Florida non-compete bill backed by Citadel bodes ill for advisor mobility

Florida is poised to enact legislation that would permit non-compete agreements to last up to four years – a development that could reshape the employment landscape for high-earning professionals, including financial advisors, in the state.

The bill, dubbed the CHOICE Act, was passed by the state legislature on April 24 and awaits the signature of Governor Ron DeSantis. If signed into law, it would take effect in July.

The measure allows employers to impose non-compete clauses and “garden leave” provisions on workers earning at least twice the average wage of the county where they are employed – a threshold that typically exceeds $140,000 in urban areas within the Sunshine State.

It would also mandate preliminary court injunctions at the time of filing, effectively blocking employees from continuing similar work during legal proceedings. Existing Florida law permits non-competes but leaves room for judicial discretion; the new rules would substantially limit that flexibility.

Citadel, the Miami-based hedge fund founded by billionaire Ken Griffin, is among the corporate entities that supported the legislation. According to Bloomberg, lobbyists affiliated with the firm helped shape the bill's language alongside the Associated Industries of Florida.

“It’s extremely friendly toward employers,” James Valentino, an employment lawyer with Clayman Rosenberg Kirshner & Linder, told Bloomberg. “Florida is known for that, but this takes it to a different level.”

Bucking the national trend

While the legislation is not specific to the financial sector, its passage could have implications for firms operating in Florida’s growing wealth management hub. Over the past several years, money managers have been migrating to the state, contributing to a competitive hiring environment and driving increased use of non-competes, deferred compensation clawbacks and non-solicitation clauses.

The bill’s advancement also runs counter to a broader movement across the country to limit or ban such restrictions. As reporting by Fortune noted, states including California, North Dakota, and Oklahoma prohibit non-compete agreements entirely, while others such as Washington, Oregon, and Illinois enforce them under strict conditions.

In 2024, the Federal Trade Commission issued a rule to ban non-competes nationwide, but its enforcement was blocked by a district court.

“I was shocked when I first saw the act,” Michael Elkins, partner and founder of MLE Law, told Fortune. “The state is going in the complete opposite direction of what others are trying to accomplish.”

The CHOICE Act would also apply to independent contractors and out-of-state employees. If challenged, workers must prove they are not in a competitive role or that the agreement violates the law – without relying on any confidential company information. Critics argue the shift in burden of proof could make it significantly harder for individuals to contest the agreements in court.

“I think non-competes are very helpful to businesses when you’re dealing with top people like CEOs and CFOs, those who know where the bodies are buried, so to speak,” Elkins said. “But they’ve absolutely been abused and were never intended to prohibit regular workers from changing jobs.”

Implications for advisor transitions

Although the wealth management industry has not issued specific responses to the Florida bill, past commentary underscores the tension such measures create for advisor transitions.

Taylor Matthews, co-founder and CEO at Farther, recently told InvestmentNews that restrictive covenants often reflect a deeper disconnect between firm leaders and advisors planning to depart.

“If you put yourselves in the shoes of the management of those firms, they're up against their own revenue goals and their own asset goals,” he said. “Anytime an advisor leaves, it's a challenge to those goals.”