Florida’s “CHOICE Act” – Big Changes to Non-Competes and Restrictive Covenants in Florida
On April 24, 2025, the Florida House and Senate passed the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (“CHOICE”) Act. It is expected that Governor Desantis will sign the bill, and the CHOICE Act will go into effect on July 1, 2025.
The CHOICE Act is a dramatic change to non-compete law in Florida. While it appears to exempt some from the new law such as health care practitioners and lower wage earners, it also strengthens the use of the non-competes by business and increases the duration of time a non-compete can last from two to four years. The standards for an employer to enforce a non-compete are reduced. If this bill proceeds it is likely to lead to even more business litigation between companies hiring employees with restrictive covenants and companies seeking to sue former workers for alleged violations.
The CHOICE Act adds to Florida’s current non-compete and restrictive covenant structure by establishing two types of contractual provisions that are governed by separate rules.
Covered Garden Leave Agreement
The first is what the CHOICE Act calls a “Covered Garden Leave Agreement.” This is any provision in a written agreement where an employee and employer agree to a period of advanced notice before termination. During that notice period, the employer will continue to pay the employee their regular salary.
For a covered garden leave agreement to be enforceable, it must be in writing and the employee must be given at least seven days to review the agreement with the opportunity to review with an attorney. The employee must also acknowledge that they will receive confidential information or customer relationships during their employment. There is no requirement that the employee actually receives that information or access to those relationships, only that the employee acknowledges they may during their employment.
Under a covered garden leave agreement, the employee cannot be required to provide services to their employer after 90 days in the notice period, and the employee must be allowed to perform nonwork activities during the notice period. The employee can only work for any other company with the permission of their employer during the remainder of the notice period. The employer also has the right to reduce the notice period if it provides at least 30 days’ advance written notice to the employee.
If an employer believes that their employee has breached this notice provision by leaving their employment early, then their employer can file a lawsuit and automatically receive a court order prohibiting the employee from working for any other company. This court order is mandatory, meaning a judge must issue the court order upon application by the employer.
Importantly, the employer can also request, and the court must issue, an order that prohibits the future employer (including a business, entity or individual) from engaging with the employee in any way during the notice period. Even though the new employer did not sign the employee’s agreement with their prior employer, the new employer will still be bound by its terms and subject it to a court order and financial damages. The new employer will also be required to retain an attorney and incur legal fees to ask the court to set aside this prohibition.
The only way to set aside this court order is for the employee, or their new employer, to show by clear and convincing evidence that the employee is not performing any services during the notice period that are similar to what was provided to their former employer during the 3 years prior to leaving employment or use the confidential information or customer relationships of the employer, or that the new employer is not engage in or planning to engage in any similar business activity of the former employer. The employee can also show that their former employer failed to pay the full salary and benefits provided in their employment agreement during the notice period after an opportunity to cure the failure.
Covered Non-Compete Agreement
The second contractual term covered by the CHOICE Act is a “Covered Non-Compete Agreement.” This is any provision in a written contract that prohibits an employee from providing services similar to the services provided to their employer in any geographic area for a period of up to four years after their employment ends. The prohibition can be up to four years, which extends the current law in Florida from two years. There is also no requirement that the geographic area covered be reasonable.
For a covered noncompete agreement to be enforceable, it must be in writing and the employee must be given at least seven days to review the agreement with the opportunity to review with an attorney. The employee must also acknowledge that they will receive confidential information or customer relationships during their employment. There is no requirement that the employee actually receives that information or access to those relationships, only that the employee acknowledges they may during their employment. In the agreement, the employee agrees not to assume a role with another business, entity or individual in which the employee would provide similar services to those provided to the employer during three years prior to the noncompete period, or in which it is reasonably likely that the employee would use the confidential information or customer relationships of the employer.
The agreement must also provide that any noncompete period is reduced for any nonworking days of a covered garden leave agreement.
If an employer believes that their employee has breached this term, then the employer can file a lawsuit and automatically receive a court order that prohibits the employee from working for their new employer. As with the garden leave provision, the employer can also request a court order against the new employer, which the court must issue.
The court order prohibiting the employee or its new employer is automatic and must be issued by a court without any showing of evidence by the prior employer. The employee, or their new employer, can only set aside this court by producing clear and convincing evidence that the employee will not perform any work similar to the services provided to their former employer or will not use any confidential information or customer relationships. The new employer can also present evidence that it is not engaged in or planning to engage in business activity similar to that engaged in by the employer. And the employee can present evidence that their former employer failed to provide the consideration promised to them in the non-compete agreement. In addition to the injunctive relief, a prevailing former employer is entitled to recover all available monetary damages for all available claims. The new Act also provides that it governs in the case that it is in conflict with any other law.
Are All Florida Workers Covered?
The CHOICE Act does not apply to all workers or businesses in the state of Florida. A covered employee under the CHOICE Act is any employee or independent contractor who earns at least twice the annual mean wage of the county where the employer’s principal place of business is located. If the employer is an out-of-state company, then the employee must earn twice the annual mean wage of the county where the employee resides.
The CHOICE Act also does not apply to healthcare practitioners who are licensed under Florida law.
An employee’s salary includes their base wage, a salary, a professional fee, or other compensation for professional services plus the fair market value of any benefit other than cash. The salary does not include:
- health care benefits,
- severance pay,
- retirement benefits,
- expense reimbursement,
- distribution of earnings or profits not included as compensation for personal services,
- discretionary incentives or awards, or
- anticipated compensation, including tips, bonuses, or commissions.
This does not mean that a non-compete agreement cannot be enforced against anyone who is not covered. If an employment agreement is not covered by the CHOICE Act because the employee is not covered (meaning their salary is below the threshold or they are a healthcare practitioner), then Florida’s current non-compete law applies, Fla. Stat. §542.335. The same is true if the agreement does not contain the language or notice required by the CHOICE Act.
Why is this Happening?
Based on the legislative findings of the CHOICE Act, this appears to be motivated as a response to the Federal Trade Commission (FTC)’s proposed rule in 2024 to invalidate non-compete agreements. The FTC rule found that there are alternative measures to non-compete agreements that companies can take to protect their confidential information and trade secrets. The Florida legislature stated in the CHOICE Act that it finds those alternative means are “inadequate to protect against the significant global risks faced by companies in this state.”
Despite the FTC rule not going into effect, Florida has decided to push forward this measure to strengthen the restrictions on workers from being able to change jobs. The CHOICE Act also allows one company the ability to sue another company based on a contract the second company did not review or sign. This will mean more litigation between companies.
The CHOICE Act will allow larger companies with more resources to stifle the growth of smaller companies. Companies seeking to enforce the CHOICE Act will not be required to prove that another company is actually using any confidential information or customer relationships in order to receive a court order that halts production. The burden will be on the smaller businesses to prove a negative—that they are not using any confidential information or doing similar work—which will be expensive and time consuming. The result could be fewer economic opportunities for small businesses and an end to entrepreneurism in Florida for individuals who try to form new businesses.
If you have any specific questions or concerns about an issue related to a non-compete agreement, contact our Florida Employment Lawyer for help.
