USA – FLORIDA Trends and Developments Contributed by: Stuart Singer and Carl Goldfarb, Boies Schiller Flexner
law should apply. In recent years, courts have been less inclined to overturn choice-of-law provisions because they have placed increased weight on the policy choices of states that permit enforcement of non-compete agreements. DraftKings Inc v Hermalyn , 118 F 4th 416, 423 (1st Cir 2024) is a case in point. That case concerned a New Jersey resident who worked for Massachusetts-head - quartered DraftKings. He quit to take a similar job with a California rival. DraftKings sued its ex-employee in federal court in Massachusetts for breach of a non- compete. The dispositive issue was which law applied. The trial court held that Massachusetts law (the contractually specified law) governed, rejecting the employee’s argument that California law should apply because Massachusetts law was contrary to the public policy of California, and the First Circuit affirmed, deter - mining that the case before it involved “two states passing laws reflecting different but careful balances of conflicting forces in the non-compete area” (Id at 422–23). In light of the Massachusetts statute, the court upheld the injunction because the ex-employee failed to show that California’s interest in pursuing its policy was “materially” greater than Massachusetts’ interest (Id). A number of other courts have also found that the interest of the state where a worker resided was not materially greater than the interest of the state where the employer was based. See, for instance: • Down-Lite Int’l, Inc v Altbaier , 821 F App’x 553, 556 (6th Cir 2020) – stating “California has a mean - ingful interest in protecting its resident from” his Ohio-based former employer’s “desire to restrict competitive conduct”, but holding that “that inter - est is not materially greater than Ohio’s interest in protecting one of its closely held businesses oper - ating in the global economy”; and • McGriff Insurance Services, LLC v Wilson , 2025 BL 7971, at *4 (MDNC, 10 January 2025) – apply - ing the law of the employer’s state, North Carolina, not the law of the state where the employee was based, Georgia, because North Carolina “has an interest in protecting its companies from breaches
of employment agreements” and it could not say that Georgia’ interest was materially greater. Litigating CHOICE Act Claims for Florida Workers Employed by Non-Florida Companies In a novel twist, Florida’s CHOICE Act also purports to apply to all covered workers with their principal place of work in Florida, regardless of where their employer is based and “regardless of any applicable choice-of- law provisions” (Fla. 542.45 (1)(a)). If such workers signed a non-compete agreement with a valid venue provision, that provision will likely be enforced “in all but the most exceptional cases”. See Atlantic Marine Construction Co, Inc , 571 US at 63. The court will also have to determine whether, in the case of a conflict with the laws of another state, Florida law will govern, as the Act requires. Where the employer is not based in Florida, a court is likely to find that Florida’s interests are attenuated. How - ever, Florida has an economic interest in encouraging companies not based in Florida to expand operations in Florida, and the Florida legislature has determined that the CHOICE Act would do just that (Fla. Section 542.42). To override the choice of law specified in a non-compete agreement, courts will have to deter - mine whether Florida’s interest is materially greater than the interest of the state whose law is specified in the agreement as governing. If the company prevails on threshold issues, courts will also have to determine the scope of injunctive relief. Under Keener , federal courts in the 11th Circuit should not enjoin an ex-employee from working in a state where enforcing non-compete agreements is against public policy, because in light of comity and federalism concerns Florida “cannot in effect apply its public policy decisions nationwide – the public policy of [Florida] is not that everywhere” (342 F 3d at 1269). There is also support for such a limitation outside the 11th Circuit. See, for example: • Thomas v Wash Gas Light Co , 448 US 261, 272 (1980) – observing that empowering the courts of one state to give that state’s laws and judgments extraterritorial effect “risks the very kind of paro - chial entrenchment on the interests of other States
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