The CHOICE Act: Florida Bolsters an Employer’s Ability to Enforce Non-Compete and Garden Leave Agreements
By: David J. Gellen and Jack C. Sibel
On April 24, 2025, The Florida House and Senate passed the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act (the “Act”). Assuming Governor Ron DeSantis signs the CHOICE Act as expected, Florida’s laws on non-compete and garden leave agreements (i.e., paying employees their salary and benefits during a period when they are not required to perform any work but are restricted from accepting employment elsewhere) will undergo significant changes effective July 1, 2025.
Who Does the Act Apply to?
The CHOICE Act applies to “covered employees,” defined as employees or contractors who: (a) work primarily in Florida or work for an employer with their principal place of business in Florida; and (b) earn, or reasonably expect to earn, a salary greater than twice the annual mean wage of either: (i) the county where the employer has its principal place of business; or (ii) the county where the employee resides if the employer’s principal place of business is outside of Florida.
To calculate salary for purposes of this Act, employers must exclude both discretionary incentives (e.g., spot bonuses, one-time retention payments, non-promised holiday bonuses, etc.) and “anticipated but indeterminable compensation” (e.g., tips, sales commissions, performance bonuses tied to goals, stock or equity awards based on continued performance or employment, etc.).
Notably, the Act excludes from the definition of covered employee health care professionals that are listed under Fla. Stat. § 456.001.
Covered Agreements
The CHOICE Act only applies to garden leave agreements and non-compete agreements.
Garden Leave Agreements
Garden leave agreements involve compensating employees or contractors during a period when they are relieved of their duties but prohibited from accepting other employment or engagement(s). Importantly, the covered employer may choose to reduce the garden leave period by providing at least 30 days’ advance written notice to the covered employee. A covered garden leave agreement will be enforceable if the following are all met:
- Prior to signing the agreement, the covered employee is advised, in writing, of the right to seek counsel and has no less than seven days to review the agreement.
- The covered employee acknowledges, in writing, that during the covered employee’s employment or engagement, the covered employee will receive confidential information or information about customer relationships.
- The parties agree to provide no more than four years advance, express written notice before terminating the employment or engagement (the “notice period”).
- The covered employer agrees to compensate the covered employee according to the covered employee’s regular base salary and benefits during the notice period.
- The agreement includes each of the following terms:
- The covered employee does not have to perform any work or provide any services for the covered employer after the first 90 days of the notice period.
- During the remainder of the notice period, the covered employee may conduct non-work activities at any time, including during normal business hours.
- With the approval of the covered employer, the covered employee may work for another employer, despite remaining employed or engaged by the covered employer during the remainder of the notice period.
Non-Compete Agreements
Unlike the current Florida restrictive covenant law (see Fla. Stat. § 542.335), the Act does not include a limitation based on the geographic scope of covered non-compete agreements. Rather, a covered non-compete agreement will be enforceable if each of the following conditions are met:
- Prior to signing the agreement, the covered employee is advised, in writing, of the right to seek counsel and has no less than seven days to review the agreement.
- The covered employee acknowledges, in writing, that during their employment or engagement, the covered employee will receive confidential information or information about customer relationships.
- Time spent not working during the notice period (due to garden leave) counts against the non-compete period, reducing it day by day.
- The non-compete period is no greater than four years.
Enforcement & Remedies
Significantly, the CHOICE Act requires courts to grant preliminary injunctions against a covered employee unless the prospective employer or the covered employee can show that the new employment or engagement will not lead to unfair competition. A judge may modify or dissolve such an injunction upon a finding by clear and convincing evidence based on non-confidential information where any of the following circumstances exist:
- The covered employee will not: (a) perform any work similar to the services provided to the covered employer during the three years prior to the notice or non-compete period; or (b) use either confidential information or customer relationships of the covered employer.
- Despite the covered employee providing a “reasonable opportunity” for the covered employer to cure, the covered employer failed to pay the salary and benefits required under a covered garden leave agreement or failed to provide consideration for a covered non-compete agreement.
- The prospective employer is not engaged in, and is not preparing or planning to engage in, any business activity similar to that engaged in by the covered employer during the notice period for garden leave agreements or the non-compete period in the restricted territory for non-compete agreements.
For both garden leave and non-compete agreements, if the covered employee engages in “gross misconduct” against the covered employer, then the covered employer may reduce the covered employee’s salary or benefits or “take other appropriate action” during the notice or non-compete period, and such reduction or other action would not be deemed a breach of the covered agreement.
Additional Considerations & Conclusion
The Act appears by design to provide for a more structured, expedited, and employer-friendly framework for enforcing non-compete and garden leave agreements by making it significantly easier to seek and obtain an injunction against a covered employee or prospective employer. Of note, Fla. Stat. § 542.335 will continue to govern restrictive covenants: (a) that fall outside the purview of the Act, such as non-solicitation and confidentiality provisions; or (b) against employees or contractors who do not satisfy the salary threshold or other conditions specified above. However, the Act appears to provide an easier path to enforcement given that Fla. Stat. § 542.335 requires the employer to prove: (i) the existence of one or more legitimate business interests that justify the restrictive covenant; and (ii) that the restrictive covenant is reasonably necessary to protect the legitimate business interest(s) of the employer.
In sum, the Act creates an additional statutory pathway for enforcing garden leave and non-compete agreements, which will exist alongside Fla. Stat. § 542.335. The Act expands the tools available to employers seeking to enforce restrictive covenants under Florida law.
According to the Act, if a covered employer with a principal place of business in Florida executes a covered agreement (i.e., a garden leave or non-compete agreement) in accordance with the Act’s terms, those terms will govern over any conflicting law(s). Keeping this in mind, there may be future legal challenges to the enforceability of the Act based on this conflicts language, especially where other states vary in their laws pertaining to the enforceability of restrictive covenants.
What Should Employers and Employees Do in Anticipation of the Act’s July 1, 2025, Effective Date?
Employers should take proactive steps to review and update their:
- Employment, independent contractor, and related agreements for compliance with the Act.
- Human resource policies and hiring practices for compliance with the covered agreements for which potential covered employees may be impacted by the Act.
- Confidentiality agreements as the covered employee (or prospective employer) may only utilize non-confidential information to challenge the preliminary injunction.
- Of note, the Act provides that information filed with the court which the covered employer deems to be confidential must be filed under seal to protect confidentiality or avoid substantial injury.
- A prevailing covered employer is entitled to recover all available monetary damages for all available claims, including its reasonable attorney fees and costs.
Employees and contractors should take proactive steps to:
- Determine whether they meet the definition of a covered employee and fall within the Act’s purview.
- Review existing restrictive covenant agreements (e.g., employment agreements, independent contractor agreements, non-disclosure agreements, etc.) for purposes of determining the Act’s applicability to each of these agreements.
- Consider and determine whether their employment or engagement entails receiving confidential information or information about customer relationships.
Should you have any questions, please let us know.
About the Authors: David J. Gellen is a shareholder at Nason Yeager where he is chair of the law firm’s Corporate Department. Jack C. Sibel is an associate with Nason Yeager where he is a member of the law firm’s Corporate Department.
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