One year ago, Florida enacted the most employer-favorable restrictive covenant statute in the country. The Florida CHOICE Act — the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth Act — became law without Governor DeSantis’s signature on July 3, 2025, and it lets covered Florida employers bind high-earning employees to noncompete or garden-leave restrictions of up to four years, backed by a preliminary injunction the court is directed to enter. A year in, the practical questions have shifted from “is this real?” to “who should use it, for whom, and how do we draft it without losing the old tools we already had?”
What the Florida CHOICE Act Actually Created
Codified at sections 542.41 through 542.45 of the Florida Statutes (with a constitutional effective date of August 15, 2025), the CHOICE Act did not replace Florida’s existing restrictive covenant statute, section 542.335. It layered two new, opt-in instruments on top of it, available only for a defined slice of the workforce.
A covered garden leave agreement keeps the employee on payroll — base salary and benefits continuing — for a notice period of up to four years, during which the employee cannot work for anyone else without permission; after the first 90 days, the employer can relieve the employee of duties entirely. A covered noncompete is closer to the traditional form: a post-separation restriction of up to four years, with the twist that the restricted period is reduced day-for-day by any nonworking notice period served under a garden leave arrangement.
Both instruments carry procedural formalities: the agreement must be in writing, the employee must be advised in writing of the right to consult counsel and given at least seven days to review before signing, and the employee must acknowledge in writing receipt of confidential information or customer relationships.
Who Is a “Covered Employee”
The statute applies only to employees or contractors who earn — or are reasonably expected to earn — a salary greater than twice the annual mean wage of the Florida county where the employer has its principal place of business (or, for out-of-state employers, the county where the employee resides). Depending on the county, that threshold generally lands between roughly $80,000 and $150,000. And salary means base compensation: discretionary bonuses, commissions, and tips are excluded, as are healthcare, retirement, and severance benefits — though the fair market value of noncash perks counts. Licensed health care practitioners are excluded from the Act entirely.
That definition does real sorting work in a Florida organization. The engineering lead in a Miami office clears the bar; most of the sales team, whose W-2s are commission-heavy, may not — no matter what their total comp says.
The Remedy Is the Point
What makes the Florida CHOICE Act different from every other state’s noncompete regime is not the four-year outer limit; it is the enforcement mechanics. On application by the employer, a court must preliminarily enjoin a covered employee from working for a competing business during the restricted period. The burden then shifts: the injunction can be modified or dissolved only if the employee (or the new employer) establishes, by clear and convincing evidence, statutory off-ramps — for example, that the new role does not involve similar services or the use of the old employer’s confidential information, or that the employer failed to pay the promised consideration. The statute also shifts attorney’s fees and costs to the prevailing party — which, given the injunction-first posture, will usually be the employer.
Compare that to section 542.335 practice, where the employer carries the burden of proving a legitimate business interest and reasonable scope before an injunction issues. The CHOICE Act flips the sequencing: restraint first, litigation second. That is exactly why it should be deployed deliberately rather than pushed through the whole org chart.
One Year In: How Florida Employers Are Actually Using It
A year of drafting and counseling has produced a fairly consistent playbook:
- Tiering, not blanketing. CHOICE agreements go to the handful of people whose departure genuinely moves enterprise value — C-suite, technical founders’ lieutenants, key rainmakers who clear the salary test — while everyone else stays on conventional section 542.335 covenants.
- Garden leave as the premium option. Four years of salary continuation is expensive, so garden leave terms cluster shorter, with the day-for-day credit against a paired noncompete doing the tail work.
- Formalities as the failure point. The seven-day review window and the advice-of-counsel notice are cheap to satisfy and fatal to skip; onboarding packets sent the night before a start date are how CHOICE agreements die.
- Choice-of-law reach. The Act contemplates covered agreements for out-of-state employers with Florida-resident covered employees, which has made Florida choice-of-law and forum clauses a live drafting question for multistate companies — and a fight other states’ courts will not always concede.
The M&A Angle: Retention and Diligence Both Changed
For acquirers of Florida businesses, the CHOICE Act cuts in two directions.
