tennessee Changes Statute of Limitations Law for Individuals Who Are Incapacitated or Incompetent.

Tennessee law has long provided that individuals who are adjudicated incompetent at the time the cause of action accrued, may commence the action after their legal rights are restored within the normal time period for the statute of limitations for that cause of action.  The statute did not provide for the statute of limitations time period to run if they never gained competency.  As a result, essentially, an individual who was incompetent who was permanently incompetent, would not have any statute of limitations for any cause of action until the time they die.

In 2016, the Tennessee legislator fixed this problem by amending the applicable statute, T.C.A. § 28-1-106 in Public Chapter 932.  They added subsection (c)(2) of this statute now provides that any individual who has a court-ordered fiduciary (such as a guardian or conservator) or someone who possesses the legal right to bring suit on behalf of a person who lacks capacity, must commence the action on behalf of that person within the applicable statute of limitations.  The statute provides that the fiduciary may not rely upon any tolling of the statute of limitations unless the individual can establish by “clear and convincing evidence that the individual did not and could not reasonably have known of the accrued cause of action.”

The new statute (T.C.A. § 28-1-106) now provides the following:

(a) If the person entitled to commence an action is, at the time the cause of action accrued, either under eighteen (18) years of age, or adjudicated incompetent, such person, or such person's representatives and privies, as the case may be, may commence the action, after legal rights are restored, within the time of limitation for the particular cause of action, unless it exceeds three (3) years, and in that case within three (3) years from restoration of legal rights.

(b) Persons over the age of eighteen (18) years of age are presumed competent.

(c)(1) If the person entitled to commence an action, at the time the cause of action accrued, lacks capacity, such person or such person's representatives and privies, as the case may be, may commence the action, after removal of such incapacity, within the time of limitation for the particular cause of action, unless it exceeds three (3) years, and in that case within three (3) years from removal of such incapacity, except as provided for in subdivision (c)(2).

(2) Any individual with court-ordered fiduciary responsibility towards a person who lacks capacity, or any individual who possesses the legal right to bring suit on behalf of a person who lacks c...

Legitimate Business Interest Needed to Enforce Tennessee Non-Compete Agreements

The Tennessee Court of Appeals in John Jason Davis v. Johnstone Group Inc. v. Appraisal Services Group, Inc., No. W2015-01884-COA-R3-CV, 2016 WL 908902 (Tenn. Ct. App. 2016) discussed the enforceability of a non-compete agreement and a request for injunctive relief.  The key issues in this case was whether there was a legitimate business protectable business interest that would justify the enforcement of this non-competition agreement.  This case provides a very good overview of Tennessee law on the enforcement of non-competition agreements. 

The Court noted that non-compete agreements are disfavored in Tennessee because they restrain trade (citing Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471 (Tenn. 1984)).  However, the Court found that Tennessee Courts will still uphold agreements if the restrictions are reasonable.  Additionally, the time and territorial of limits of the agreement must be no greater than is necessary to protect the business interests of the employer (citing Matthews v. Barnes, 293 S.W. 1993 (Tenn. 1927)). 

The Court noted that the Tennessee Supreme Court’s analysis in the Hasty opinion is the key case law on the issue of whether a legitimate business interest justifies the enforcement of the non-competition clause.  Specifically, the Tennessee Supreme Court in the Hasty case said as follows:

Of course, any competition by a former employee may well injure the business of the employer. An employer, however, cannot by contract restrain ordinary competition. In order for an employer to be entitled to protection, there must be special facts present over and above ordinary competition. These special facts must be such that without the covenant not to compete the employee would gain an unfair advantage in future competition with the employer.

Hasty, 671 S.W.2d at 473.  As a result, the employer trying to enforce the agreement must show special facts “beyond protection from ordinary competition that would give” the employee...