Florida's CHOICE Act Strengthens Noncompete Agreements

Florida's CHOICE Act greatly expands employer options for enforcing noncompete agreements. The law will take effect on July 1, 2025, unless Governor Desantis unexpectedly vetos the Act. Employers wishing to benefit from the Act will need to create new noncompete agreements that meet the Act's requirements.

While many states are taking steps to weaken noncompete agreements, Florida's recently passed CHOICE Act bucks the trend by giving employers new options for creating strong noncompete protections when it comes to highly compensated employees.

Covered Employees

The new protections apply to noncompete agreements with employees and independent contractors who earn more than twice the annual mean wages for the relevant county. In Pinellas county, this means employees and contractors who make around $130,000, excluding benefits, commissions and bonuses .

Covered Agreements

The Act's benefits are not automatic. Employers must satisfy several requirements, such as including certain language in the noncompete agreement and giving employees sufficient time to review and consider the agreement before signing.

Employers can only benefit from the CHOICE Act in situations where the former employee/contractor (1) is expected to perform services for their new employer that are similar to services they previously performed for the covered employer or (2) is expected to use the confidential information or customer relationships of the covered employer when working for their new employer.

Significant Changes to Existing Noncompete Laws

The CHOICE Act makes many employer-friendly changes to Florida's existing noncompete laws.

• As discussed in a recent post, employers typically enforce noncompete agreements by asking a court to issue an injunction against the former employee and/or the new employer. Historically, courts have refused to issue an injunction unless the former employer met a high burden. The CHOICE Act flips the burden, effectively making injunctions automatic and putting the onus on the former employee or new employer to challenge the injunction.

• Today, the high legal costs involved in enforcing noncompete agreements dissuade many employers from enforcing them. The CHOICE Act allows employers to recover their legal costs if they successfully enforce a noncompete agreement that meets the Act's requirements.

• Under current law, noncompete agreements are assumed to be reasonable if they are limited to 2 years. The Act extends this period to 4 years for covered agreements.

Next Steps for Employers

The CHOICE Act's new protections are expected to take effect on July 1, 2025, unless Governor Desantis unexpectedly vetos the Act. The Act's benefits are not automatic. While existing noncompete agreements aren't invalidated by the Act, if an employer wants to benefit from the Act they will need to work with legal counsel to create new noncompete agreements that satisfy the Act's prerequisites. Reach out to Gaunce Law for assistance updating your noncompete agreements.