Hunton Employment & Labor Perspectives

Effective July 1, 2025, the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (“CHOICE”) Act became law in Florida.

Already one of the most employer-friendly states in the country for the enforcement of restrictive covenant agreements, the CHOICE Act expands upon Florida’s existing statutory scheme to create even greater flexibility and enhanced protections for the enforcement of restrictive covenants if certain conditions are met, while not superseding Florida’s already existing—and business friendly—non-competition statute.

Florida’s Long-Time and Still-In-Effect Non-Compete Statute

Florida Statute 542.335 already sets forth longstanding parameters for the enforcement of restrictive covenant agreements in the state, which are still in effect despite the passage of the CHOICE Act.

Key Presumptions Under § 542.335

The clarity and direct nature of Florida Statute 542.335 has long-been a help to employers in crafting and then navigating restrictive covenant disputes in Florida. Below are certain key presumptions and provisions of the still-in-effect noncompete statute.

 Legitimate Business Interests

Statute 542.335 permits restrictive-covenant agreements provided that such agreements are reasonable in terms of time, geographic area, and business scope. The person seeking enforcement must plead and prove that the restrictive covenant is justified by one or more legitimate business interests, such as (i) trade secrets, (ii) confidential business or professional information, (iii) substantial relationships with specific customers, patients, or clients, (iv) customer goodwill associated with a business’s trade name, trademark, service mark, or trade dress, specific geographic location, or marketing area, or (v) extraordinary or specialized training.

Presumptions Regarding Parameters of Covenants

Statute 542.335 provides clear guidelines on the presumed reasonableness of the duration of restrictive covenants. These guidelines help courts assess whether the temporal scope of a covenant is justifiable:

• A restraint of 6 months or less is presumed reasonable, while more than 2 years is presumed unreasonable when related to a former employee or independent contractor;
• A restraint of 1 year or less is presumed reasonable, while more than 3 years is presumed unreasonable when related to a former distributor, dealer, franchisee, or licensee of a trademark;
• A restraint of 3 years or less is presumed reasonable, while more than 7 years is presumed unreasonable when related to equity interests or shares in a business; and
• Restraints related to trade secrets are presumed reasonable if 5 years or less, and unreasonable if more than 10 years.

Enforcement and Remedies

The enforcement provisions of Statute 542.335 ensure that restrictive covenants are implemented with brisk efficiency, and include the following rules:

• Statute 542.335 authorizes courts to grant injunctive relief and creates a presumption of irreparable injury to the enforcing party based merely on the violation of the covenant itself;
• In determining the enforceability of a restrictive covenant, Statute 542.335 instructs courts not to consider individualized economic or other hardships to the person against whom enforcement is sought, nor to refuse enforcement on the ground that the agreement violates public policy unless such public policy is articulated specifically by the court;
• A court may consider that the person seeking enforcement no longer continues in the line of business that is the subject of the restrictive covenant only if such discontinuance of business is not the result of a violation of the restriction; and
• Finally, under Statute 542.335, a court may award attorney’s fees and costs to the prevailing party in any action seeking enforcement of, or challenging the enforceability of, a restrictive covenant.

Enforcement is also contingent upon the non-compete agreements being set forth in writing and signed by the person against whom enforcement is sought. If the party enforcing a restrictive covenant shows that the restraint is necessary, the opposing party must then demonstrate that it is excessively broad, lengthy, or unnecessary to protect legitimate business interests. If a Court ultimately finds the restrictive covenant excessive, it must modify the restraint to provide only the necessary protection for those interests.

As of July 1, 2025, The CHOICE Act Provides Florida Employees with Additional and Even Greater Protections in Certain Circumstances

CHOICE Act Coverage

The CHOICE Act does not replace Statute 542.335 but creates additional categories of enforceable agreements.  Specifically, the CHOICE Act only applies to agreements that meet the particular requirements of a covered (i) garden leave or (ii) non-compete agreement as set forth in the statute. For all other restrictive covenant agreements, Statute 542.335 will continue to govern. However, for agreements that are compliant with the requirements of the CHOICE Act, employers can take advantage of even greater protections. 

