Recent Developments in Efforts to Ban Noncompetes—What Florida Employers Should Know in 2025

This article is from the Florida Bar Journal: https://ow.ly/HNsq50WFBKK

For nearly three decades, Florida has taken a business-friendly approach to restrictive covenants—especially noncompete agreements. But that stance has been tested by a flurry of federal activity, high-profile court challenges, shifting signals from the FTC and NLRB, and fresh (but still uncertain) proposals in the Florida Legislature. Here’s a clear, practical rundown and what employers should do now.

Florida’s Baseline: How Noncompetes Work Under § 542.335

Florida Statute § 542.335 remains the controlling framework:

• Form: Must be in writing and signed by the person to be restrained.

• Legitimate business interests (must be pled and proved):

  1. Trade secrets; 2) confidential business information; 3) substantial relationships with specific customers/patients/clients; 4) customer/patient/client goodwill; 5) extraordinary or specialized training.A covenant without a legitimate interest is void.

• Reasonableness: Time, geography, and scope must be reasonable.

  • Former workers: ≤ 6 months presumed reasonable; > 2 years presumed unreasonable.

  • Sellers of a business: ≤ 3 years presumed reasonable; > 7 years presumed unreasonable.

Florida has also carved out special rules for physicians (see § 542.336 and the legislative activity below).

The Federal Push—and the Pushback

The FTC’s Nationwide Ban (Proposed, Then Enjoined)

• After study and a 2021 Executive Order encouraging a crackdown, the FTC voted in April 2024 to ban noncompetes for most “workers,” and to ban future noncompetes for “senior executives.” It also warned that overbroad NDAs and non-solicits could be treated as functional noncompetes. Employers would have had to rescind existing noncompetes and notify workers.

• Litigation split the trial courts:

  • Ryan LLC v. FTC (N.D. Tex.): Preliminary injunction for the parties in July 2024; later nationwide injunction on the merits. The FTC appealed to the Fifth Circuit (appeal pending).

  • ATS Tree Services v. FTC (E.D. Pa.): PI denied; court found the FTC had authority; case later voluntarily dismissed by the plaintiff.

  • Properties of the Villages, Inc. v. FTC (M.D. Fla.): PI granted for the employer; court applied the Major Questions Doctrine, finding the rule exceeded the FTC’s authority. The FTC appealed to the Eleventh Circuit.

• Bottom line (today): The FTC’s noncompete ban is blocked nationwide by the Ryan judgment, with appeals pending. The agency’s current leadership has also signaled interest in pursuing case-by-case enforcement against anti-competitive worker restraints.

  
  

The NLRB’s Parallel Track—and a Reset

• In McLaren Macomb (2023), the NLRB held that broad non-disparagement and confidentiality clauses in severance agreements can unlawfully chill Section 7 rights, even if the employee never signs.

• The prior General Counsel then issued memos arguing many noncompetes and stay-or-pay terms (e.g., training-repayment agreements) were presumptively unlawful.

• 2025 leadership changes brought a course correction: the new Acting GC rescinded those memos. McLaren Macomb remains binding NLRB precedent, but the expansive, memo-based interpretations are no longer operative. The NLRB currently lacks a full, stable board quorum, so major doctrinal shifts are on hold.

  
  

Florida Legislative Activity: Physician Carve-Outs and “Garden Leave”

• Physicians (existing law): § 542.336 limits certain physician noncompetes where a single entity employs all specialists in a county.

• Recent proposals (2024–2025): Multiple bills sought to invalidate physician noncompetes more broadly; none passed in 2024. In 2025, companion bills (H.B. 485 / S.B. 942) again aim to void physician noncompetes post-separation; status uncertain.

• “Garden leave” concept (2025 proposals: S.B. 922 / H.B. 1219):

  • Would create paid notice-period agreements (up to 4 years) for certain “covered employees” (e.g., higher earners or those with access to confidential information/customer relationships).

  • Employers pay salary and benefits during the notice period and can relieve the employee of duties.

  • Noncompete durations could extend up to 4 years, but must be reduced day-for-day by any nonworking garden-leave time.

  • These bills would effectively add a new, Florida-specific pathway to protect trade secrets and customer relationships—if enacted.

Takeaway: Nothing material has passed yet, but the Legislature continues to scrutinize physician covenants and explore garden-leave models.

What Employers Should Do Now

1. Tighten the basics.

   • Confirm each covenant is in writing and signed.

   • Tie restrictions to specific, provable legitimate interests (don’t just list them—explain them).

   • Right-size time, territory, and scope to the role and the markets actually served.

2. Segment your templates.Use different forms for executives, sales, engineers, and hourly roles; align the restrictions to duties, access, and risk.

3. Prefer layering over overreach.Combine a narrow noncompete (where truly needed) with well-drafted non-solicit, NDA, invention assignment, and IP/return-of-property provisions. Avoid NDAs/non-solicits that “function to prevent” competitive employment.

4. Mind McLaren Macomb.Revisit severance templates: narrow non-disparagement and confidentiality clauses, include NLRA-safe harbors, and avoid language that could chill Section 7 rights for non-supervisory employees.

5. Inventory and notice readiness.Keep a live list of who has which covenant, by jurisdiction and job family. If courts revive any version of an FTC-style rescission requirement, you’ll be able to act fast.

6. Evaluate “garden leave” now.Even before any statute passes, consider whether paid notice periods (30–180+ days) make sense for certain roles as a less contentious, more enforceable alternative to long post-employment restraints.

7. Arbitration & choice-of-law hygiene.Ensure arbitration and forum/choice-of-law clauses are defensible given the employee’s location and the role’s nexus to Florida.

8. Train your managers.Missteps often happen at hire and exit. Equip HR and managers to discuss covenants accurately and avoid statements that undercut enforceability.

   
   

The Road Ahead

• Federally: The FTC ban is enjoined nationwide; appeals are pending, and the agency may pivot to targeted enforcement against egregious practices. The NLRB’s broader anti-noncompete posture has eased with the rescission of prior GC memos, but McLaren Macomb still constrains severance clauses.

• In Florida: § 542.335 remains intact. Physician-focused bills and garden-leave proposals bear watching through the 2025 session.

For now, Florida employers can still rely on tailored, interest-driven covenants—but success will depend on precision, proportionality, and papering the record to show why each restraint is necessary.