Table of Contents
By: Nicholas Zillier, Esq.
New Legislation: Florida Employment Agreements
Legislation authorizing certain types of employment agreements recently passed in the Florida Legislature; becoming law on July 1, 2025. This legislation created the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act; intended to protect confidential information and business relationships by allowing employers and employees to enter into noncompete and garden leave agreements under certain circumstances.
Background: Noncompete and Garden Leave Agreements
Contracts that restrain trade or competition among businesses are generally unlawful in Florida. Yet, Florida law has long permitted employers and employees to enter into noncompete covenants of reasonable scope and duration. To enforce such covenants, the party seeking enforcement—usually a former employer—must demonstrate to a court that the restriction is justified by a legitimate business interest (i.e., trade secrets or other confidential information, business relationships and goodwill, etc.) When enforcing noncompete covenants, courts will typically place limits on duration and geographic scope to prevent the unreasonable restriction of future employment. So, in practice, a noncompete covenant will usually be effective only for a limited time and within a certain area.
A “garden leave” agreement is a type of employment agreement that involves noncompete covenants. Under a garden leave agreement, an employee remains employed—receiving the same compensation and benefits, but has their access to co-workers and company facilities restricted. An employee on garden leave will also be prohibited from working with competitors. Garden leave agreements are most common in industries that rely on trade secrets or confidential information.
FTC Ruling on Noncompete Agreements
In April of 2024, the Federal Trade Commission (FTC) issued a nationwide ban on all noncompete agreements, which was set to take effect in September of 2024. (See Understanding the New FTC Ruling on Florida Noncompete Agreements by J. M. Jorgensen, published to this site June 14, 2024). This ruling promised to remove the obstacles to employment that are caused by noncompete agreements.
However, this prohibition has not yet taken effect in the State of Florida.
On August 14, 2024, the United States District Court for the Middle District of Florida entered a limited injunction preventing enforcement of the FTC’s new rule—holding that it exceeds the authority granted to the FTC by Congress. Pending further adjudication of the matter, the FTC will have no authority to invalidate noncompete agreements in Florida.
The CHOICE Act was enacted in response to the FTC’s new rule, and represents an effort by the Florida Legislature to preserve certain reasonable noncompete agreements. This is intended to benefit Florida’s businesses by protecting their confidential information and their investment in personnel.
Effect of New Legislation
The CHOICE Act applies to “covered employees,” i.e., any employee or individual contractor who either earns or is reasonably expected to earn a salary greater than twice the annual mean wage, or who has access to his or her employer’s or client’s confidential information or customer relationships (a “covered employer” is any entity or individual who employs or engages a covered employee). Under the CHOICE Act, covered employees and covered employers may enter into covered noncompete or covered garden leave agreements; which are presumed not to violate public policy in Florida. This means that covered noncompete and garden leave agreements will generally be enforced by the Florida courts. To be “covered,” the noncompete or garden leave agreement must meet the criteria set out below.
Covered Noncompete Agreements
A “covered noncompete agreement” cannot exceed 4 years in duration, and must be limited to a specified geographic area. During the agreed-upon noncompete period—which commences upon termination of employment, a covered employee cannot seek employment with any competitor of the covered employer.
Under the CHOICE Act, covered noncompete agreements of limited duration and geographic scope do not violate public policy provided that:
(1) the covered employee was advised to seek counsel in writing;
(2) the covered employee acknowledged the receipt of confidential information or customer relationships in writing; and
(3) the covered noncompete agreement is reduced according to any time spent not working while subject to a covered garden leave agreement (see below).
Courts will enforce covered noncompete agreements by preventing the covered employee from providing services to competitors; unless the covered employee can prove that the covered noncompete agreement should not be enforced.
Covered Garden Leave Agreements
In a “covered garden leave agreement,” the covered employer agrees to provide advance notice (of up to 4 years) before terminating their contract with the covered employee. In exchange, the covered employee agrees not to resign during the “notice period” (from the date of notice to the termination date).
During the notice period, the covered employer retains the covered employee and continues to provide the salary and benefits of employment; although the covered employee need not continue working.
Under the CHOICE Act, covered garden leave agreements do not violate public policy provided that:
(1) the covered employee was advised to seek counsel in writing;
(2) the covered employee acknowledged the receipt of confidential information or customer relationships in writing; and
(3) the agreement provides that:
(a) after the first 90 days of the notice period, the covered employee is not required to provide services to the covered employer;
(b) the covered employee may engage in nonwork activities at any time during the remainder of the notice period;
(c) the covered employee may, with permission from the covered employer, work for another employer during the notice period;
(d) the covered employer may reduce the notice period by providing 30 days’ advance notice in writing.
Courts will enforce covered garden leave agreements by preventing the covered employee from providing services to competitors (and by preventing competitors from engaging the covered employee) during the notice period; unless the covered employee can prove that the covered garden leave agreement should not be enforced.
Practical Implications
Employers who wish to protect their confidential and proprietary information, and anyone seeking employment in roles involving such information, should familiarize themselves with this new legislation before entering into a new employment agreement; as it will impact the rights and remedies available upon termination of employment.
Protect Your Business with Experienced Legal Counsel
Employment agreements involving noncompete and garden leave provisions carry significant legal and financial consequences. Florida’s new CHOICE Act introduces expanded enforcement standards that employers and covered employees should understand before entering into, enforcing, or challenging these agreements.
For tailored legal guidance regarding noncompete agreements, garden leave provisions, or employment contracts governed by Florida law, contact an experienced business law attorney at Scott, Harris, Bryan, Barra & Jorgensen, P.A.
To protect your business interests and ensure compliance with Florida’s evolving employment laws, contact our Palm Beach Gardens office today. Schedule a personalized consultation by calling (561) 624-3900 or completing our online contact form.
