Andrew Powell
A new measure has been filed to strengthen legal safeguards for employment agreements and seeks to guarantee the enforceability of these agreements under Florida law.
St. Augustine Republican Sen. Thomas Leek filed the bill (SB 922) with the goal of augmenting legal protections for employment agreements, especially those involving trade secrets and noncompete clauses.
The Legislature has found that state interests are served by enforcing strong legal protections in contracts between employers and contracted personnel, which encourages greater levels of information sharing, training and development.
It further finds that alternative means of protecting confidential information and client relationships, such as nondisclosure agreements, fixed-term contracts and non-solicitation clauses within employment contracts are not sufficient to protect against global risks faced by companies in Florida. The bill adds that predictability in the enforcement of contracts fosters investment into the state.
The bill defines key terms such as “covered employee,” “covered employer,” “covered garden leave agreement” and “covered noncompete agreement,” and specifies the applicability of these agreements. It would further create new Florida statutes — specifically “The Florida Trade Secret Protection Act” — which would build off of the existing “Florida Antitrust Act of 1980.”
A “covered employee” is defined as an employee or individual contractor who earns or is reasonably expected to earn a salary greater than twice the annual mean wage, or who has access to his or her employer’s or client’s confidential information or customer relationships. Meanwhile, a “covered employer” is defined as an entity or individual who employs or engages a covered employee.
Covered garden leave agreements are defined as a written agreement or part of a written agreement between a covered employee and their employer. The bill states that these agreements require advance notice of up to, but no more than, four years before terminating the employment or contractor relationship. Typically, employees must give 30 to 90 days advance notice of their resignation.
Under these agreements, employees would agree to not resign before the end of the agreed notice period. Employers would be required to retain the covered employee for the duration of the agreed time and would be required to continue to pay the employee’s salary and benefits that the employee received in the last month before the commencement of the notice period.
The employer would not be obligated to provide discretionary incentive compensation or benefits, or have the covered employee continue performing any work during the notice period.
A prospective or current covered employee would be required to make a written acknowledgment that they were advised of their right to seek legal counsel before executing a garden leave agreement.
Covered noncompete agreements are defined as written or portions of a written agreement between a covered employee and their employer. The noncompete agreement would require a covered employee to agree to not assume a role with or for another business entity or individual within a specified geographic area — which may be global in scope — for a period of up to four years.
Current noncompete agreements range from six months to two years, allowing additional time depending on the need to protect customers and other types of business interests.
Similar notice requirements and enforcement provisions would apply to noncompete agreements as with garden leave agreements.
The bill notes that garden leave agreements do not constitute a restraint of trade or an attempt to monopolize trade or commerce. Notice requirements would be required to be followed, and the courts would be required to issue a preliminary injunction to stop any breaches of these agreements.
Prevailing parties would be able to have any reasonable attorneys fees and costs covered, and employers would be allowed to reduce salaries or benefits in cases of gross misconduct without breaching the agreements.
If passed, the bill would come into effect July 1.
