Florida Choice Act Bolsters Enforceability Of Noncompete And Garden Leave Agreements

In a departure from the legislative trends in certain states to curtail post-employment restraints, the state of Florida has bucked the tide to take the most employer friendly approach to restrictive covenants.

On April 24, 2025, the Florida legislature approved the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth Act (the "CHOICE Act"), which took effect on July 3, 2025 after Governor DeSantis refused to exercise his veto authority. Most notably, the CHOICE Act doubles the maximum term of covered garden leave and noncompete agreements from two to four years and simplifies the steps that employers must take to secure a temporary injunction to enforce these covenants.

The Florida legislature found that the CHOICE Act advances important state interests by upholding contractual obligations between employers and workers that encourage optimal levels of information sharing, training, and development. The legislature also found that alternative means of protecting confidential information and client relationships, such as nondisclosure agreements and nonsolicitation clauses in employment contracts, are insufficient to protect against the global risks faced by Florida companies, and that predictability in the enforcement of contracts described in the CHOICE Act will encourage investment in Florida.¹

Florida's recent embrace of garden leave and noncompete agreements contrasts with the dominant regulatory trend. Barely a year earlier, on April 23, 2024, the Federal Trade Commission issued a final rule (the "Final Rule") that would prohibit nearly all noncompete agreements nationwide, and in the intervening months a growing roster of states—including Utah, Montana, Indiana, Oregon, and Colorado—have enacted or strengthened statutes that invalidate or limit these restrictions.²Although the Final Rule faces serious legal challenges and may ultimately be invalidated, many observers expected continued momentum toward narrower enforcement of noncompete restrictions at the state level. The CHOICE Act, therefore, positions Florida as an outlier whose employers now have greater latitude to protect business interests (while its workers confront longer and more readily enforceable restrictions).

Overview and impact on existing Florida law

The CHOICE Act creates a presumption that "covered garden leave agreements" and "covered noncompete agreements" that are entered into on or after July 1, 2025 (collectively, "Covered Agreements") are enforceable and do not violate public policy as restraints on trade, provided certain conditions are met.³Under the CHOICE Act, courts are required to issue preliminary injunctions in favor of "covered employers" to enjoin "covered employees" from violating Covered Agreements. Additionally, courts may only modify or dissolve preliminary injunctions if the "covered employee" proves by clear and convincing evidence that either (1) the subsequent employment will not result in unfair competition or (2) the "covered employee" did not receive the consideration provided in the agreement.

The CHOICE Act defines certain key terms:

• A "covered employee" is an employee or independent contractor who earns, or is reasonably expected to earn, a salary⁴greater than twice the annual mean wage⁵of the Florida county in which their employer has its principal place of business, or the employee resides (if the covered employer's principal place of business is outside Florida) (a "Covered Employee");⁶
• A "covered employer" is an entity that, or individual who, employs or engages a Covered Employee, provided that the Covered Employee's primary place of work (i.e., where they spend most of their working time) is with that employer (a "Covered Employer");
• A "covered noncompete agreement" is a written agreement that restricts a Covered Employee from working for a new employer within a specified geographic area for up to four years following the termination of their employment or contractor relationship in a role similar to that performed for the Covered Employer during the three years preceding the "noncompete period" (as defined below), or where it is reasonably likely that the Covered Employee would use the Covered Employer's confidential information or customer relationships (a "Covered Noncompete Agreement");
• A "noncompete period" is the time from the Covered Employee's termination of employment through the end of the agreed-upon post-employment period of noncompetition as set forth in the Covered Noncompete Agreement (the "Noncompete Period");
• A "covered garden leave agreement" is an agreement between a Covered Employee and Covered Employer under which: both parties agree to provide up to four years of advance, express notice before terminating the employment or contractor relationship (the "Notice Period"); the Covered Employee agrees not to resign before the end of the Notice Period; and the Covered Employer agrees to pay the Covered Employee their regular base salary and benefits during the Notice Period (a "Covered Garden Leave Agreement").

