Consumer Protection
Restrictive Covenant & CHOICE Act Matters
Florida’s Restrictive Covenant Statute (Fla. Stat. § 542.335) and the CHOICE Act (§§ 542.41–542.45) — Where Employers and Employees Stand
Restrictive covenants are contractual provisions that limit what an employee, contractor, or business partner may do during or after a relationship ends — non-competition and non-solicitation covenants, confidentiality and non-disclosure obligations, and non-disparagement clauses among them. Because they range so widely and are signed under such different bargaining conditions, they have always been regulated: since the nineteenth century American courts have enforced them only where reasonable, and in the last decade state legislatures and the Federal Trade Commission have moved aggressively — and in opposite directions — to redraw the line between protecting a business’s investment and preserving a worker’s mobility. Florida has chosen its direction. Its restrictive covenant statute was already among the most employer-friendly in the country, and on July 1, 2025, the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act layered on top of it a regime for high-earning employees that permits four-year non-competes and garden leave, makes preliminary injunctions mandatory, and shifts the burden of dissolving them to the employee.
Our Miami intellectual property attorneys draft, negotiate, enforce, and defend restrictive covenants on both sides — for employers protecting trade secrets, customer relationships, and confidential information, and for executives, engineers, salespeople, and founders deciding whether to sign, how to leave, and what a covenant will actually cost them.
How Florida Governs Restrictive Covenants: § 542.335
Reasonableness, a writing, a legitimate business interest — and a statute that tilts toward enforcement
Under § 542.335, a restrictive covenant is enforceable if it is set forth in a writing signed by the person against whom enforcement is sought, is reasonably necessary to protect one or more legitimate business interests, and is reasonable in time, area, and line of business. The statute defines legitimate business interests to include trade secrets; valuable confidential business or professional information that does not otherwise qualify as a trade secret; substantial relationships with specific prospective or existing customers, patients, or clients; customer goodwill associated with a trade name, trademark, geographic location, or marketing or trade area; and extraordinary or specialized training. A covenant not supported by such an interest is unlawful and void.
Each requirement carries its own sub-rules, and nearly all of them favor the party seeking enforcement. If a court finds a restraint overbroad, overlong, or otherwise unreasonable, it must modify the restraint and grant only the relief reasonably necessary — Florida’s “blue pencil” rule — rather than strike it (§ 542.335(1)(c)). The violation of an enforceable covenant creates a presumption of irreparable injury, so a temporary injunction may issue before the merits are heard, on the posting of a proper bond (§ 542.335(1)(j)). A court may not consider individualized economic or other hardship to the person against whom enforcement is sought (§ 542.335(1)(g)), may not construe the covenant narrowly against the drafter, and must enforce it in favor of an expressly identified third-party beneficiary, assignee, or successor (§ 542.335(1)(f)). Duration is governed by rebuttable presumptions: for a former employee, a restraint of six months or less is presumed reasonable and one of more than two years unreasonable; for the seller of a business, the presumptions run to three and seven years; and for a restraint protecting a trade secret, to five and ten years (§ 542.335(1)(d)–(e)). The prevailing party recovers attorney’s fees (§ 542.335(1)(k)).
| Provision | What § 542.335 Says | Why It Matters |
|---|---|---|
| Writing — (1)(a) | The covenant must be in a writing signed by the person against whom enforcement is sought. | Handbook policies and unsigned offer letters do not qualify. |
| Legitimate business interest — (1)(b) | Trade secrets; valuable confidential information; substantial customer relationships; goodwill tied to a mark, location, or trade area; specialized training. | The pleading and proof requirement that defeats most overreaching covenants; a covenant untethered to an interest is void. |
| Reasonableness and modification — (1)(c) | The restraint must be reasonably necessary in time, area, and line of business; an overbroad restraint is modified, not voided. | Employers may draft broadly with limited downside; employees rarely escape a covenant entirely. |
| Duration presumptions — (1)(d)–(e) | Employee: 6 months reasonable / more than 2 years unreasonable. Seller of a business: 3 / 7 years. Trade-secret restraint: 5 / 10 years. | The two-year employee presumption is the baseline the CHOICE Act doubles for covered employees. |
| No hardship defense — (1)(g) | Courts may not consider individualized economic or other hardship to the restricted party. | The employee’s inability to earn a living in the field is not a defense. |
| Injunction — (1)(j) | Violation creates a presumption of irreparable injury; temporary injunction available on proper bond. | The employer’s principal remedy; the bond is the employee’s principal protection. |
| Third parties — (1)(f) | Expressly identified third-party beneficiaries, assignees, and successors may enforce. | Covenants survive acquisitions if drafted to. |
| Attorney’s fees — (1)(k) | Prevailing party recovers reasonable attorney’s fees and costs. | Two-way exposure that shapes settlement on both sides. |
This framework tilts strongly toward enforceability compared with most of the country. Four states — California, North Dakota, Oklahoma, and Minnesota — ban employee non-competes outright, a growing group (including Washington, Oregon, Colorado, Illinois, Virginia, Maryland, Maine, New Hampshire, and Rhode Island) bars them below income thresholds, and others impose notice, consideration, or duration limits. The Federal Trade Commission’s 2024 rule that would have banned nearly all non-competes nationwide was set aside in Ryan LLC v. FTC (N.D. Tex. Aug. 20, 2024); the Commission abandoned its appeal in September 2025, formally removed the rule from the Code of Federal Regulations in February 2026, and now polices non-competes through case-by-case enforcement against employers whose covenants it views as unfair methods of competition. Against that trend, Florida has moved the other way.
