On April 24, 2025, the Florida legislature passed the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act, which is expected to be signed by Governor DeSantis and go into effect on July 1, 2025.
Overview of the CHOICE Act
Noncompete agreements are currently governed by Fla. Stat.§ 542.335 which requires:
1) a written signed agreement,
2) protection of a legitimate business interest, and
3) reasonable restrictions in duration, geographic scope and scope of business.
Employers bear the burden of proving their noncompete terms are reasonable and necessary.
The CHOICE Act does not amend this law, but instead simplifies enforcement of certain agreements, and shifts the burden to employees. The Act creates a presumption that “covered” non-compete agreements and garden leave agreements are enforceable and do not violate public policy. Additionally, the Act requires courts to issue an injunction unless a former employee or new employer can prove the new employment will not result in unfair competition.
Who is covered by the CHOICE Act?
The Act does not apply to all workers or businesses in Florida. It applies only to employees or independent contractors who earn at least twice the annual mean wage of the county where the principal place of business is. 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. Note that salary does not include discretionary incentives or awards, like bonuses or commissions.
For reference, in Palm Beach County, the annual mean wage is approximately $75,000.
The Act does not apply to healthcare practitioners licensed under Florida law.
Two “Covered” Agreements
Both types of agreement can be made at the beginning or during employment, if the employee has seven days to consider signing the agreement.
Noncompete Agreements are fully enforceable if the following is met:
1)The employee is advised, in writing, of the right to seek counsel prior to executing the agreement and has at least seven days to review the agreement before signing;
2) The employee acknowledges, in writing, that in the course of their employment, the employee will receive confidential information or information about customer relationships;
3) The employee agrees not to assume a role with or for another business in which the employee would provide services similar to the services provided to the covered employer during the three years preceding the non-compete period, or in which it is reasonably likely the employee would use confidential information or customer relationships;
4) The non-compete period does not exceed four years; and
5) The non-compete period is reduced day-for-day by any non-working portion of the notice period pursuant to a covered garden leave agreement, if applicable.
There are no restrictions on the geographic scope of a covered non-compete agreement.
Garden Leave Agreements are an alternative to a regular non-compete agreement, where the employee promises to provide the employer with significant amount of notice before terminating employment and the employer allows the employee not to work while remaining on the payroll. During the pendency of the garden leave agreement, an employee is prohibited from working anywhere.
Under the CHOICE Act, a garden leave agreement will be enforceable if:
1) The employee is advised, in writing, of the right to seek counsel prior to executing the agreement and has at least seven days to review the agreement before execution.
2) The employee and employer agree to provide up to four years advance, express notice before terminating employment (the “notice period”).
3) The employer agrees to pay the employee their regular base salary and benefits for the duration of the notice period.
4) The employee acknowledges, in writing, that in the course of their employment, the employee will receive confidential information or information about customer relationships.
5) The garden leave provisions provide that:
-After the first 90 days of the notice period, the covered employee does not have to provide services to the covered employer;
-The covered employee may engage in nonwork activities at any time, including during normal business hours, during the remainder of the notice period; and
-The covered employee may, with the permission of the covered employer, work for another employer while still employed by the covered employer during the remainder of the notice period.
Enforcement Under the CHOICE Act
The CHOICE Act requires courts to issue a preliminary injunction against a covered employee. The injunction can only be modified or removed if the covered employee proves by clear and convincing evidence the following:
-The employee isn’t in a competitive role.
-The employer failed to provide promised consideration (like salary) and didn’t cure the failure after reasonable notice.
-The employer is no longer in the relevant line of business.
Note: If employee engages in “gross misconduct” (like breaching confidentiality), the employer may reduce the salary or benefits of the covered employee or “take other appropriate action,” and this would not be considered a breach of the agreement.
Why Does This Matter?
The CHOICE Act makes the following noteworthy updates to covered noncompete and garden leave agreements in Florida:
-Extended Protection: Up to four-year noncompete periods, which far exceeds traditional limits.
-Global Reach: No geographic caps broaden the scope of enforceable restrictions.
– Simplified Enforcement: Mandatory preliminary injunctions and burden-shifting in favor of employers.
Bruce Loren, Frank Sardinha, and Sarah Bachich of the Loren & Kean Law Firm are based in Palm Beach Gardens and Fort Lauderdale. Loren & Kean Law is a boutique law firm concentrating in construction law, employment law, and complex commercial litigation. Mrs. Bachich focuses her practice in employment law, including non-compete agreements. Mr. Sardinha focuses his practice in high-stakes business disputes and employment law. Mr. Loren has achieved the title of “Certified in Construction Law” by the Florida Bar, exemplifying the Bar’s recognition of this expertise. The firm’s construction clients include owners/developers, general contractors, specialty contractors in every trade, suppliers, and design professionals. Mr. Loren, Mr. Sardinha, and Mrs. Bachich can be reached at bloren@lorenkeanlaw.com fsardinha@lorenkeanlaw.com or sbachich@lorenkeanlaw.com or 561-615-5701.
