How the New Choice Act Affects Florida’s Noncompete Agreement Laws

Noncompete agreements have been a contentious issue, and the subject of many “on again off again” rules and regulations making them illegal and then legal again. But in Florida, a new law not only reinforces the previous legalization of these agreements, but actually, it can be argued, makes them a bit stronger.

The Choice Act

It’s called the Choice Act, and it not only allows noncompete agreements, but extends the time that they are presumptively legal. Under existing law, only noncompete agreements that were in the duration of two years or less were legal. But the Choice Act extends that period to four years as being presumptively legal.

The existing noncompete law, also only allows restrictive covenants where a legitimate business interest is being protected, something that leads to a lot of challenges and litigation. But the Choice Act has no such requirement–so long as the time is 4 years or less, employers don’t have to prove any business interest is being protected.

Who Does the Law Restrict?

There is a catch or a limitation however: the law only applies to employees who make two times the salary average of whatever county the employer’s principal place of business is in (something that, in some cases, may lead to litigation, as the calculation of salary from county to county differs).

If there is no such place (for example, an online business with no one county of headquarters), then the threshold is twice the salary of whatever county that the employee resides.

As you can see, the Choice Act really only restricts and applies to employees who make a good income, it is not intended to affect those who are paid less. However, as of now, Florida’s already existing noncompete agreement laws would still restrict lower paid workers, if such an agreement was in place.

Giving Notice to Employees

Employers seeking to use these agreements under the Choice Act, must follow some requirements.

Affected employees must be told that they will be subjected and exposed to trade secrets, and must be given 7 days to consider it and should be told that the employee should seek legal advice before signing the agreement.

Punishment for Violations

The law specifically allows not only an injunction against an employee who breaks the restrictive covenant, but also specifically allows the new business, hiring the restricted employee in violation of the agreement, to be enjoined.

The employee can use the employer’s violation of an employment agreement, including nonpayment of wages, as a defense to enforcement.

Two Laws That Apply

This all can get confusing, because there are now two restrictive covenant laws on the books in Florida: the one that has always existed, with its own specific requirements, that applies to any employee with a valid noncompete agreement, and this new Choice Act.

Employers need to know what Act or law applies to what employee, to avoid having restrictive covenants that are open to being challenged.

Do you have trade secrets that need protection? Call our Fort Lauderdale business and commercial litigation law attorneys at Sweeney Law P.A. at 954-440-3993 for help.

Source:

littler.com/news-analysis/asap/floridas-choice-act-offers-employers-two-new-types-agreements-prevent-unfair