Legislative lowdown: Florida noncompete bill would significantly expand employers’ rights

A Florida bill set to take effect on July 1 would extend the window during which employers can enforce noncompete agreements for up to four years.

The legislation, which awaits Gov. Ron DeSantis’s signature and is called the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act, will give Florida employers the ability not only to impose longer noncompete agreements, but also make it easier to enforce them. In addition, it applies to “garden leave” agreements, which require workers to remain on the payroll of their current employer for a certain period of time before leaving for a new job.

This expected change to Florida employment law comes as other states have gone the opposite direction and moved to restrict noncompete agreements over concerns they limit workers’ earning potential and freedom of movement, while also stifling innovation.

Noncompete agreements may prohibit workers from going to work for a competing company for a certain period of time, as well as starting a competing business or recruiting workers from a previous company to work for that business.

How Florida’s noncompete law would work. The bill, which the Florida legislature passed on April 24, applies to employers or contractors that are “reasonably expected” to earn more than twice the annual mean wage of the Florida county where they’re based. If the employer isn’t based in Florida, an employee living in the state may still be covered by the legislation.

Should Gov. DeSantis sign the bill into law, it will raise the amount of time employers can enforce noncompete or garden leave agreements from two to four years. This is well beyond what’s typical in the US, where a standard noncompete agreement often lasts anywhere from six months to two years. .

The legislation states that employees must be given at least seven days to review any potential noncompete or garden leave agreements in order for them to be enforceable. Covered employees must also acknowledge in writing that they’ve been privy to confidential information or customer relationships.

Should it take effect, the Florida law will strictly enforce these agreements. The courts will be required to issue preliminary injunctions to enforce noncompetes unless the affected employee can prove any of the following:

• they won’t perform “any work similar to the services provided to the covered employer or use confidential information or customer relationships of the covered employer,”
• their employer has not paid them during the period when such an agreement is enforced,
• a potential employer they want to work for isn’t a direct competitor of the employer enforcing the noncompete.

Similar rules will apply for garden leave agreements.

Bucking a trend. Four states across the political spectrum—California, North Dakota, Minnesota, and Oklahoma—ban noncompete agreements entirely, according to tracking by the Economic Innovation Group. Other states have passed laws prohibiting the use of noncompetes in certain industries, such as healthcare, or banning them for workers who fall below a certain income threshold.

The Biden administration sought to ban most noncompete agreements through a Federal Trade Commission rule issued in April of last year, but a federal judge in Texas later blocked the ban from taking effect.

Even if they’re legal, enforcing noncompete agreements isn’t always a viable retention strategy, experts told HR Brew in January.

“As an employer, I want volunteers, not hostages. At companies that retain people via better wages, a better culture, better working conditions, these are organizations that consistently outperform their peers,” said Joe Mull, keynote speaker and author of Employalty: How to Ignite Commitment and Keep Top Talent in the New Age of Work.