Is Your Business Ready for The CHOICE Act?

What is the CHOICE Act?         

On April 24, 2025, Florida state lawmakers passed the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth Act or CHOICE Act. The CHOICE Act is a law reforming how the state will see and treat non-compete and garden leave agreements as of July 1, 2025, when the law takes effect. The CHOICE Act does not replace existing non-compete laws in the sunshine state. Rather, it expands the pre-existing statutory scheme to make the interpretation and enforcement of non-compete and garden leave agreements more predictable for all parties to those agreements. Fundamentally, the CHOICE Act creates a presumption that covered non-compete and garden leave provisions are enforceable and do not violate public policy.

Further, it requires the courts to issue an injunction unless the former employee or new employer can prove the new employment will not result in unfair competition. A court can only modify an injunction if the new employer or covered employee can show by clear and convincing evidence that these three conditions are met:

1. The covered employee will not perform services for their new employer that are similar to services they previously performed for the covered employer, and they will not use the covered employer’s confidential information or customer relationships.
2. The new employer is not engaged, or planning for future engagement, in any competing business.
3. The covered employer failed to provide the required salary or benefits provided for in a covered garden leave agreement or a covered non-compete agreement.

In another employer-friendly move, the CHOICE Act stipulates that if a covered employee engages in gross misconduct, the employer may reduce the benefits or salary paid during the notice period without such changes being considered a breach of the contract. The CHOICE Act also does not impact the enforceability of previous agreements and states that any previous agreements will be governed under the previous standard for both non-compete and garden leave agreements in the state of Florida.

Who is covered?

The CHOICE Act expands those covered under the new regime quite broadly and applies to covered employees, employers, and agreements. Under the CHOICE Act, covered employees are individuals who earn a salary twice the annual mean wage of the county (in Florida) where the covered employer has its principal place of business or where the employee resides if the covered employer’s principal place of business is not in Florida. Covered employers are simply those individuals or entities who employ a covered employee. Finally, covered agreements are non-compete or garden leave agreements which have a choice of law provision specifying Florida and covers a covered employee whose primary place of work is in Florida or a covered employer whose principal place of business is in Florida.

How to know if a non-compete is enforceable under the new law?

A non-compete agreement is enforceable under the CHOICE Act if a few key conditions are met:

1. The agreement must not be enforceable for more than four years;
2. The agreement must inform the employee, in writing, that they possess a right to seek attorney review and must give that employee at least seven days to evaluate the agreement;
3. The employee must acknowledge, in writing, that they will receive confidential information or customer relationships;
4. The employee must agree not to take a role with another employer where they would use the confidential information gathered from their previous employer; and
5. The agreement must stipulate a reduction in the non-compete period on a one-to-one basis for each day the employee spends under a garden leave agreement.

There are no restrictions on the geographic scope of a covered non-compete agreement and so long as the previously mentioned elements are met, the non-compete will be enforceable.

A garden leave agreement is an agreement where the employer and employee agree that there will be a period of time where the employee does not have to work and in exchange for not working elsewhere, the employee still receives a salary. These agreements are enforceable, much like non-compete agreements, so long as certain elements are present with the agreement. Specifically, these elements include:

1. The time to provide advance express notice of termination does not exceed four years;
2. 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 before execution;
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 agreement must contain certain explanations of what the employee is permitted to do and on what timeline these actions are permissible. These explanations include those such as:
6. After the first 90 days of the notice period, the covered employee does not have to provide services to the covered employer;
7. The covered employee may engage in non-work activities at any time, without limitation, for the remainder of the notice period
8. The notice period may be reduced if the covered employer provides at least 30 days’ advance notice in writing to the covered employee; and
9. The covered employee may, with permission from the employer, work for another employer for the remainder of the notice period.

So long as these five elements are met in garden leave agreements, they are enforceable. The CHOICE Act does not put any geographic limitation on the enforcement of these agreements. Garden leave agreements are enforceable so long as the covered employee maintains a primary place of work in the state of Florida and the agreement is with an employer whose principal place of business is Florida and which agreement is expressly governed by the laws of Florida.

Who is exempt?

There are a few exemptions under the CHOICE Act. These exemptions include healthcare practitioners (as defined by Florida law); standalone confidentiality and non-solicitation agreements; and non-compete or garden leave agreements that do not meet the Act’s requirements.

What steps should employers take?

July 1, 2025 is almost upon us.  Florida employers should thoroughly review all existing non-compete agreements they have with employees and discuss them with labor and employment counsel. The main thing employers should be looking for in this review is to determine whether or not the agreements need to be modified to meet the requirements as laid out in the new law. Employers should also understand that those agreements that do not meet the specific qualifications for the CHOICE Act to apply (such as an employee earning less than double the mean salary) may still apply, however they will not be entitled to a preliminary injunction from the court and will not be granted the blanket presumption that the agreements are not against public policy.