One of the most employer-friendly policies in the US has become law.
Florida enacted legislation that allows companies to enforce non-compete agreements for up to four years, up from the current two. The new law is a big win for Citadel’s CEO Ken Griffin, who advocated for it.
With the new arrangement, employees leaving a company would be relieved of their job responsibilities but severely restricted from working elsewhere. They would keep their pay and benefits but would not be entitled to bonuses, which can make up a large chunk of pay in finance and management positions.
The rule applies to workers earning at least twice the average local wage in Florida, which is about $140,000 in urban areas, plus those who have access to confidential employer information.
Lobbyists for the law said that it would protect trade secrets and invite high-paying companies to Florida. Since the pandemic, finance and other companies have flocked to Florida, moving headquarters or expanding offices in cities like Miami.
“Florida is poised to become one of the finance capitals of the world,” said Sen. Tom Leek, who was among the bill’s sponsors, in a legislative meeting. “If we want to attract those kinds of clean, high-paying jobs, you have to provide those businesses protection on the investment that they’re making and their employees.”
Last year, the Federal Trade Commission issued a rule banning most non-compete clauses in employment contracts, which was blocked by a federal court order.
Miami is the ‘future of America’
Citadel’s lobbyists contributed to shaping the bill’s language. Griffin, the hedge fund’s chief, has been bullish on the future of Florida and Miami. He said that this “Wall Street South” could one day overtake New York as America’s financial hub.
“Miami, I think, represents the future of America,” he said in 2023, adding that Florida’s pro-business political environment favors its growth.
Citadel has extended non-compete agreements for some portfolio managers to 21 months, exceeding the industry practice of one year.
The new law contrasts with the more worker-friendly policies that many states, including California, Oklahoma, Minnesota, and North Dakota, have been moving toward, including limitations and bans on non-competes.
Before it became law, several think tanks urged Florida Gov. Ron DeSantis to veto the bill because it would hurt innovation, restrict workers, and hinder the growth of startups.
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