Business and Legal Insights

With the passage of the Florida Contract Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act (the “CHOICE Act”), which took effect on July 1, 2025, Florida has emerged as one of the most favorable states for employers seeking to enforce noncompete and related garden leave agreements. Under this legislation, noncompete and garden leave agreements are presumed to be enforceable, and courts will be required to issue preliminary injunctions to prevent "covered employees" from violating these agreements.

Covered Noncompete Agreements

Under the CHOICE Act, a covered noncompete agreement is a written agreement between a covered employee and a covered employer restricting the employee from taking on a role with or working for another business, entity, or individual if:

1. The role would involve providing services similar to those the employee offered to the employer during the three (3) years preceding the noncompete period; or
2. The employee would likely use the confidential information or customer relationships of the employer.

Notably, the CHOICE Act permits the restrictive covenant to last up to four (4) years. In order for the CHOICE Act to apply, a noncompete agreement must meet certain requirements:

1. It must be in writing;
2. The employer must advise the employee in writing that they have the right to seek counsel; and
3. The employee must have at least seven (7) days to consider signing the agreement.

Covered Garden Leave Agreement

A covered garden leave agreement under the CHOICE Act is a written agreement where both parties agree to a notice period of up to a maximum of four (4) years before either party can terminate the employment or contractual relationship. The employee is prohibited from working for any other employer during this notice period, and in exchange, the employer agrees to pay the covered employee for the entire duration of the notice period. The employee is only required to work during the first ninety (90) days of the notice period.

To be covered by the CHOICE Act, a garden leave agreement must meet several requirements:

1. It must be in writing;
2. The employer must provide written notice to the employee about their right to seek legal counsel before signing the agreement;
3. The employee must have seven (7) days to consider whether to sign the agreement;
4. The employee must acknowledge in writing that they will be receiving confidential information as part of their employment; and
5. The agreement provides:
   1. The covered employee need not work for the employer after the first 90 days of the notice period;
   2. After the initial ninety (90) days, the employee can engage in nonwork activities at any time, including during working hours;
   3. After the initial ninety (90) days, the employee can work for another employer with the employer’s permission; and
   4. The employer may only reduce the notice period upon at least thirty (30) days written notice to the employee.

Covered Employees

A "covered employee" under the CHOICE Act is defined as an employee or individual contractor who earns, or is reasonably expected to earn, a salary that is more than double the annual mean wage of the county where the employer's principal place of business is located. If the employer's principal place of business is outside the state, then the relevant county is where the employee resides. For most counties in Florida, twice the average mean wage will be between $80,000 and $110,000 per year. Covered employees do not need to be physically located in Florida, and thus the average mean wage in their county of residence must be consulted. Covered employee does not include a health care practitioner.

Noncompete and Garden Leave Agreements Are Presumptively Enforceable Under the Act

Under the CHOICE Act, covered noncompete agreements and garden leave agreements that meet the above criteria are presumptively enforceable. When an employer seeks to enforce a noncompete or garden leave agreement in court, the court must issue a preliminary injunction preventing the employee from providing services to any business, entity, or individual other than the covered employer during the noncompete or notice period unless the employee can meet certain burdens.

For covered noncompete agreements, the employee must show by clear and convincing evidence, based on non-confidential information, that:

1. The employee will not engage in any work that is similar to the services that the employee provided to the employer during the three-year period preceding the start of the noncompete period and will not use any confidential information or customer relationships belonging to the covered employer;
2. The employer has either failed to pay or provide the consideration outlined in the noncompete agreement and has had a reasonable opportunity to do so; or
3. The business, entity, or individual seeking to hire or engage the employee is neither currently involved in nor planning to engage in business activities similar to those of the covered employer within the geographic area specified in the noncompete agreement during the noncompete period.

The CHOICE Act also requires the court enforcing the covered noncompete to enjoin a business, entity, or individual from employing or engaging a covered employee during the noncompete period, creating the possibility of a direct action by the covered employer against a subsequent employer.

For covered garden leave agreements, the CHOICE Act requires courts to preliminarily enjoin a covered employee under a covered garden leave agreement from providing services to any business, entity, or individual other than the covered employer during the notice period. A covered employee can successfully modify or dissolve a preliminary injunction by providing clear and convincing evidence, based on non-confidential information, that:

1. The covered employee will not engage in any work that is similar to the services that the employee provided to the covered employer during the three-year period preceding the start of the notice period, and will not use any confidential information or customer relationships belonging to the covered employer; or
2. The covered employer has failed to pay the salary or the consideration outlined in the garden leave agreement during the notice period and has had a reasonable opportunity to rectify this failure.

Similar to noncompetes, courts can also enjoin businesses, entities, or individuals from employing or engaging a covered employee during the notice period.

Noncompete and Garden Leave Agreements Not Covered by the Act

The CHOICE Act provides greater protections to employers with restrictive covenants than the protections previously provided under the Florida Statutes. That statutory provision, namely,  section 542.335 of the Florida Statutes, continues to apply to agreements that do not comply with the CHOICE Act. It's important to note that a significant difference between the CHOICE Act and section 542.335 is that noncompete and garden leave agreements that fall under the CHOICE Act can last for up to four (4) years, whereas agreements exceeding two (2) years are presumed to be unreasonable under section 542.335.

Takeaways

The CHOICE Act significantly changes how restrictive covenants will be construed in Florida.  Companies should consider revising their existing employment agreements and restrictive covenant agreements to include the disclosures required by the CHOICE Act if they wish to take advantage of the additional protections available. Employers should consider having their current employees who meet the requirements of the CHOICE Act sign new restrictive agreements that comply with the Act.

Companies should also conduct additional due diligence when hiring key employees who may be bound by restrictive covenants covered by the CHOICE Act, as the hiring company may have liability to the prior employer and be subject to an injunction under the Act if it hires an employee in violation of a covered restrictive covenant. Companies should obtain representations from any new hires stating that they are not bound by any restrictive covenants. Furthermore, employment agreements should provide that a failure to disclose the existence of any restrictive covenants and/or a violation of restrictive covenants is grounds for termination for cause.

For more information, please reach out to blog authors Andrew McLaughlin, Alexander Cumming, Mary Ruth Houston or any member of the Shutts Labor and Employment Practice Group.