Florida recently enacted the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act (“The CHOICE Act” or “Act”), which brings significant changes to the manner in which the state approaches and enforces restrictive covenants, specifically noncompete and garden leave agreements. The CHOICE Act took effect July 1, 2025, after Gov. Ron DeSantis declined to sign or veto the legislation. Under the Act, there is a presumption of enforceability for covered noncompete and garden leave agreements with a duration of up to four years, so long as certain requirements are followed.
This is a significant change that both employers and employees need to be aware of. Florida legislators have indicated the new law is intended to bolster economic growth, and it will likely lead to expanded enforcement of noncompete and garden leave agreements within the state.
Who and What is Covered Under the CHOICE Act?
The CHOICE Act applies to “covered employers” and “covered employees.”
- A “covered employer” is a business or individual that employs a covered employee.
- A “covered employee” is any employee or individual contractor “who earns or is reasonably expected to earn a salary greater than twice the annual mean wage of the county in [Florida] in which the covered employer has its principal place of business, or the county in [Florida] in which the employee resides if the covered employer’s principal place of business is not [Florida.]” The definition does not include health care practitioners as defined by state law. For purposes of the new law, “salary” does not include “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.” In other words, “covered employees” generally include employees or contractors who earn greater than or equal to two times the mean annual wage of their Florida county. The law is intended to primarily impact high-earning employees and contractors.
Further, it applies to “covered noncompete agreements” and “covered garden leave agreements.”
- A “covered noncompete agreement” means “a written agreement, or a portion of a written agreement, between a covered employee and a covered employer in which, for a period not to exceed four years and within the geographic area defined in the agreement, the covered employee agrees not to assume a role with or for another business, entity, or individual:
- (a) in which the covered employee would provide services similar to the services provided to the covered employer during the 3 years preceding the noncompete period; or
- (b) in which it is reasonably likely the covered employee would use the confidential information or customer relationship of the covered employer.”
- A “covered garden leave agreement” means a written agreement, or part of a written agreement, between a covered employee and covered employer in which: (a) the covered employee and covered employer agree to up to, but no more than, four years of advance, express notice before terminating the employment or contractor relationship; (b) the covered employee agrees not to resign before the end of such notice period; and (c) the covered employer agrees to retain the covered employee for the duration of such notice period and to continue paying the covered employee the same salary and providing the same benefits that the covered employee received from the covered employer in the last month before the commencement of the notice period. The covered employer is not obligated to provide discretionary incentive compensation, benefits, or have the covered employee continue performing any work during the notice period.
What Does the CHOICE Act Change?
The CHOICE Act marks a significant change from Florida’s current treatment of noncompete and garden leave agreements. The CHOICE Act creates a presumption that covered noncompete and garden leave agreements that are reasonable in geographic scope and meet the requirements above are enforceable and do not violate public policy. Prior to the CHOICE Act, restrictive covenant agreements in Florida were governed by Statute 542.335. Under the Statute, an employer seeking to enforce a restrictive covenant had to prove the agreement was necessary and reasonable. This required a showing of: (1) the existence of a written agreement signed by the employee; (2) a legitimate business reason worthy of protection (e.g. trade secrets, goodwill, and other confidential business information); and (3) reasonable limitations on the time[1], geographic scope, and scope of business restrictions contained in the agreement. The CHOICE Act applies to agreements that meet the definition and requirements under the CHOICE Act, essentially lowering the bar for employers to enforce covered agreements. All other employment agreements will continue to be subject to Statute 542.335.
How are Covered Agreements Enforced?
The CHOICE Act provides for robust enforcement mechanisms for employers and allows them to enjoin alleged violations by an employee subject to a covered agreement, including former employees bound by noncompete agreements and current employees on garden leave. If a covered employer seeks injunctive relief for an alleged violation of an agreement covered by the law, courts must preliminarily enjoin a covered employee and/or their new employer for an alleged violation of a covered agreement. Subsequently, a court may modify or dissolve the injunction if the covered employee and/or their new employer can show:
- the covered employee will not use the covered employer’s confidential information, customer relationships, or perform services similar to those they previously provided to the covered employer; or
- the covered employer failed to pay the salary or grant the benefits provided for in the covered agreement; or
- the new employer is not engaged or planning to engage in similar business activities within the geographic area.
In addition, the CHOICE Act provides that in “any action to enforce” covered noncompete and garden leave agreements, “the prevailing party is entitled to reasonable attorney fees and costs,” and covered employers are “entitled to recover all available monetary damages for all available claims.”
How Should Employees and Employers Respond?
While this new legislation favors employers, it adds to an already complex legal environment. Employers and employees must remember that the enforceability of a noncompete agreement varies by state, with some states like California and Massachusetts disfavoring or outright banning noncompete agreements. Employers seeking to take advantage of the changes effective under the CHOICE Act should consult with legal counsel to review and determine whether they want to revise existing or create new agreements. Likewise, employers seeking to hire prospective employees or applicants who may be bound by restrictive covenants should be aware of the enhanced protections of this new law and obtain guidance on how to proceed without running afoul of the legislation’s provisions.
[1] Statute 542.335 sets forth specific time restraints that courts will presume are reasonable.
