The CHOICE Act: A New Era For Noncompete Agreements In Florida

Key Takeaways

• Florida lawmakers recently passed new legislation that drastically changes the state's regulation of noncompete and garden leave agreements, effective July 1, 2025.
• The new law applies specifically to high-earning employees and provides for easier enforcement of covered noncompete and garden leave agreements.
• Employers looking to protect their confidential business information and customer relationships should review their current noncompete and garden leave practices to ensure compliance with the new legislation.

As referenced in our blog post discussing notable noncompete changes nationwide, Florida lawmakers are changing how the Sunshine State views noncompete and garden leave agreements. On April 24, 2025, state lawmakers passed the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act. The CHOICE Act is set to take effect on July 1, 2025, and Florida employers are welcoming the new legislation with open arms.

The CHOICE Act seeks to bolster Florida's business climate while balancing the interests of employers and high-earning employees, and the new law marks a significant change from the State's current treatment of noncompete and garden leave agreements. Both employers and employees should be aware of these changes as they look to comply with – and take advantage of – the new legal landscape.

How are these agreements governed in Florida today?

In Florida, restrictive covenant agreements are currently governed by Florida Statute 542.335. Under this statute, an employer seeking to enforce an agreement must prove the agreement is necessary and reasonable. To do so, the employer must show three things:

1. The existence of a written agreement signed by the employee;
2. A legitimate business reason worthy of protection (examples are trade secrets, customer relationships and goodwill, and other confidential business information);
3. Reasonable limitations on the time, geographic scope, and scope of business restrictions contained in the agreement.

In determining the reasonableness of an agreement, courts often rely on several rebuttable presumptions that turn on the length of the restriction and the business interests being protected.

The CHOICE Act does not replace existing noncompete laws in Florida. Instead, it expands the statutory scheme to provide more predictability to employers and employees.

To whom does the CHOICE Act apply?

The CHOICE Act only applies to "covered employers" and "covered employees." A "covered employer" is any business or individual that employs a covered employee. A "covered employee" is any employee or individual contractor (excluding healthcare professionals) who earns – or reasonably expects to earn – an annual salary greater than twice the annual average wage of the county in Florida where the covered employer has its principal place of business. If the covered employer's principal place of business is not located in Florida, the annual average wage is calculated based on the county where the covered employee resides. It should be noted that "salary" as defined by the new law specifically excludes bonuses, commissions, and health and retirement benefits.

What does the CHOICE Act change?

The CHOICE Act creates and governs two new types of covered agreements: "covered garden leave agreements" and "covered noncompete agreements." The Act also provides employer-friendly enforcement provisions and shifts much of the burden to covered employees to demonstrate why these types of agreements should not be enforced.

Covered garden leave agreements

"Garden leave" occurs when employees remain on an employer's payroll after giving notice of their resignation. During garden leave, employees often perform little to no work for their employer but are simultaneously prevented from providing services to competitors. This allows employers to protect their business interests by preventing an employee from negatively impacting the employer, as it precludes the employee from pursuing the employer's customers or obtaining/using confidential business information during the garden leave period.

The CHOICE Act builds on this idea through the creation of "covered garden leave agreements." The new law permits the creation of a covered garden leave agreement under which a covered employer and a covered employee must provide one another with up to four years of advance notice before terminating their employment relationship. This period is referred to as the "notice period." During the notice period, the covered employee agrees not to resign their employment, and the covered employer agrees to retain the employee and continue paying the covered employee the same salary and insurance benefits they were receiving immediately before the notice period began.

The CHOICE Act requires the following for a covered garden leave agreement to be enforceable:

• The covered employer must advise the covered employee in writing of their right to seek legal counsel prior to entering into the covered garden leave agreement and allow the covered employee at least seven days to consider the offer.
• The covered employee must acknowledge, in writing, that they have received confidential information or customer relationships.
• After the first 90 days of the notice period, the covered employee is not required to provide any services to the employer, and the covered employee is also permitted to engage in nonwork activities during the remainder of the notice period.
• The covered employee may, with the covered employer's permission, work for another employer while still employed by the covered employer during the remainder of the notice period.

The CHOICE Act also provides that a covered employer may reduce the garden leave notice period at any time after it has been initiated so long as the employer notifies the employee in writing at least 30 days before the end of the notice period.

Covered noncompete agreements

The CHOICE Act also seeks to strengthen Florida's protections of noncompete agreements. Under the new law, covered noncompete agreements can restrict a covered employee from working for another employer for up to four years if the covered employee (1) is expected to perform services for their new employer that are similar to services they previously performed for the covered employer or (2) is expected to use the confidential information or customer relationships of the covered employer when working for their new employer.

The following requirements must be met in order for a covered noncompete agreement to be enforceable under the CHOICE Act:

• The noncompete period must not exceed four years.
• The covered employer must advise the covered employee in writing of their right to seek legal counsel prior to entering into the covered noncompete agreement and allow the covered employee at least seven days to consider the offer prior to its expiration.
• The covered employee must acknowledge, in writing, that they will receive confidential information or customer relationships over the course of their employment.
• The noncompete period is reduced day for day by any nonworking portion of the notice period under an applicable covered garden leave agreement.

Enforcing covered agreements under the CHOICE Act

Perhaps most notable are the employer-friendly enforcement provisions of the CHOICE Act. Under the new law, courts are required to issue a preliminary injunction against a covered employee and/or their new employer for an alleged violation of a covered agreement. A court may only modify or dissolve the injunction if the covered employee and/or their new employer can show one the following by clear and convincing evidence (a high burden in civil litigation):

• The covered employee will not perform services for their new employer that are similar to services they previously performed for the covered employer, nor will they use the covered employer's confidential information or customer relationships.
• The new employer is not engaged in, or planning to engage in, any competing business.
• The covered employer failed to provide the required salary or benefits provided for in a covered garden leave agreement or a covered noncompete agreement.

Additionally, the CHOICE Act provides that if a covered employee "engages in gross misconduct," a covered employer may reduce the salary or benefits paid to the covered employee or take other appropriate action during the notice period or noncompete period provided for in a covered agreement, and such action may not be considered a breach of the covered agreement. Lastly, the new law provides that the prevailing party in any enforcement action is entitled to payment of its reasonable attorneys' fees and costs.

The CHOICE Act also makes clear that the new law does not affect or limit the enforceability of any other employment agreements, including existing noncompete and garden leave agreements, and that Florida Statute 542.335 (discussed above) continues to govern any action regarding a restrictive covenant that does not fall under the CHOICE Act's covered agreements.

How should employers respond to the CHOICE Act?

Businesses have a number of decisions to make ahead of the CHOICE Act's expected start date of July 1. These decisions include whether to revise existing agreements, modify new agreements, and strengthen confidentiality protections. Before making these decisions, businesses should account for both legal and nonlegal considerations. BakerHostetler's Labor and Employment Practice Group is comprised of dozens of experienced individuals who regularly draft and litigate noncompete and garden leave agreements in Florida and around the country. Please contact any one of our experienced professionals as your business works to comply with, and take advantage of, the ever-changing laws governing noncompete agreements in Florida and nationwide.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.