Under Florida's existing restrictive covenant statute ("Existing Florida Law"), an employer seeking to enforce a restrictive covenant must show that the agreement is signed in writing by the employee, protects a legitimate business interest (for example, trade secrets, confidential business or professional information, customer or client goodwill, or specialized training), and is reasonably limited in time, area, and line of business.⁷The CHOICE Act does not amend or replace Existing Florida Law, but rather supplements it with the above described provisions as they relate to Covered Agreements.

Enforceability and applicability

A Covered Agreement will be considered enforceable under the CHOICE Act only if it advises the Covered Employee in writing of their right to seek counsel, provides them at least seven days to consider the agreement, and includes a written acknowledgement from the Covered Employee that the Covered Employee will receive confidential information or customer relationships during employment.

In addition to these requirements, a Covered Noncompete Agreement must provide that the Noncompete Period is reduced "day-for-day" by any nonworking portion of the Notice Period pursuant to a Covered Garden Leave Agreement, if applicable. For example, if a Covered Employee has a two-year (i.e., 730-day) Notice Period and a two-year (i.e., 730-day) Noncompete Period with a Covered Employer, and the Covered Employee is terminated by the Covered Employer 70 days into that Notice Period, the Noncompete Period will be reduced by the number of days that the Covered Employee spent not working for the Covered Employer during the Notice Period. In this example, the nonworking portion of the Covered Employee's Notice Period is 660 days, and the Noncompete Period would be reduced to 70 days.

To be enforceable under the CHOICE Act, a Covered Garden Leave Agreement must also provide that:

• after the first 90 days of the Notice Period, the Covered Employee is not required to provide services to the Covered Employer
• the Covered Employee may engage in "nonwork activities" (undefined) at any time during the remainder of the Notice Period
• with the Covered Employer's permission, the Covered Employee may work for another employer during the remainder of the Notice Period (i.e., while still employed by the Covered Employer); and
• the Notice Period may be reduced if the Covered Employer provides at least 30 days' advance written notice to the Covered Employee.

The CHOICE Act does not appear to apply to stand alone confidentiality or nonsolicitation agreements, nor does it apply to any Covered Agreement that does not meet the requirements set out above. However, for these out-of-scope agreements, employers must nonetheless meet the requirements under Existing Florida Law to enforce a restrictive covenant.

Enforcement mechanisms

If a Covered Employer seeks judicial enforcement of a Covered Agreement, the court must first, for the duration of the noncompete or Notice Period, preliminarily enjoin the Covered Employee from providing services to any other business, entity, or individual, and the business, entity, or individual engaging the services of the Covered Employee. The court may then modify or dissolve the injunction only if the Covered Employee or new employer establishes by clear and convincing evidence, based on nonconfidential information, that:

• the Covered Employee will not perform during the noncompete or Notice Period any work similar to that performed for the Covered Employer during the three years preceding the commencement of the noncompete or Notice Period or use the Covered Employer's confidential information or customer relationships
• the Covered Employer has failed to pay or provide the consideration or salary and benefits required under the Covered Agreement during the noncompete or Notice Period and has had a reasonable opportunity to cure that failure; or
• the prospective employer is neither engaged in, nor planning to engage in during the noncompete or Notice Period, any business activity similar to that of the Covered Employer in the geographic area specified in the Covered Agreement.

