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July 2026 |  Issue 15

Tennessee Adopts New Noncompete Limits

Tennessee has enacted a new statute limiting the use of noncompete agreements. The law took effect July 1, 2026, and applies to non-competes entered into, renewed, or amended on or after that date.

The key change is a new compensation threshold. Employers may not require or enforce a noncompete against an employee whose annualized compensation is less than $70,000. Agreements that violate this requirement are void and unenforceable as a matter of public policy.

The law does not prohibit all restrictive covenants. Employers may still use properly drafted confidentiality agreements, nondisclosure agreements, customer non-solicitation agreements, employee non-solicitation agreements, and trade secret protections.

 Takeaway: Review Tennessee employment agreements. Non-competes should not be used for employees below the compensation threshold, and any restrictive covenant should remain narrowly tailored to protect legitimate business interests, such as confidential pricing, estimating methods, customer relationships, and proprietary business information.

Case Law Update

Recent Supreme Court Decisions Shape Immigration Policy

Temporary Protected Status, Mullin v. Doe, June 25, 2026: The Court held that challengers to DHS’s termination of TPS for Haiti and Syria were not entitled to court orders postponing those terminations while litigation continued. Practical effect: DHS can move forward with ending TPS protections, which affects work authorization and removal protection for covered Haitian and Syrian nationals. The decision may also strengthen DHS’s position in future TPS disputes, although the outcome will depend on the specific designation, administrative record, and procedural posture.

Asylum processing at the border, Mullin v. Al Otro Lado, June 25, 2026: The case addressed whether noncitizens standing in Mexico and seeking access to a U.S. port of entry are entitled to inspection and asylum processing under the INA. The Court held that a person who is still in Mexico has not “arrived in the United States” under the relevant statutory provisions. Practical effect: the ruling gives the executive branch greater authority to control access to asylum processing at ports of entry before a noncitizen enters the United States.

Birthright citizenship, Trump v. Barbara, June 30, 2026: The Court rejected the executive order limiting birthright citizenship. It held that children born in the United States to parents who are unlawfully or temporarily present are “subject to the jurisdiction” of the United States and are citizens at birth under the Fourteenth Amendment. Practical effect: the decision preserves birthright citizenship for children born in the United States, including those born to parents who are unlawfully or temporarily present.

 Takeaway: The Court gave the administration substantial deference on TPS termination and border/asylum processing, but drew a constitutional line at birthright citizenship. In practical terms, the June rulings strengthen executive authority over immigration enforcement and humanitarian relief programs, while reaffirming that citizenship by birth cannot be narrowed by executive order.

Manufacturer Instructions and Warranty Priority Clause

Context: Manufacturer instructions are often overlooked in construction contracts, but they are critical. Many disputes arise when an owner, design professional, consultant, or upstream contractor directs installation in a way that conflicts with manufacturer requirements. This creates risk because the contractor may be blamed for performance problems, while the manufacturer may later deny warranty coverage due to improper installation.

This provision helps protect contractors by making manufacturer requirements a contractual priority. It also creates a process for resolving conflicts before work proceeds. If the design, field directive, or owner preference conflicts with manufacturer instructions or warranty requirements, the issue must be resolved in writing before the contractor is required to proceed.

Sample Provision: Contractor shall perform the Work in accordance with the Contract Documents, applicable codes, approved submittals, and the published installation instructions, specifications, technical bulletins, and warranty requirements of the applicable manufacturer.

If Contractor identifies a conflict between the Contract Documents, field conditions, owner direction, design professional direction, consultant direction, shop drawings, specifications, approved submittals, or any other project requirement and the manufacturer’s published installation instructions, technical requirements, or warranty conditions, Contractor shall provide written notice of the conflict before proceeding with the affected Work, unless immediate action is necessary to protect persons or property.

