Florida recently joined the growing list of states attempting to change non-compete law. But unlike other states that have made it harder to enforce these covenants, Florida’s approach is to make it easier for a former employer to enforce a non-compete clause.
Florida’s legislature passed the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (“CHOICE”) Act on April 24, 2025, which went into effect on July 3, 2025 once Governor Ron DeSantis signed the legislation. After understanding the nuances of the act, it appears that the financial industry drove this legislation.
Why Is the CHOICE Act Unique?
Florida’s CHOICE Act bucks the trend across the country. Unlike other states that have made it more difficult to enforce non-competes against former employees, the CHOICE Act will instead make it easier for certain former employers to enforce a non-compete, it will broaden the restrictions on certain employees, and it will include broader remedies for an employer.
The new act enforces non-competes that prohibit an employee or individual independent contractor from working in a similar role for a another business that provides the same or similar services, or from working in a job in which the individual would use the former employer’s confidential information or client relationships that the individual acquired in the 3 years prior to the start of the notice period.
How Does the Act Impact Existing Florida Law?
Florida’s current non-compete law is codified in Florida Statute 542.335. While there are other nuances, in essence a non-compete that prohibits an employee from working for a competitor within a geographic area for a timeframe between 6 months and 2 years is generally considered “reasonable.” And the prevailing party in a dispute is able to recover attorneys’ fees and costs.
The CHOICE Act, however, does not replace the current law, but rather supplements it. The new act only applies to employees or individual independent contractors who meet the following conditions:
- They work in Florida or for an employer that is based in Florida, and
- They earn, or are expected to earn, a salary that is greater than twice the annual average wage of the Florida county in which the business is located, or the county where the worker lives if the company is based in another state.
The new act does not apply to certain “health care providers.”
The CHOICE Act and “Garden Leave”
Most unique about the CHOICE Act is its “garden leave” provision. Some financial services companies (hedge funds, for example) include a paid “garden leave” provision in their contracts, under which the employer continues to pay an employee compensation, but the employee cannot work for a competitor during that time period.
Critically, the former employer will not pay any discretionary compensation to the former employee while on “garden leave.” Instead, the former employer may only pay the base salary and no bonuses. In the financial services industry, the majority of an employee’s income comes from discretionary compensation.
A new employer may be willing to wait for an employee’s “garden leave” to expire, but typically new employers are wary of waiting too long out of fear that the employee’s skills will deteriorate (among other concerns). While a “garden leave” provision appears beneficial on the surface, the provision deters employee mobility by financially impacting the employee.
The CHOICE Act allows employers to place employees on a 4-year “garden leave,” meaning employees may be barred from working for a competitor for up to 4 years. Yet the “garden leave” requirements are nuanced and allow for flexibility. The act requires an initial 90-day period during which the employer may require the employee to provide services. After that, the employer cannot require the employee to provide services for the employer, the employee can perform non-work activities during work hours, the employer can agree to allow the employee to work for another employer, and the employer can reduce the “garden leave” period by providing 30-days written notice.
If the employer decides to place an employee on “garden leave,” the employer must provide the employee the same benefits that the employee received in the final month before the garden leave begins. But the employer does not have to pay discretionary or incentive compensation during the “garden leave” period.
Ultimately, the new act (a) creates a presumption that non-competes do not violate public policy, (b) allows restrictions to last up to 4 years, and (c) allows restrictions without a geographic scope.
While the CHOICE Act is designed to apply to only high-earning individuals, it excludes health care providers.
What Are the Act’s Technical Requirements?
To be enforceable, agreements must include the following:
- The agreement must be in writing and signed by the employer and the employee or individual independent contractor,
- The agreement must indicate that Florida law applies,
- The employer must advise the employee in writing to consult with an attorney,
- The employer must provide 7 days to review the agreement,
- The employee or individual independent contractor must confirm in writing that the employee is receiving the employer’s confidential information or access to its client relationships, and
- The non-compete period must be reduced for each day that is covered by a “garden leave.”
How Will the Act Be Enforced?
The new act includes strong enforcement remedies for a former employer. Typically in these matters, a former employer will ask a court to enter a temporary restraining order or preliminary injunction to preserve the status quo and prevent the former employee from working for the new employer. After that initial request, a court will typically set an expedited schedule for the parties.
The act requires a court to issue a preliminary injunction unless the employee can demonstrate, through “clear and convincing” evidence by relying on information that is not confidential, either that (a) the new job will not result in unfair competition or harm the former employer’s legitimate business interests, or (b) the former employer failed to provide the consideration it agreed to provide. If an employee or individual independent contractor violates the covenant, then the former employer can recover “all available monetary damages for all available claims.” Similar to the existing law, the winning or prevailing party is able to recover their attorneys’ fees.
What Is Next?
Litigation. The act attempts to pre-empt laws in other states, which will lead to inevitable lawsuits. It is unclear how judges and courts will interpret the act from a public policy perspective. Generally, judges are wary of prohibiting an employee from finding new work for up to 4 years. And while employees will receive a sizeable salary not to work under the act, they will receive only a fraction of what they could otherwise earn. Further, employees may lose the ability to change jobs or risk a diminishment in their skills.
Moreover, financial firms are likely to continue to relocate to Florida. In recent years, firms have already left Illinois and New York. The act is largely favorable to hedge funds and financial firms and, alongside other reasons, the act will encourage more companies to make the move.
Finally, there are opportunities for employees who currently do not have such “garden leave” provisions. Because the pool of talented employees may become limited—as more and more are bound by restrictive non-competes under the new law—employees will fewer restrictions will have the leverage to negotiate better compensation when changing jobs.
What Does This Mean for Businesses?
Companies who seek to hire employees will need to conduct their due diligence to ensure a full understanding of a prospective employee’s obligations, both to avoid litigation and to assess when the new hire can realistically begin work.
Research assistance for this article was provided by Hannah Carapellotti.