Florida Passes Employer-Friendly Restrictive Covenant Legislation

In May of this year, we reported that Florida was on the cusp of enacting employer-friendly restrictive covenant legislation.

Earlier this month, Florida passed that bill, enacting the “Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act.” Florida Governor DeSantis did not actually sign the bill; however, in Florida, a bill becomes law if the Governor fails to veto it within the allotted time.  As Governor DeSantis did not veto it, the CHOICE Act became law on July 3, 2025.

As previously reported, the CHOICE Act outlines certain noncompete and garden leave agreement requirements.  As long as the requirements are met, a court “must preliminarily enjoin” a “covered employee” from breaching a noncompete or garden leave agreement if a “covered employer” seeks enforcement of a “covered noncompete agreement” or “covered garden leave agreement.”

Definitions

The CHOICE Act defines “covered employee” as an employee or individual contractor who earns or is expected to earn a salary greater than twice the annual mean wage of the Florida county where the employer maintains its principal place of business, or the Florida county where the employee resides, if the employer’s principal place of business is not located within the state. Of importance, healthcare practitioners—defined under § 456.001—are excluded from this definition.

A “covered employer” is any employer who employs or engages with a “covered employee.”

A “covered noncompete agreement” is a written agreement between a covered employee and covered employer for a period of no more than four years within the “geographic area defined in the agreement” in which the covered employee agrees not to engage in employment with another employer to (1) provide services like the services provided to the covered employer during the three years prior to the noncompete period, or (2) is reasonably likely to use the covered employer’s confidential information or customer relationships.

A “covered garden leave agreement” is defined as a written agreement between a covered employee and covered employer, where the parties agree to a period of up to four years of advanced, express notice before terminating the employment or contractor relationship, and both the covered employee agrees not to resign before the end of the notice period and the covered employer agrees to retain the covered employee for the duration of the notice period and continues paying the employee’s same salary and benefits as it had before the notice period.

“Notice period” is the date from the covered employee’s or covered employer’s written notice of intent to terminate the covered employee’s employment through the date of termination as set forth in a covered garden leave agreement. 

Covered Noncompete Agreements

The CHOICE Act creates a presumption that a covered noncompete agreement is enforceable and is not a restraint on trade.  Specifically, the CHOICE Act states that a “covered noncompete does not violate public policy as a restraint of trade,” and “is fully enforceable according to its terms” provided that the following requirements are met:

• The employer advises the employee, in writing, that the employee has a right to seek counsel before executing the noncompete agreement;
• The employee acknowledges, in writing, that during their employment they “will receive confidential information or customer relationships;”
• The noncompete agreement provides that the noncompete period—defined as the employee’s termination of employment through an agreed-upon noncompetition period—is reduced day-for-day by any nonworking portion of the notice period that is pursuant to a covered garden leave agreement; and
• The employer must provide notice of the noncompete agreement as follows:
  • A prospective covered employee must be provided notice of a proposed covered noncompete (and right to seek counsel) at least seven days before an offer of employment expires; and
  • A current covered employee must be provided notice of a proposed covered noncompete (and right to seek counsel) at least seven days before the offer to enter into the noncompete agreement expires.

Garden Leave Agreements

As with a covered noncompete agreement, a “covered garden leave agreement” does not violate Florida public policy as a restraint of trade “and is fully enforceable according to its terms,” provided that:

• The employee was advised, in writing, that they had a right to seek counsel before executing the garden leave agreement;
• The employee acknowledges, in writing, receipt of confidential information or customer relationships; and
• The garden leave agreement provides:
  • After the first ninety (90) days of the notice period, the employee no longer needs to provide services to the employer;
  • The employee may engage in non-work activities, including during normal business hours, during the remainder of the notice period;
  • During the remainder of the notice period, the employee may work for another employer, provided that the employer provides permission; and
  • The garden leave agreement notice period may be reduced during the notice period if the employer provides at least 30 days’ advance notice in writing to the employee.

In addition to the above requirements, garden leave agreements are subject to the same notice requirements as covered noncompete agreements, described above.

Breach of a Covered Noncompete Agreement or Covered Garden Leave Agreement

Consistent with its employer-friendly approach, the CHOICE Act directs that upon application by a covered employer seeking enforcement of a covered noncompete agreement or covered garden leave agreement, “a court must preliminarily enjoin a covered employee from providing services to any business, entity, or individual other than the covered employer during the noncompete period.” 

The Act also specifies that a court may modify or dissolve an injunction only if the covered employee establishes by clear and convincing evidence that: (i) during the covered period, they will not perform any work similar to the services provided to the covered employer during the three-year period preceding the commencement of the noncompete period, or use confidential information or customer relationships of the covered employer; (ii) the covered employer failed to provide the consideration provided for in the agreement; or (iii) the entity seeking to employ the covered employee is not engaged in a business activity similar to that engaged in by the covered employer in the geographic area specified in the agreement.  Courts are similarly afforded the express power to enjoin a business or entity seeking to employ or otherwise engage a covered employee.

Courts must presume that an employee or individual contractor has access to confidential information or customer relationships if such employee or individual contractor acknowledges such access in writing.  In addition to injunctive relief, the CHOICE Act allows for a prevailing covered employer to recover all available monetary damages for all claims.  The prevailing party is entitled to reasonable attorneys’ fees and costs. 

To What Agreements and Individuals Does the CHOICE Act Not Apply?

The CHOICE Act does not apply to healthcare practitioners, as defined under § 456.001. It also does not apply to confidentiality or non-solicitation agreements, and it does not apply to noncompete and garden leave agreements that do not meet the CHOICE Act’s requirements.  Importantly, however, all of these agreements remain enforceable under Florida law.  The CHOICE Act specifically states that “[a]ny action regarding a restrictive covenant that does not meet the definition of a covered garden leave agreement or a covered noncompete agreement … is governed by s. 543.335.” Thus, noncompete and garden leave agreements, as well as restrictive covenants with healthcare practitioners, remain enforceable under § 542.335.    

Choice of Law Issues

According to the language of the Act, the CHOICE Act applies to a covered noncompete or covered garden leave agreement with a covered employee who maintains a primary place of work in Florida, regardless of any applicable choice of law provisions.  The CHOICE Act also applies to a covered noncompete or covered garden leave agreement with a covered employer with a principal place of business in Florida and which agreement is expressly governed by Florida law. 

Takeaways

The CHOICE Act put Florida in the position of being one of the most employer-friendly jurisdictions on restrictive covenants, if not the friendliest.  Employers with employees located in Florida should look to update their agreements to take advantage of the CHOICE Act’s protections of noncompetes and garden leave agreements.  This may include, where appropriate, revising noncompetes with employees located in Florida to expressly state the noncompete is governed by Florida law. 

It also means employers seeking to hire employees in Florida must be particularly diligent in their hiring practices before making an offer of employment.