Summary
Compares Florida’s CHOICE Act with Florida’s general restrictive-covenant statute and Alabama’s statutory framework for non-competes. Covers who can qualify as a covered employee, what a covered agreement must include, the 7-day delivery rule, the 4-year limit, the primary place of work test, what Alabama’s exceptions and burden of proof look like, and what employers can review in existing agreements. Closes with an FAQ.
By: Jordan Gerheim, CEO – Outside Chief Legal LLC
A business with employees in Alabama and Florida should not assume that one non-compete template will receive the same treatment in every situation.
Florida’s CHOICE Act, with a statutory effective date of July 1, 2025, added a framework for certain covered non-compete agreements. Florida’s general restrictive-covenant statute remains relevant to other agreements. Alabama has its own statutory exceptions, requirements, and allocation of proof.
For Gulf Coast employers, the starting question is not simply which side of the state line an employee works on. It is which law and statutory framework apply to the particular agreement and relationship.
Quick answer: Florida’s CHOICE Act provides an enforcement framework for qualifying non-compete agreements lasting up to 4 years. Coverage depends on the worker, compensation, agreement terms, required procedures, and the relationship’s connection to Florida.
Agreements outside that framework may still be enforceable under Florida’s general restrictive-covenant statute. Alabama separately permits certain restrictive covenants when its statutory requirements are met.
Neither state’s law makes every non-compete enforceable, and a change in work location does not automatically determine the result.
What did Florida’s CHOICE Act add?
The CHOICE Act addresses covered garden-leave agreements and covered non-compete agreements. This article focuses on the non-compete provisions.
A covered non-compete agreement may restrict specified work for a period not exceeding 4 years within the geographic area defined in the agreement. The statutory definition addresses similar services and roles in which the worker would be reasonably likely to use the former employer’s confidential information or customer relationships.
The Act also establishes an enforcement process involving preliminary injunctions. When the statutory requirements apply, Section 542.45 directs courts to issue preliminary relief and identifies grounds on which that relief may be modified or dissolved. The statute requires clear and convincing evidence for those specified grounds.
That framework differs from a general statement that every Florida non-compete is presumed enforceable.
Who can qualify as a covered employee?
The statutory definition includes an employee or individual contractor who earns, or is reasonably expected to earn, salary greater than 2 times the applicable annual mean wage.
If the employer’s principal place of business is in Florida, the statute refers to the Florida county where that principal place of business is located. If it is outside Florida, the statute refers to the Florida county where the worker resides.
The definition of salary matters. Certain compensation is excluded, including anticipated but indeterminable compensation such as tips, bonuses, or commissions. Total compensation should not automatically be treated as qualifying salary.
The covered-employee definition excludes a person classified as a health care practitioner under the referenced Florida statute. That is a defined exclusion, not a general statement about everyone employed in the healthcare industry.
Coverage should be confirmed using the applicable wage information, compensation definition, and worker classification.
What must a covered agreement include?
The agreement must meet the statutory definition and applicable requirements.
Section 542.45 requires the worker to be advised in writing of the right to seek counsel before execution. It also requires a written acknowledgment that the worker will receive confidential information or customer relationships during employment.
Where an applicable covered garden-leave agreement exists, the non-compete must provide for the required reduction of the non-compete period by the nonworking portion of the notice period.
The notice timing is specific. A prospective worker must receive the proposed agreement at least 7 days before the employment offer expires. A current worker must receive it at least 7 days before the offer to enter the non-compete expires.
A standard template or an acknowledgment alone does not establish that every requirement has been met.
Does the CHOICE Act replace Florida’s general non-compete statute?
No. Section 542.45 states that actions concerning restrictive covenants outside the covered definitions are governed by Section 542.335. An agreement’s failure to qualify for the CHOICE Act framework does not, by itself, establish that it is unenforceable.
Under Section 542.335, the enforcing party must establish a legitimate business interest and show that the restriction is reasonably necessary to protect it.
That statute also contains burden-shifting provisions. After the enforcing party makes the required initial showing of reasonable necessity, the opposing party must establish that the restriction is overbroad, overlong, or otherwise unnecessary.
The relevant question is which framework applies, not whether Florida now has only one rule.
How does Alabama’s framework differ?
Alabama’s statute generally treats restraints on a lawful profession, trade, or business as void except as authorized by its statutory exceptions.
Those exceptions include qualifying employee agreements restricting similar business activity within a specified geographic area, subject to reasonable restraints of time and place. Under that provision, restraints of 2 years or less are presumed reasonable in duration. That presumption does not establish every other requirement for enforcement.
The party seeking enforcement bears the burden of proof on each element. If the resisting party raises undue hardship as a defense, that party bears the burden of proving it.
An Alabama agreement therefore requires review of the applicable exception and its requirements, rather than an assumption that the agreement is either automatically valid or automatically void.
Which law applies to a business operating in both states?
The answer requires more than identifying the employee’s current location.
Florida’s CHOICE Act applicability provision addresses a covered employee whose primary place of work is Florida, regardless of an applicable choice-of-law provision. It also addresses a covered employer whose principal place of business is Florida when the agreement is expressly governed by Florida law.
The statute defines primary place of work as the location where the worker spends more work time than at any other single workplace.
These provisions should be reviewed alongside the agreement and the facts of the relationship. A governing-law clause, interstate territory, or relocation should not be treated as resolving every cross-border issue without further analysis.
What should employers review in existing agreements?
Start with the worker’s role, primary workplace, residence, qualifying compensation, and the employer’s principal place of business.
Then review the agreement’s date, governing-law language, restricted activities, geographic scope, duration, and any required notices or acknowledgments.
For a potential CHOICE Act agreement, confirm that the statutory coverage and procedural requirements were satisfied. For an agreement evaluated under Florida’s general statute or Alabama law, review the requirements of that framework instead.
A promotion, relocation, compensation change, or change in responsibilities can be a useful occasion for review. None automatically establishes that an existing agreement qualifies for a different enforcement framework.
The goal is an agreement suited to the relationship and the business’s legitimate needs, not necessarily the broadest restriction available.
Frequently Asked Questions
Does Florida non-compete law apply only to highly compensated workers?
No. The CHOICE Act’s covered-employee definition includes a compensation threshold, but Florida’s general restrictive-covenant statute remains relevant to other agreements.
Can a covered non-compete last 4 years?
The CHOICE Act permits covered non-compete periods not exceeding 4 years. The agreement and relationship must still satisfy the applicable statutory requirements.
Are all healthcare workers excluded?
The covered-employee definition excludes health care practitioners as defined by the referenced Florida statute. Whether a particular worker falls within that definition requires review. The exclusion should not be extended automatically to every healthcare-industry employee.
Does Alabama prohibit every employee non-compete?
No. Alabama permits certain agreements within its statutory exceptions when the applicable requirements are met.
Does moving an employee to Florida automatically change the agreement?
Do not assume that it does. Review the agreement, the employee’s actual work arrangements, the applicable statutory provisions, and any governing-law issues before reaching a conclusion.
Should a business replace its agreements now?
A review may be appropriate, particularly where the same template is used across states or the worker’s role, location, or compensation has changed. Whether an amendment or replacement is appropriate depends on that review.
Reviewing your agreements
If your business operates in Alabama and Florida, book a Risk-Free Strategy Session with Outside Chief Legal to discuss the questions your existing agreements raise.
General information only. This article is not legal advice.
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