In April 2025, the Florida legislature passed non-compete legislation (which the Governor is expected to sign) that will permit, among other things, non-compete and garden leave clauses of up to four years in duration. The proposed law would also create a presumption that such clauses are enforceable and do not violate public policy, and require courts to issue injunctions against employees who violate their covered agreements. The changes would become effective July 1, 2025.
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On April 24, 2025, the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (“CHOICE”) Act passed both the Florida House and Senate, and is expected to be signed by Florida Governor Ron DeSantis. If signed, the Act will go into effect on July 1, 2025.
The Act covers both non-compete and garden leave agreements. A “covered noncompete agreement” may be up to four years in duration, during which time the employee may not assume a role with another entity in which the employee would provide services similar to those provided to the former employer during the prior three years, or in which it is reasonably likely the employee would use the confidential information or customer relationships of the former employer. A “covered garden leave agreement” similarly would require the employee to provide up to four years of notice before terminating an employment relationship, during which period the employer agrees to retain the employee and continue paying the same salary and benefits that were received in the last month before the commencement of the notice period, excluding discretionary incentive compensation or benefits. The employer is not required to have the employee perform work during the notice period.
The CHOICE Act also creates a presumption that covered non-compete and garden leave agreements are enforceable and do not violate public policy. Under the Act, upon a former employer’s application, a court must issue an injunction unless the former employee or new employer can prove by clear and convincing evidence that the new employment will not involve similar work or use the former employer’s confidential information or customer relationships, or that the former employer failed to pay the employee.
The Act limits the definition of “covered employee” to an employee or individual contractor who earns more than twice the annual mean wage of the Florida county in which the employer has its principal place of business, or if the employer does not have its principal place of business in Florida, then the county in Florida where the employee resides. The term excludes health care practitioners.
The Act includes other requirements as well to make such agreements enforceable, including that the employee was advised in writing of the right to seek counsel and acknowledged in writing the receipt of confidential information or customer relationships.
As noted above, Governor DeSantis is expected to sign the Act, which would then go into effect on July 1, 2025. Employers based in Florida or who engage workers who reside in Florida should review their existing non-compete and garden leave agreements and related policies and consider whether modifications are needed to ensure such agreements will be covered.