Upon issuance of such notice, Contractor shall not be required to perform the affected Work in a manner that conflicts with the manufacturer’s requirements unless Contractor receives a written directive signed by Owner or the party with contractual authority to issue such directive. Any such directive shall constitute a change to the Work to the extent it results in additional labor, material, supervision, coordination, delay, resequencing, warranty limitation, loss of manufacturer approval, or increased risk to Contractor.

No review, approval, or acceptance of submittals, shop drawings, product data, mockups, samples, or installed Work shall be deemed to waive the manufacturer’s installation requirements or warranty conditions unless the manufacturer confirms such deviation in writing. Contractor shall not be responsible for loss of warranty coverage, product failure, premature deterioration, water intrusion, incompatibility, aesthetic variation, or performance deficiency arising from any installation method, design detail, material substitution, field directive, or owner preference that conflicts with manufacturer requirements and is performed pursuant to a written directive.

Where the manufacturer’s requirements are more stringent than the Contract Documents, Contractor shall be entitled to an equitable adjustment for any additional cost, time, supervision, material, equipment, coordination, or sequencing required to comply with those requirements, unless such requirements were expressly included in Contractor’s original scope of work.

The recent structural incident at 235 East 42nd Street in Manhattan raises significant construction and legal issues for the parties involved. The building, formerly part of Pfizer’s corporate headquarters, is undergoing a major office-to-residential conversion. Reports indicate that two structural columns buckled around the 21st and 22nd floors, causing sagging in multiple floors and prompting evacuations of nearby buildings. Emergency shoring has been installed, and city officials have stated that the building must undergo further inspection before normal construction activities can resume.

From a legal standpoint, the first issue will be causation. Investigators will need to determine whether the buckling resulted from design error, construction sequencing, overloading, demolition activity, temporary support deficiencies, material issues, improper field modifications, or some combination of those factors. In major adaptive reuse projects, load paths can change dramatically as existing buildings are altered, floors are added, openings are cut, systems are removed, or temporary conditions are created. A failure during construction does not automatically mean that one party is responsible, but it does almost always trigger a detailed review of design documents, structural calculations, inspection records, RFIs, and daily field documentation.

The owner and developer may face claims tied to project oversight, site safety, impact to neighboring properties, business interruption, tenant displacement, and public nuisance. Adjacent property owners and occupants may also pursue damages if they suffered loss of access, lost revenue, relocation expenses, property damage, or other measurable harm. Reports indicate that multiple nearby buildings were evacuated and that some evacuation orders remained in place while stabilization continued.

The general contractor and trade contractors will likely face scrutiny over sequencing, temporary works, demolition procedures, shoring, field supervision, and compliance with approved plans. If the work deviated from the permitted drawings or if temporary construction loads exceeded what the structure could safely carry, that could create exposure. Conversely, contractors may have defenses if they followed the plans, timely identified the issue, stopped work, evacuated, and preserved the site. The fact that workers reportedly noticed cracks and self-evacuated may become important in assessing response and mitigation.

Design professionals may also be examined. In a conversion of this scale, structural engineers must account for existing conditions, altered loads, temporary construction conditions, and the interaction between old and new structural systems. The legal question will not simply be whether a failure occurred, but whether the applicable standard of care was met based on the information available at the time.

Regulatory exposure is also likely. The New York City Department of Buildings will review whether the project complied with permits, safety rules, inspection obligations, and structural requirements before construction resumes. Reuters reported that city officials planned to conduct a thorough safety inspection before allowing work to proceed.

 Takeaway: This incident highlights the unique risk of large-scale office-to-residential conversions. These projects are not ordinary renovations. They require careful structural evaluation, clear responsibility for temporary conditions, strong field documentation, and immediate escalation when existing conditions do not match the design assumptions. For owners, contractors, and design professionals, the most important legal lesson is that adaptive reuse projects need a disciplined process for identifying, documenting, and resolving structural conflicts before construction continues.

Upcoming Speaking Engagements & Events

• ERA Committee and Board Meetings, July 29