In order for the CHOICE Act to apply, the employee at issue must be a “covered” employee.  Covered employees consist of employees or independent contractors that expect to earn a salary greater than twice the annual mean wage of the Florida county where his or her employer has its principal place of business, or the Florida county in which the employee resides if the employer’s principal place of business is out of state.  As an example, twice the annual mean wage in Palm Beach County was about $150,000 in 2023, but this will vary by county.  

The law is also limited to covered employees who maintain a primary place of work in Florida, or employers whose principal place of business is in Florida where the at-issue agreement is governed by Florida law.

Key Provisions of the CHOICE Act

 The CHOICE Act sets out remedies and parameters for two types of restrictive covenants—garden leave and noncompete agreements—which are to be enforced as long as certain requirements are met.

• Garden Leave: Garden leave agreements under the CHOICE Act allow employers to restrict covered employees from working for a competitor provided that the employer continues to pay their salary and benefits during this “notice period” that can last up to four years. However, after the first ninety days of the notice period, the covered employee does not have to provide services to the employer. The employer may also reduce the notice period with at least thirty days’ advance notice in writing to the covered employee, and employees can work with another employer during this period with the permission of the employer.
• Noncompete Agreements: Similar to the gardening leave provision, noncompete agreements under the CHOICE Act restrict covered employees from working in a specified geographic area (as defined in the agreement) for up to four years if: (i) the competing employer provides similar services to the former employer, (ii) or it is “reasonably likely” the employee would use the confidential information or customer relationships of the former employer.

 Employers must meet the following requirements for a covered noncompete agreement to be enforceable under the CHOICE Act:

• the employer must advise the covered employee in writing of their right to seek legal counsel prior to entering into the non-compete agreement and provide it at least 7 days before the offer expires;
• the covered employee must acknowledge, in writing, that they will receive confidential information or customer relationships over the course of their employment; and
• the noncompete period is reduced day-for-day by any nonworking portion of the notice period under a covered garden leave agreement, if applicable.

What in the CHOICE ACT is materially different from the existing noncompete statute?

 Injunctive Relief: The CHOICE Act provides robust injunctive relief.  Courts are required to preliminarily enjoin a covered employee from providing their services or business from engaging a covered employee upon application by an employer. The court may only modify or dissolve the injunction if the covered employee establishes by clear and convincing evidence that he or she will not provide “similar” services to a new employer or otherwise use confidential information in violation of the agreement. 

Length of Available Restrictions:  The CHOICE Act provides an unprecedented 4 years of potential restrictions on former employees (or those on garden leave) whereas the current non-compete statute provides a scale of presumptively reasonable temporal limitations providing for only up to 6 months regarding former employees. 

Scope of Covered Employees:  The CHOICE Act is directed at relatively high salaried earners by county.  Depending on the location, the compensation threshold for being a covered employee might range from $80,000 to $150,000.  However, under the current non-compete statute, any employee no matter their wage level might be subject to a restrictive covenant.

Advice to Employers

To take full advantage of the CHOICE Act, employers should consider updating existing non-compete agreements to include required notices and acknowledgements but will still be afforded coverage by one of the strongest non-compete statutes in the country if not.

Although Section 542.335 made the state one of the most employer-friendly jurisdictions for those businesses seeking to enforce non-compete covenants, the CHOICE Act makes momentous changes that make enforcement of such agreements much easier and the restrictions far stronger. Whereas Statute 542.335 sets forth a presumption that any restrictive covenant on an employee lasting six months or less is reasonable, the CHOICE Act permits non-competes of up to four years. Further, the CHOICE Act provides for broad prohibitions on covered employees who may not work for other employers that offer “similar” services to those of the covered employer, or who would be “reasonably likely” to use confidential information or customer relationships of the covered employer.

Yet, if an employer is unable to meet the requirements of the CHOICE Act for enforcement of a non-compete agreement, Statute 542.335 still offers more protections than many other states as long as employers abide its requirements.