In addition to injunctive relief, prevailing Covered Employers may also recover monetary damages and the prevailing party is entitled to reasonable attorneys' fees and costs. Furthermore, if a Covered Employee engages in "gross misconduct" (undefined) against the Covered Employer, the Covered Employer may reduce the Covered Employee's salary or benefits or "take other appropriate action" during the noncompete or Notice Period, which may not be considered a breach of the Covered Agreement.⁸

Outstanding questions and considerations

The CHOICE Act represents a dramatic shift in Florida's approach to noncompete and garden leave agreements, but it leaves numerous questions unanswered. Importantly, it does not repeal or fully harmonize with Existing Florida Law, which creates uncertainty about how courts will reconcile the CHOICE Act's provisions, such as the four-year enforceability period with the existing statute, which presumes noncompete agreements longer than two years are unreasonable. The CHOICE Act also:

• purports to override conflicting laws if a Covered Agreement is governed by Florida law and the employer is based in Florida or if the covered employee has his primary place of work in Florida, "regardless of any applicable choice of law provisions," but it remains unclear whether courts in other states (particularly those that prohibit or severely restrict noncompete agreements, like California) will apply the CHOICE Act in disputes involving Florida businesses or employees. This is likely to result in forum and choice-of-law disputes
• expressly defines Covered Garden Leave Agreements, but leaves open important questions about what constitutes permissible "nonwork activities" and "gross misconduct," and how salary and benefits may be adjusted for the latter
• mandates certain procedural requirements (including, for example, at least seven days' notice and the need to provide written notice of the right to seek counsel) before execution of a Covered Agreement. It is unclear whether the failure to strictly comply with these procedural requirements will render an agreement entirely unenforceable, or if courts will allow for partial enforcement, "blue penciling," or equitable remedies
• leaves open important questions as to the quantum of monetary damages that prevailing Covered Employers can recover under the CHOICE Act and whether a violation of a Covered Agreement can serve as grounds for other claims, including tortious interference claims against subsequent employers, for example
• covers both employees and independent contractors, but it is unclear how the salary threshold and other requirements apply to independent contractors who may not receive a traditional "salary"; and
• applies only to employees and independent contractors who earn more than twice the "annual mean wage," but there is ambiguity regarding whether the threshold should be based on county or statewide mean wage, as the Choice Act references both in different sections.

Employers should anticipate significant litigation and evolving judicial guidance as the CHOICE Act is implemented and interpreted in the coming years.

Next steps for employers

Florida employers, as well as employers located outside of Florida with employees located in Florida, should consider the protections that the CHOICE Act affords them and think about whether it is appropriate to take any of the steps below:

• review all existing noncompete and garden leave agreements and consider amending these agreements to align with the CHOICE Act's protections and limitations (including by adding Florida choice of law and dispute resolution provisions)
• review and revise hiring practices on a go-forward basis, including form employment agreements, form offer letters, grant agreements, and other onboarding documents, as needed to comply with the CHOICE Act
• educate HR personnel, in-house counsel, and managers about the requirements and implications of the CHOICE Act; and
• monitor any updates, guidance, and case law interpreting the CHOICE Act and consult with legal counsel, as needed.

Footnotes

1. Fla. S.B. 922, § 542.42, 2025 Leg., Reg. Sess. (Fla. 2025).

2. See Fair Competition Law, "Colorado, Indiana, Montana, Oregon, Utah pass new restrictive covenant laws, many more noncompete bills," available at https://faircompetitionlaw.com/2025/06/16/colorado-indiana-montana-oregon-utah-pass-new-restrictive-covenant-laws-many-more-noncompete-bills/ on June 16, 2025.

3. S.B. 922, § 542.36.

4. For the purposes of the CHOICE Act, "salary" excludes health care benefits, severance pay, retirement benefits, expense reimbursement, distribution of earnings and profits not included as compensation for personal services, discretionary incentives or awards, or anticipated but indeterminable compensation, including tips, bonuses, or commissions.

5. "Annual mean wage" is defined as the most recent annual mean wage as calculated by the United States Department of Labor Bureau of Labor Statistics, or its successor calculation, for all occupations in the state of Florida. It is, however, not clear whether the threshold should be based on county or statewide mean wage, as the CHOICE Act references the county mean wage in the definition of "Covered Employee" and the statewide mean wage in the definition of "Annual Mean Wage."

6. Healthcare practitioners are expressly excluded from the definition of "Covered Employee."

7.See Fla. Stat. 542.335.

8. S.B. 922, § 542.44.

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.