Florida noncompete law now even more “obnoxious”

In 2015, in Brown & Brown, Inc. v. Johnson, the New York Court of Appeals (the highest court in New York) called Florida’s noncompete law “truly obnoxious.”

The court explained:

While parties are generally free to reach agreements on whatever terms they prefer, courts will not enforce agreements where the chosen law violates some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal. This public policy exception is reserved for those foreign laws that are truly obnoxious. The party seeking to invoke the exception bears a heavy burden of proving that application of the chosen law would be offensive to a fundamental public policy of this State.

(All quotation marks, citations, and other edits removed.)

After comparing Florida’s “nearly-exclusive focus on the employer’s interests, prohibition against narrowly construing restrictive covenants, and refusal to consider the harm to the employee,” the court found that Florida’s restrictive covenant law offends New York public policy.

Well, if New York’s public policy was offended before, just you wait.

Florida’s new noncompete law

As expected, on July 3, 2025, Florida Governor Ron DeSantis allowed the “Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act” to pass into law. The Act, which will not only add insult to injury to New York’s public policy, is sure to offend every other state’s public policy as well.

Specifically, the new law allows garden leave clauses (“true” garden leave clauses¹) and “covered” noncompetes to continue for four years. No, that’s not a typo. Four years. In fact, when I read it (the first three or four times), I was convinced that I was either misreading it or the legislature could not have meant it to say what it says. But the fact that Governor DeSantis signed it, suggests that it says what it means and means what it says.

Legislative findings supporting the rule

In that regard, we should pause to consider the Legislative Findings — which are directly contrary to the findings in the FTC’s noncompete rule:

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. Therefore, the Legislature determines and declares that this part fulfills an important state interest.

I cannot say I entirely disagree with those findings, but as will many things (the FTC’s noncompete rule included), it goes too far (in my opinion).

Details of the rule

Before turning to the specific types and requirements of the agreements covered by the statute, there are a few key definitions to keep in mind:

“Annual mean wage of employees in Florida” or “annual mean wage” means the most recent annual mean wage as calculated by the United States Department of Labor Bureau of Labor Statistics, or its successor calculation, for all occupations in this state.

“Covered employee” means an employee or individual contractor who earns or is reasonably expected to earn a salary greater than twice the annual mean wage of the county in this state in which the covered employer has its principal place of business, or the county in this state in which the employee resides if the covered employer’s principal place of business is not in this state. The term does not include a person classified as a health care practitioner as defined in s. 456.001.

Also, note that the rule allegedly went into effect on July 1, 2025, even though it did not become a law until July 4. We’ll see how that shakes out.  

While there are other definitions and details, the important ones are discussed below.

Covered garden leave agreements

Companies can require “covered employees” to provide up to four years notice “before terminating the employment or contractor relationship.”

Any agreement requiring such notice (called a “covered garden leave agreement”) must:

• be in writing;
• provide that the employee and employer “agree to up to, but no more than, 4 years of advance, express notice before terminating the employment or contractor relationship”;
• contain the employee’s agreement “not to resign before the end of such notice period”; and
• contain the employer’s agreement to “retain the covered employee for the duration of such notice period and to continue paying the covered employee the same salary and providing the same benefits that the covered employee received from the covered employer in the last month before the commencement of the notice period”; and
• provide as follows:
  • 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 employee may, with the permission of the employer, work for another employer while still employed by the employer during the remainder of the notice period; and
  • the notice period may be reduced by the employer by providing (at least) 30 days’ notice in writing to the employee.

The employer is not, however, “obligated to provide discretionary incentive compensation or benefits or have the covered employee continue performing any work during the notice period.”

The employee must work primarily in Florida (meaning the employee spends more work time in Florida than in any other work location) or the employer’s principal place of business must be in Florida, in which case the agreement must also specify that Florida law will govern the agreement.

The employer must also advise the employee, “in writing, of the right to seek counsel before execution of the covered garden leave agreement” and must provide the agreement to the employee at least seven days before the offer (or employment or the agreement) expires.

And the employee must acknowledge, “in writing, receipt of confidential information or customer relationships.”

Covered noncompetes

“Covered noncompete agreements” (as opposed to any other noncompetes) are those noncompetes “between a covered employee and a covered employer in which, for a period not to exceed 4 years and within the geographic area defined in the agreement, the covered employee agrees not to assume a role with or for another business, entity, or individual: (a) In which the covered employee would provide services similar to the services provided to the covered employer during the 3 years preceding the noncompete period; or (b) In which it is reasonably likely the covered employee would use the confidential information or customer relationships of the covered employer.”

The balance of the basic requirements of garden leave are applicable to noncompetes, except that covered noncompetes do not appear to require a payment during the term.

However, a covered noncompete must provide “that the noncompete period is reduced day-for-day by any nonworking portion of the notice period, pursuant to a covered garden leave.”

Mandatory preliminary injunction

The statute requires courts to enforce covered garden leave agreements and covered noncompetes through preliminary injunctions.

Further, the court can only modify or dissolve the injunction for certain limited reasons, which the employee or new employer must establish by clear and convincing evidence.

Other remedies

The statute also makes clear that the injunctive relief “is not an exclusive remedy, and a prevailing covered employer is entitled to recover all available monetary damages for all available claims.”

Further, “if the covered employee engages in gross misconduct against the covered employer, the covered employer may reduce the salary or benefits of the covered employee or take other appropriate action during the notice period, which reduction or other action may not be considered a breach of the covered garden leave agreement.” The equivalent option applies to noncompetes.

In perhaps the only nod to employee rights, the statute provides that “the prevailing party is entitled to reasonable attorney fees and costs.”

Takeaways

This feels like a watershed moment like the 2014 Jimmy John’s noncompete debacle that really kicked the whole noncompete reform effort into high gear.

Accordingly, while companies will be able to take advantage of this new law starting on July 1, 2025, I would not be surprised if the FTC makes an example of out of some companies taking advantage of the new law for employees who just pass the wage threshold.

Similarly, I would not be surprised to see other states mandating that their law relating to restrictive covenants govern all contracts with employees in their states, or to see courts in those states invalidating any choice of law and choice of forum clauses calling for Florida law. 

Nor would I be surprised to see Congress push forward with legislation limiting the use of noncompetes. I don’t think Congress would ban noncompetes, despite the perennial bill to do so, but I could see progress on a bill prohibiting noncompetes for nonexempt employees under the Fair Labor Standards Act. Recall that Marco Rubio had proposed such a bill when he was a Senator.  

We shall see.

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*A huge thank you to Erika Hahn for all of her extraordinary help in tracking and monitoring all of the recent legislative developments.