The Contracts Honoring Opportunity, Investment, Confidentiality and Economic Growth Act, commonly known as the CHOICE Act, took effect on July 1, 2025. Supported by Citadel founder and CEO Ken Griffin, the CHOICE Act addresses garden leave for employees and extends eligible non-compete agreements to four years. For both business owners and employees who might be impacted by the legislation, a clear understanding of the provisions of the CHOICE Act is crucial.
How Did the CHOICE Act Change Non-Compete Agreements in Florida?
A non-compete agreement is an employment contract wherein an employee agrees not to work for a competing company or start a competing business for a specified period after leaving their current employer. Prior to the passage of the CHOICE Act, a non-compete agreement was enforceable in the State of Florida if the agreement was reasonable in scope, time, and geographic area and it protected a legitimate business interest. The burden was on an employer to show that a non-compete agreement was both necessary and narrowly tailored to meet the “reasonableness” requirements. The CHOICE Act shifted the burden by creating a presumption that a non-compete agreement is enforceable if it involves a “covered” employee and meets other requirements under the new law.
The primary test used to determine if an employee is “covered” under the CHOICE Act is an income test. Under the Act, employees who earn at least twice the median wage in their respective county are covered and may be constrained by the terms of a non-compete agreement. The employee must also have access to confidential materials or have developed key client relationships during their employment. The law is intended to target employees with access to valuable company data, trade secrets, or significant client relationships, such as those in high-level financial, legal, or corporate roles and while a “covered employee” can include independent contractors it does not include health care practitioners.
A non-compete agreement governed by the CHOICE Act can prevent an individual from working for a direct competitor for up to four years after their employment ends. For a non-compete agreement to be enforceable under the new law, the employee must be given a seven-day review period, and the employer must secure written acknowledgment from the employee regarding access to confidential information or trade secrets.
How Did Garden Leave Change under the CHOICE Act in Florida?
“Garden leave” refers to a period of time during which an employee who has resigned or been terminated remains technically employed by the company but is instructed to stay away from the workplace and refrain from performing any work duties.
The CHOICE Act provides increased structure and clarity for garden leave agreements by specifically extending the “notice” period to four years. Under the new law, a covered employer and a covered employee must provide one another with up to four years of advance notice before terminating their employment relationship. After the first 90 days of the notice period, the employee will remain on the company’s payroll and continue to receive benefits but may be prohibited from accessing sensitive internal information or working for a competing business. For an employer, a garden leave agreement ensures that confidential or sensitive information remains “in-house” for an extended time frame whereas an employee benefits from the compensation requirement in a garden leave agreement during the time that they are prohibited from seeking similar employment elsewhere.
Does the CHOICE Act Apply to All Non-Compete and Garden Leave Agreements in Florida?
While the CHOICE Act does result in important changes to how the law views non-compete and garden leave agreements that do involve “covered” employees in the State of Florida, pre-existing laws relating to such agreements remain applicable for such agreements that do not involve a “covered” employee. It is equally important to understand that the CHOICE Act is not retroactive, meaning that it does not apply to agreements entered into prior to the effective date of the Act (July 1, 2025). For example, the burden remains on the employer to show that a non-compete or garden leave agreement is both necessary and narrowly tailored to meet the “reasonableness” requirements for agreements entered into prior to July 1, 2025 and for agreements entered into after that date that do not involve a “covered” employee.
Florida’s Future under the CHOICE Act
Proponents of the CHOICE Act argue that protecting proprietary trading models, investor data, and other competitively sensitive information is crucial for employers in certain industries, such as private equity, hedge funds, and investment advisory services. Without the protections guaranteed under the Act, Florida would remain at a disadvantage compared to jurisdictions like New York and Connecticut, where strict post-employment restrictions are more common. Moreover, employers argue that by shifting the burden and clarifying terms, the CHOICE Act has created a more stable and secure employment environment which will attract and retain large corporations in the State of Florida.
Critics of the CHOICE Act, on the other hand, argue that the law favors employers and may negatively impact worker mobility, particularly for mid-level employees who are constrained by the terms of a non-compete agreement but who are not protected by a garden leave agreement. These employees may lack the necessary financial flexibility to remain out of work for extended periods, effectively leaving workers on the sidelines of their industry for several years without compensation. This concern is particularly strong in fields where job opportunities are concentrated among a small number of firms. The concern is that prolonged non-compete restrictions could contribute to rising unemployment claims, placing added pressure on the state’s unemployment insurance system.
As businesses and workers alike adjust to the new legal landscape, the long-term impact of the CHOICE Act on the state’s economy, workforce, and business reputation remains to be seen.
