On July 3, 2025, the “Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act” became effective in Florida. The CHOICE Act is a significant measure enacted to bolster legal protections for noncompetition provisions creating a presumption of enforceability of “covered” garden leave and noncompete agreements.
Covered Garden Leave Agreements
The CHOICE Act includes specific provisions related to covered garden leave agreements. A garden leave refers to the period during which an employee is still employed and paid salary and benefits by their employer but is not actively engaged in work duties. Under a covered garden leave agreement, the covered employer and covered employee must provide one another with up to four years of advance notice before terminating the 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 same salary and benefits received immediately before the notice period began.
Covered garden leave agreements will be presumptively valid if the following conditions are met:
- The covered employer advises the covered employee in writing of the right to seek legal counsel before signing and provides at least seven days to review the agreement;
- The covered employee acknowledges in writing that they will receive confidential information or customer relationship; and
- The time to provide advance express notice of termination (the notice period) does not exceed four years.
Additional requirements for a covered garden leave agreement include:
- 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 (without limitation) during the remainder of the notice period;
- The covered employee may, with permission from the covered employer, work for another employer (presumably, a non-competitor) during the notice period; and
- The notice period may be reduced by the covered employer if the covered employer provides at least 30 days’ written, advance notice to the covered employee.
If a covered employee engages in “gross misconduct,” the covered employer may reduce the salary or benefits or take other appropriate measures during the notice period; these acts by the covered employer would not be considered a breach of the covered garden leave agreement. “Gross misconduct” is not defined.
Covered Noncompete Agreements
Noncompete agreements are designed to prevent employees from joining competitors or starting competing businesses immediately after leaving their current employer. These agreements protect trade secrets, proprietary information, and investments made by employers in their workforce – often referred to as the legitimate business interests of the employer. The CHOICE Act specifies the following criteria for presumptively valid covered noncompete agreements:
- The covered employer advises the covered employee in writing of the right to seek legal counsel before signing and provides at least seven days to review the agreement;
- The covered employee acknowledges in writing that they will receive confidential information or customer relationships;
- The covered employee must agree to not to take a role with another employer where they would provide similar services or use confidential information or customer relationships acquired from the covered employer;
- The noncompete period does not exceed four years; and
- The noncompete period is reduced day for day by any nonworking portion of the notice period, pursuant to a garden leave agreement, if applicable.
While a covered non-compete agreement states that it is enforceable within the geographic area “defined in the agreement,” the act does not specify a geographic boundary or limitation to be enforceable. As written, the CHOICE Act may apply globally.
Presumptive Validity/Mandatory Injunctive Relief
The CHOICE Act creates a presumption of enforceability of covered garden leave and noncompete. The act requires a court to issue a preliminary injunction to enjoin a covered employee from violating a covered agreement. If a covered employer seeks injunctive relief, the court must preliminarily bar any business, entity or individual from engaging the employee during their notice period. In addition to the injunctive relief, a covered employer may recover all available monetary damages, including fees.
A court may only modify or dissolve an injunction based on a covered agreement if the covered employee (or subsequent employer) proves by clear and convincing non-confidential evidence that either the new employment will not involve unfair competition (i.e., that the employee will not perform similar work during the restricted period or use confidential information or customer relationships or that the subsequent employer is not engaged in, or preparing to engage in a similar business as the covered employer in the restricted geographic area) or that the covered employer failed to pay the consideration provided for in the covered agreement. The covered employer must have had a reasonable opportunity to cure the non-payment failure.
Exclusions
The CHOICE Act does not apply to:
- Healthcare practitioners;
- Standalone confidentiality or non-solicitation agreements; and
- Garden leave and noncompete agreements that do not meet the Act’s requirements. For noncovered or existing noncompete agreements, employers still need to meet the requirements under existing Florida statutes section 542.335 to enforce a restrictive covenant.
Impact on Existing Agreements and Law Not Impacted
The CHOICE Act’s provisions are in addition to and do not replace or eliminate existing law under Florida statutes section 542.335 and governing case law. If an agreement with a noncompete provision does not within the CHOICE Act’s definition of a covered agreement, it will continue to be interpreted under existing law.
Next Steps and Best Practices for Employers
Before making decisions based on the new legal framework provided by the CHOICE Act, business leaders should work with counsel to consider all legal and non-legal considerations. Some initial action items include:
Review all existing noncompete agreements and consider revising in accordance with the CHOICE Act, if applicable salary thresholds and other conditions are met, to obtain the presumptive validity and enforcement protections;
Assess all new hires for CHOICE Act applicability and determine whether covered garden leave agreements or covered noncompete agreements are warranted;
Review and adjust hiring protocols to include compliance with the seven-day review period for covered agreements and to determine whether an applicant’s salary will meet the threshold amount to be considered a covered employee; and
Review non-covered employees’ employment agreements for maximum enforcement protection under existing law.
As always, an organization must ensure that its confidentiality practices and information protection protocols are secure so that confidential information is designated and treated as such and that all reasonable steps are taken to prevent misappropriation of confidential and proprietary information and trade secrets.
Conclusion
The CHOICE Act carries several implications for both employers and employees. For employers, the CHOICE Act offers enhanced protection against the loss of critical information and investments, thereby encouraging greater confidence in hiring and training skilled workers. For covered employees, the new law provides clarity and security in their employment agreements, ensuring that certain rights are protected when entering covered noncompete or garden leave agreements. As Florida’s economy continues to grow and develop, the CHOICE Act is intended to play a pivotal role in, among other things, shaping the future of employment relations and investment in Florida industry.