The CHOICE Act: Covered Employees, Covered Agreements & Mandatory Injunctions
Chapter 2025-213, Laws of Florida — effective July 1, 2025, for agreements entered on or after that date
The Legislature passed CS/CS/CS/HB 1219 on April 24, 2025 (91–21 in the House, 28–9 in the Senate), and it became law without the Governor’s signature on July 3, 2025, as Chapter 2025-213, codified at §§ 542.41–542.45. The Act declares that covered garden leave and covered non-compete agreements are not restraints of trade, and it creates a parallel regime for a defined class of high-earning workers that operates alongside — not in place of — § 542.335. Agreements with employees below the wage threshold, with licensed health care practitioners, and every agreement entered before July 1, 2025, remain governed by the traditional statute.
Who is covered
A covered employee is an employee or individual contractor who earns, or is reasonably expected to earn, a salary greater than twice the annual mean wage of the Florida county in which the covered employer has its principal place of business — or, if the employer’s principal place of business is outside Florida, the county in which the employee resides (§ 542.43). Salary excludes discretionary bonuses, commissions, and benefits, so a heavily commissioned salesperson may fall outside the definition even with substantial total earnings. Licensed health care practitioners under § 456.001 are excluded and remain subject to § 542.336. A covered employer is any person or entity that employs or engages a covered employee. Because the threshold is keyed to county mean wages published by the Department of Commerce, it varies — roughly $80,000 in rural counties to more than $150,000 in Miami-Dade, Palm Beach, and the Tampa and Orlando metropolitan counties — and it moves each year with the data.
The definition makes the employer the reference point. An employer chooses the county whose wage data sets the threshold by deciding where to headquarter; an out-of-state employer can review county wage data before making an offer and structure a salary that brings an otherwise non-covered employee into the regime; and a remote employee’s threshold is set by the county he or she happens to live in. The threshold is not a fixed dollar amount but a function of geography, which will become a negotiation point in every executive hire.
The two covered agreements
| Requirement | Covered Garden Leave Agreement — § 542.44 | Covered Non-Compete Agreement — § 542.45 |
|---|---|---|
| What it is | A written agreement under which the covered employee must give up to four years’ advance notice before employment ends and, during that notice period, remains employed and paid but need not — after the first 90 days — perform any work. | A written agreement under which the covered employee agrees, for up to four years after employment ends, not to provide services similar to those provided to the covered employer to another business within a defined geographic area, where it is reasonably likely the employee would use the employer’s confidential information or customer relationships. |
| Formalities | Employee advised in writing of the right to consult counsel; at least seven days to review before signing (or before an offer of employment or of a covenant expires); written acknowledgment that the employee will receive confidential information or customer relationships. | Same seven-day review, counsel notice, and acknowledgment requirements. |
| Pay during the restriction | The employer continues the employee’s salary and benefits at the level in effect during the last month before the notice period (discretionary compensation excluded). | None required by the statute; the non-compete period is reduced day for day by any garden leave notice period served. |
| What the employee may do | During the notice period: after 90 days, engage in non-work activities at any time and work for another employer with the covered employer’s permission. The employer may reduce salary or benefits for gross misconduct without breaching. | Nothing within the restricted scope; the geographic area and the description of similar services are defined entirely by the agreement, with no statutory reasonableness ceiling. |
| Enforcement | On application, the court must preliminarily enjoin the employee from providing services to another business during the notice period, and may enjoin the new business. | Same mandatory preliminary injunction against the employee and, where the new employer knew of the agreement, against the new employer. |
| Dissolving the injunction | Only on clear and convincing evidence that the employee will not perform similar services or use confidential information or customer relationships during the period, that the employer failed to pay the required salary and benefits after a reasonable opportunity to cure, or that the new business is not engaged in similar business. | Same clear-and-convincing standard; the employee bears the burden. |
| Remedies | Injunction; all available monetary damages; attorney’s fees and costs to the prevailing covered employer. | Same; the Act also provides that a prevailing employee recovers fees where the employer’s enforcement is unsuccessful. |
Three features of the Act will generate the first wave of litigation. The first is the wage calculation for employees whose compensation is dominated by commissions or bonuses: the salary-only threshold and the salary-and-benefits garden leave payment obligation both exclude discretionary compensation, leaving uncertainty about who is covered and what a garden-leave employee is actually owed. The second is geography: because a covered non-compete’s territory is defined entirely by the agreement, courts will have to decide whether the reasonableness requirements of § 542.335 continue to constrain a nationwide or worldwide covered non-compete for a remote employee or a business with a national client base, or whether the Act’s declaration that covered agreements are not restraints of trade removes that inquiry. The third is procedure: a mandatory preliminary injunction, dissolvable only on the employee’s clear-and-convincing showing, inverts the ordinary burden and will test how trial courts handle emergency motions in which the employer need prove little more than the agreement and the alleged breach.