On the retention side, it is a gift. The classic post-closing problem — the seller’s key employees walk into a competitor six months after the earnout starts — now has a stronger answer for employees who clear the salary threshold: a CHOICE-compliant noncompete or garden leave signed at closing as a condition of the employment offer, with consideration and formalities documented. Note that covenants sold with the business itself — the founder’s own sale-of-business noncompete — remain governed by section 542.335, which independently allows longer restrictions for sellers of an enterprise.
On the diligence side, CHOICE agreements are now an asset to inventory. A target that holds four-year covenants over its critical engineers is more valuable, and more defensible, than one running on unsigned offer letters — but only if the agreements were executed with the statutory formalities. Buyers should pull the actual signed packets, check the seven-day and advice-of-counsel mechanics, confirm the salary test was met at signing, and remember that in an asset deal, covenants do not ride along automatically.
What Is Still Unsettled
A year in, the interpretive case law is still thin, and no court has struck the statute down. The Act’s signature mechanics — the mandatory preliminary injunction and the clear-and-convincing standard for dissolving it — have yet to be squarely tested in Florida’s appellate courts, so much of the confidence around the Act still rests on its text rather than on a body of decisions applying it. The most-watched open question is choice of law: commentators broadly expect that when a Florida employer tries to enforce a CHOICE agreement against a worker who lives and works in a state hostile to noncompetes, that worker’s home-state court may decline to apply Florida law — a clash that has not yet produced definitive rulings. Employers should treat the Act as powerful but young: draft to the letter of the formalities, and keep a conventional section 542.335 covenant in the same agreement as a fallback tier.
Practical Takeaways for Florida Employers and Buyers
- Identify your true covered population — salary alone, county-by-county — before promising anyone a four-year restraint; commission-heavy comp structures quietly fail the test.
- Never skip the formalities: written agreement, written advice-of-counsel notice, seven days to review, written acknowledgment of confidential information access.
- Pair instruments: garden leave for the shortest business-critical window, a covered noncompete with day-for-day credit behind it, and a section 542.335 covenant as the fallback tier in the same document.
- In deals, sign CHOICE-compliant agreements at closing for key retained employees who clear the threshold, and diligence the target’s existing covenants for formality defects.
- Budget for the restraint you are buying: garden leave means paying salary and benefits for the privilege, and an injunction-first statute invites litigation you should be prepared to win on paper.
Talk to Florida Employment and Deal Counsel Before You Deploy It
Montague Law advises Florida businesses, founders, and acquirers on restrictive covenant strategy, executive agreements, and the employment dimensions of M&A — from offices in Fernandina Beach and Coral Gables, serving clients statewide. If you are deciding who in your organization should hold a CHOICE Act agreement, or evaluating a target’s covenant stack, call 904-234-5653 or schedule a consultation.
Frequently Asked Questions
What is Florida’s CHOICE Act?
The CHOICE Act — codified at sections 542.41–542.45 of the Florida Statutes and enacted in 2025 — is a Florida statute that makes noncompete and garden-leave agreements of up to four years enforceable against “covered employees,” high earners whose salary exceeds twice the annual mean wage of the relevant Florida county, with courts directed to enter preliminary injunctions against violations.
Who qualifies as a covered employee under the CHOICE Act?
An employee or contractor earning (or reasonably expected to earn) a salary greater than twice the annual mean wage of the county where the employer’s principal Florida office is located (or, for out-of-state employers, the county where the employee resides), excluding discretionary pay like bonuses, commissions, and tips. Licensed health care practitioners are excluded.
Does the CHOICE Act replace Florida’s existing noncompete law?
No. Section 542.335 still governs restrictive covenants for everyone who is not a covered employee, and it continues to govern sale-of-business noncompetes. The CHOICE Act adds an opt-in framework with stronger enforcement for qualifying agreements.
What formalities does a CHOICE Act agreement require?
The agreement must be in writing, the employee must receive written notice of the right to consult counsel and at least seven days to review before signing, and the employee must acknowledge in writing access to confidential information or customer relationships. Skipping these formalities forfeits the Act’s protections.
How does the CHOICE Act affect buying a Florida business?
Buyers can sign CHOICE-compliant agreements with key retained employees at closing for stronger post-closing retention, and should diligence the target’s existing covenants — confirming salary thresholds and formalities were met, and remembering that covenants generally do not transfer automatically in an asset deal.
This article is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Consult a licensed attorney about your specific situation.
