Client Alert: Florida’s Proposed CHOICE Act—Pending Legislation Reinforces State’s Business-Friendly Legal Environment

Florida has long been recognized as a business-friendly jurisdiction, particularly in the area of employment law and the enforcement of restrictive covenants. The Florida Legislature recently enacted the “Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act.” The law further solidifies Florida’s reputation as a favorable venue for employers seeking to protect their investments in personnel, confidential information, and client relationships. The CHOICE Act, Florida Statutes (sections 542.41–542.45), builds upon the state’s existing statutory framework, including section 542.335, to provide enhanced clarity and predictability for businesses operating in Florida.

Key Provisions of the Proposed CHOICE Act

• Garden Leave and Noncompete Agreements: The CHOICE Act would expressly authorize and enforce “covered garden leave agreements” and “covered noncompete agreements” for certain high-earning employees and contractors. These agreements would not be considered unlawful restraints of trade or attempts to monopolize commerce, provided statutory requirements are met.
• Notice and Procedural Safeguards: Employers would be required to provide written notice to employees of their right to seek counsel before executing such agreements and must give at least seven days’ notice before an offer expires. Employees must also acknowledge, in writing, their access to confidential information or customer relationships.
• Enforceability and Remedies: Courts would be required to issue preliminary injunctions to enforce covered agreements, with limited grounds for modification or dissolution. Prevailing employers would be entitled to recover all available monetary damages, as well as reasonable attorney fees and costs.
• Flexibility and Fairness: The Act would allow for the reduction of salary or benefits in cases of gross misconduct by the employee, without constituting a breach of the agreement. Employers could also shorten notice periods with appropriate advance notice.
• Exclusions: The Act would not apply to health care practitioners as defined in section 456.001, Florida Statutes.

Garden leave agreements are “covered” if they require no more than 4 years advance notice by the employee before terminating an employment relationship, and the employer retains the employee for the entire notice period and continues the employee’s salary and benefits from the month immediately preceding the notice.  Importantly, employers need not continue any discretionary incentive compensation or benefits during the notice period to receive the benefits of the statute, although they would still be required to honor any contractual agreement to provide those benefits.

Similarly, a noncompete agreement is “covered” if the non-compete period lasts no longer than four years, and during that time restricts the employee from either (1) providing similar services to another business, or (2) seeking employment in which it would be reasonably likely that the employee would need to use the employer’s confidential information or rely on customer relationships of the employer.

Changes From Existing Law

Section 542.335, Florida Statutes, previously governed the enforceability of restrictive covenants in Florida, providing a robust framework for the protection of legitimate business interests, including trade secrets, confidential business information, and substantial relationships with customers. Under section 542.335:

• Restrictive covenants are enforceable if they are reasonable in time, area, and line of business.
• Courts may modify overly broad covenants to render them enforceable.
• The statute provides for the award of attorney fees to prevailing parties.

Unlike many other states in which non-competes are viewed with skepticism by Courts and presumed to impose a burden on the employee, Section 542.335 specifically instructs Courts not to favor either the employee or the employer in evaluating the reasonableness of a noncompete agreement.  The proposed CHOICE Act would not displace section 542.335; rather, it would create a parallel, more predictable regime for certain high-level employees and contractors for specific agreements. Section 542.335 would continue to govern other restrictive covenants that do not meet the CHOICE Act’s definitions.

Florida’s Business-Friendly Approach

The CHOICE Act, together with section 542.335, demonstrate Florida’s ongoing commitment to fostering a legal environment that encourages investment, innovation, and the protection of business interests. Key features of Florida’s approach include:

• Predictability: The CHOICE Act would mandate enforcement of covered agreements according to their terms, reducing uncertainty for employers; and
• Flexibility: Employers would retain the ability to tailor agreements to their business needs, with statutory guidance on enforceability.

Implications for Employers

Employers operating in Florida or considering expansion into the state should consider the additional tools for protecting confidential information and client relationships available here, particularly for high-earning employees and contractors. Employers should be prepared to review and update their employment agreements to ensure compliance with any new notice and procedural requirements.

Florida continues to distinguish itself as a premier venue for businesses seeking to protect their competitive advantages through enforceable employment agreements. The CHOICE Act, in conjunction with the existing statutory framework, offers clarity, predictability, and strong legal protections for employers, reinforcing Florida’s status as a business-friendly state.

Rimôn attorneys Christopher Kelly and Tara Humma regularly advise clients on drafting and enforcement of non-compete, garden leave, non-solicit, non-disclosure, and other restrictive covenant agreements, litigate high-stakes disputes arising from those agreements, and consult on the hiring of employees subject to restrictions.  Please reach out to us if we can assist you on matters relating to employee-mobility and protection of confidential information and trade secrets.

This summary is provided for informational purposes only and is not intended to constitute legal advice nor does it create an attorney-client relationship with Rimon, P.C. or its affiliates.

Chris Kelly has extensive experience representing both public and private employers. He regularly litigates complex employment matters, including discrimination, restrictive covenant, employee raiding/mobility, and employment-related trade secret matters in state and federal courts across the country. He also represents clients in state and federal wage and hour audits, conducts employment-related due diligence in mergers and acquisitions, assists clients in handling reductions in force, represents management in grievance arbitrations, conducts internal investigations, drafts uniform employment policies for employers on training, leave, and other requirements of multiple states, and drafts physician and executive compensation agreements. Read more here.

Tara Humma is a Litigation attorney who focuses her practice on labor and employment matters. Tara has over a decade of experience representing public and private employers of all sizes in states across the country. Tara represents clients in all phases of employment litigation, from initial pleadings, discovery, and motion practice to trial preparation and appeals. Her experience includes a broad range of litigation matters including, but not limited to, claims brought under Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA) (including accessibility cases), the Family and Medical Leave Act (FMLA), the Fair Labor Standards Act (FLSA), breach of contract cases related to employment contracts and restrictive covenants and various other state and federal employment laws. Read more here.