On April 24, 2025, Florida lawmakers passed the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act. The bill, expected to be signed by Governor DeSantis, represents a seismic change to noncompete agreements in Florida. Here is what employers need to know about the CHOICE Act.
The CHOICE Act adds to Florida’s existing noncompete law, which permits the use of restrictive covenants in employment agreements that are reasonable in time, area, and line of business. The Act creates two types of agreements: “covered garden leave agreements” and “covered noncompete agreements” between a “covered employer” and a “covered employee.”
A covered garden leave agreement is an agreement in which an employer agrees to keep an existing employee on the payroll even though the employee is not required to appear at work or render services to the employer. Specifically, the employer and employee agree to a “notice period” (up to 4 years), defined as the time between the employee’s or employer’s notice of intent to terminate the employment relationship through the date of termination. During this notice period, the employee agrees to not resign, and the employer agrees to retain and continue paying the employee the same salary and benefits. The employee may not take any other employment during the notice period without the employer’s permission. Garden leave can be used by employers as a protectionist measure to prevent employees from sabotaging the work environment while they work out their notice period and from taking proprietary information to a competitor.
Under a covered noncompete agreement, an employee agrees to not work for a competitor within a specified geographic area for a set period (not to exceed 4 years) after his or her employment ends. During the noncompete period, the employee agrees to not work for another employer if the employee would be providing services similar to his prior employment or if it would be reasonably likely the employee would use the former employer’s confidential information or customer relationships.
Covered garden leave agreements under the CHOICE Act will be enforceable if:
- The employee is advised, in writing, of the right to seek counsel and given at least 7 days’ notice to review the agreement before signing;
- The employee acknowledges, in writing, receipt of confidential information or customer relationships; and
- The agreement provides that:
- After the first 90 days of the notice period, the employee does not have to provide services to the employer;
- The employee may engage in nonwork activities at any time during the remainder of the notice period;
- The employee may, with the employer’s permission, work for another employer while still employed by the employer during the notice period; and
- The notice period may be reduced during the notice period if the employer provides at least 30 days’ advance notice, in writing, to the employee.
Similarly, covered noncompete agreements under the CHOICE Act will be enforceable if:
- The employee is advised, in writing, of the right to seek counsel and given at least 7 days’ notice to review the agreement before signing;
- The employee acknowledges, in writing, that during the course of their employment, they will receive confidential information or customer relationships; and
- The agreement provides that the noncompete period is reduced day-for-day by any nonworking portion of the notice period, pursuant to a garden leave agreement between the employee and employer.
The CHOICE Act is employer-friendly when it comes to enforcing these agreements – once the employer seeks enforcement, a court is required to issue an order prohibiting the employee from rendering services to any other employer during the notice or noncompete period. The employee, or their new employer, must overcome a high burden in order to modify the court’s order.
Not all employees and employers are covered under the CHOICE Act. A covered employee under the Act is any employee or independent contractor who earns or is expected to earn a salary greater than twice the annual mean wage of the county in Florida in which the employer has its principal place of business, or the county in Florida in which the employees resides. Healthcare practitioners are excluded from the Act.
If signed into law, the CHOICE Act will go into effect July 1, 2025.