Over the past few years, there has been a national trend to eliminate or weaken non-compete contracts for employers.
Last year, we wrote several articles about how the Federal Trade Commission under the Biden administration eliminated non-compete contracts and was then blocked by the federal courts from eliminating them.
At the time, the Federal Trade Commission said non-compete contracts kept wages low, stifled innovation and increased prices for consumers. Many states have agreed and started lowering their enforceability.
Not Florida.
This past legislative session, the State of Florida said it disagreed. In House Bill 1219, known as the CHOICE Act is said just about the opposite. In the bill, they said:
“The Legislature finds that a proper and legitimate state interest is served by enforcing strong legal protections in contracts between employers and contracted personnel, which encourage optimal levels of information sharing and training and development.
The Legislature further finds that alternative means of protecting confidential information and client relationships, such as nondisclosure agreements, fixed-duration term contracts, and nonsolicitation clauses in employment contracts, are inadequate to protect against the significant global risks faced by companies in this state. The Legislature further finds that predictability in the enforcement of contracts described in this part encourages investment in this state.”
With this new legislation affecting nearly all Florida businesses, it is important that all employers, including those who work with independent contractors, review their non-compete contracts and garden-leave agreements as soon as possible to ensure they are covered by the new laws and regulations.
The attorneys at The Orlando Law Group specialize in helping businesses with employer issues in Orlando, Sanford, Winter Garden and Kissimmee. When it comes to homeowners facing construction liens, an attorney is essential.
Differences in non-compete contracts and garden-leave agreements
Most people understand what a non-compete contract covers. Even if they have never been in a position where they could cause damage to a company by working with a competitor, they are familiar with the concept.
But in basic terms, a non-compete prevents an employee or contractor from using the information they learned at a company when working for another company. Generally, it prevents the employee or contractor from working for a direct competitor for an agreed-upon amount of time, sharing company secrets or approaching a company’s clients.
A garden-leave agreement takes it a step further. In that agreement, the employer agrees to continue paying the employee or contractor during that period when they cannot work for a direct competitor.
Neither of these is required by law, but they are options that companies use to protect themselves. Of course, the employee or contractor has to agree to the terms of the contract to be in effect. However, the choice is to sign the contract or not accept the job offer.
Who does this apply to?
One of the key parts of the CHOICE Act was expanding what types of employees would be covered by these types of agreements.
Perhaps the biggest change was that employers needed to prove there was a “legitimate business interest” in the past to have a non-compete contract. This was defined in statute as including, but not limited to,
- Trade secrets, as defined in s. 002(4).
- Valuable confidential business or professional information that otherwise does not qualify as trade secrets.
- Substantial relationships with specific prospective or existing customers, patients, or clients.
- Customer, patient, or client goodwill associated with:
- An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress”;
- A specific geographic location; or
- A specific marketing or trade area.
- Extraordinary or specialized training.
All of that is gone now, including the clause looking at a specific geographic location.
Now, an employer does not have to show any particular reason or limit the contract to a specific area by law. Of course, these could be negotiated, but they are not required by law.
In fact, the only thing that is required by law to determine eligibility is the amount of compensation the employee or contractor receives. Now, to qualify, the employee or contractor must earn double the annual mean wage of the county where the business is located or where the employee lives, if the company is headquartered outside of Florida.
That does not include special benefits or perks often considered in compensation package.
In the Orlando Metropolitan Statistical Area, that puts the threshold at $58 per hour or around $120,000 a year. Any employee making less than that cannot have either agreement, but any employee or contractor above that amount can.
The only exception? Healthcare professionals. They were excluded from these rules by the Florida Legislature.
The details matter for employers
While the new rules apply to more employees and contractors, it is important that businesses follow state laws when it comes to these types of agreements for them to be valid.
With this new law, employers must do the following for non-compete contracts according to the statute:
A covered employee was advised, in writing, of the right to seek counsel before execution of the covered noncompete agreement and was provided notice as described in subsection (3);
- A covered employee acknowledges, in writing, that in the course of his or her employment, the covered employee will receive confidential information or customer relationships; and
- A covered noncompete agreement provides that the noncompete period is reduced day-for-day by any nonworking portion of the notice period, pursuant to a covered garden leave agreement between the covered employee and the covered employer, if applicable.
The notice required in subsection (3) must be given at least seven days before the employment offer expires.
Those same rules apply to garden-leave agreements, with a couple of additional rules that must be part of the agreement:
- After the first 90 days of the notice period, the covered employee does not have to provide services to the covered employer;
- The covered employee may engage in nonwork activities at any time, including during normal business hours, during the remainder of the notice period;
- The covered employee may, with the permission of the covered employer, work for another employer while still employed by the covered employer during the remainder of the notice period; and
- The garden leave agreement notice period may be reduced during the notice period if the covered employer provides at least 30 days’ advance notice in writing to the covered employee
In addition, the length of these contracts was extended from two years to four years. That does not mean they have to be for that long, but it is an option for employers now.
The biggest change, however, may be how these are enforced. If an employer learns a former employee or contractor is breaking the terms of the agreement, the courts are required to issue a preliminary injunction.
The burden is on the employee or contractor to prove they were not breaking the terms of the contract to end the injunction.
They must establish “by clear and convincing evidence, based on nonconfidential; information, that:
- The covered employee will not perform, during the noncompete period, any work similar to the services provided to the covered employer during the 3-year period preceding the commencement of the noncompete period, or use confidential information or customer relationships of the covered employer;
- The covered employer has failed to pay or provide the consideration provided for in the covered noncompete agreement and has had a reasonable opportunity to cure the failure; or
- The business, entity, or individual seeking to employ or engage the covered employee is not engaged in, and is not planning or preparing to engage in during the noncompete period, business activity similar to that engaged in by the covered employer in the geographic area specified in the noncompete agreement.”
If those three points are not proven by the employee or contractor, they are on the hook for the company’s legal fees and other damages.
What about current employees and contractors under CHOICE Act
If you already have non-complete contracts and garden-leave agreements in place, the new statute allows you to include these new terms in covered agreements, provided you gave the seven-day notice allowing the employee to seek legal counsel about the contracts.
However, the revised statute does not address current non-compete contracts for employees making less than twice the average mean salary or for existing contracts for health care professionals.
Without explicit guidance from the statutes, it is assumed that those are still valid and enforceable under the existing law.
The attorneys at The Orlando Law Group help with all types of legal issues for businesses in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.
If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.
Last Updated on July 28, 2025 by The Orlando Law Group