§ 542.335 and the CHOICE Act Compared
Two regimes, one workforce — which one governs depends on the employee’s pay, profession, and signing date
| Traditional Covenant — § 542.335 | CHOICE Act Covered Agreements — §§ 542.41–.45 | |
|---|---|---|
| Who it covers | Any employee, contractor, seller of a business, franchisee, or other party who signs | Employees and individual contractors earning more than twice the county annual mean wage; health care practitioners excluded |
| When it applies | All agreements, regardless of date | Agreements entered on or after July 1, 2025, that meet the Act’s formalities |
| Threshold showing | Writing; legitimate business interest; reasonableness in time, area, and line of business | Writing; wage threshold; 7-day review; counsel notice; confidential-information acknowledgment |
| Duration | Rebuttable presumptions: employee 6 months–2 years; seller 3–7 years; trade secret 5–10 years | Up to 4 years for either agreement, reduced day for day where both are used |
| Geographic scope | Must be reasonable; overbroad scope is modified | Defined by the agreement; no statutory limit |
| Pay during restriction | Not required | Required for garden leave (salary and benefits); not required for a non-compete |
| Injunction | Discretionary; presumption of irreparable injury; bond required | Mandatory preliminary injunction on application; new employer may also be enjoined |
| Employee’s path to relief | Attack the legitimate business interest or reasonableness; no hardship defense | Prove by clear and convincing evidence non-competition, employer non-payment after cure, or dissimilar business; no hardship defense |
| Modification | Court must blue-pencil an overbroad restraint | Not addressed; agreement terms control |
| Fees | Prevailing party | Prevailing covered employer; prevailing employee where enforcement fails |
Where Do You Stand? Considerations for Employers and Employees
Drafting to the Act, signing with eyes open, and leaving without a lawsuit
For employers
- Decide whether to opt in. A covered agreement requires the seven-day review period, the written counsel notice, and the acknowledgment; skipping any of them leaves the agreement governed by § 542.335. Employers should adopt the Act’s formalities deliberately for the executives, engineers, and rainmakers whose departure would matter most, and continue to use conventional covenants elsewhere.
- Document the wage basis. Record the county, the mean-wage figure, and the salary used to establish coverage at signing, because the threshold moves annually and a covered employee’s status will be the first thing challenged.
- Draft the scope as if § 542.335 still applied. Until the courts decide whether the Act displaces the reasonableness inquiry, a covered non-compete with a defined, defensible territory and service description is far more likely to be enforced on an emergency motion than one that reaches the world.
- Budget for garden leave. A four-year garden leave is a four-year salary obligation; most employers will pair a shorter notice period with a non-compete, using the day-for-day credit, and should decide in advance how commissions and bonuses will be treated during the notice period.
- Pair the covenant with the property protections. Confidentiality agreements, trade-secret programs, § 1833(b) whistleblower notices, and exit protocols are what convert a covenant into a provable case; the covenant alone rarely does.
For employees and contractors
- Use the seven days. The review period and counsel notice exist because the Act expects the covenant to be enforced as written; the time to negotiate territory, duration, the definition of similar services, and the treatment of variable compensation is before signing, not after resignation.
- Understand what coverage means. A covered employee cannot argue hardship, cannot expect the court to narrow the covenant, and must prove by clear and convincing evidence that he or she will not compete in order to lift an injunction — so the practical question is whether the compensation justifies four years of restriction.
- Know the employer’s obligations. Non-payment of garden leave salary and benefits, after notice and a reasonable opportunity to cure, is one of the few grounds for dissolving an injunction; track every payment.
- Plan the exit. A departing employee who copies files, solicits customers, or starts work at a competitor before the notice period runs converts a covenant dispute into a trade-secret, conversion, and civil theft case with treble damages and fees; a clean departure preserves every argument.
Defense of the trade secret, CADRA, and FDUTPA claims that typically accompany a covenant enforcement action is described in our Litigation Defense Services materials; the property-tort and civil theft exposure of a departing employee who takes data in our Trespass to Chattels, Conversion & Civil Theft Matters summary.
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