What is a Garden Leave Clause and should I sign it?
Though I am not a lawyer, there are times when clients ask me questions about issues they encounter in the workplace. Though I always refer and defer to lawyers for my clients, I like to be able to send them in the right direction.
This morning a client texted me to ask about the “Garden Leave” form she was being asked to sign. I honestly never heard of it before but since Google is my friend and I am very quick at finding solutions via Google, I researched quick for her.
Apparently the history of the Garden Leave policy comes originally from the UK:
The use of “garden leave” provisions—a fixture in the United
Kingdom—has been gaining momentum on this side of the Atlantic
in recent years, but whether they will yield the benefits that employers
want remains to be seen. Under a garden leave provision, employees
are required to provide a certain amount of notice before terminating
their employment. During that notice period, the employee continues to
receive full salary and benefits, but does not work. Because the employment
relationship technically continues, employees on garden leave
arguably cannot work for others during the garden leave period.
The Garden Leave clause used in the United States
This clause has been instituted by groups like Citigroup and Morgan Stanley in recent years. The goal is to keep any information confidential and keep the employee from sharing it with a new employer quickly. The theory is that if the employee is kept out of the office for 50-75 and not allowed to work for another employer, they cannot share this information. When the time period is over, critical information in fields like the financial world Citigroup and Morgan Stanley represent will be stale and not something that will create havoc for the former company.
Further research found a blog post that went into more detail:
So, by operation of a Garden Leave provision, the employee must sit home, collect pay and benefits, and the employer’s needs, mentioned above, are met. If an employee violates his or her Garden Leave agreement, that employee must bear the possible risks involved: a lawsuit, a letter being sent to the new employer demanding the employee be fired, loss of past-paid bonuses and stock options, and perhaps even having to pay the former employer’s legal costs.
What do I suggest?
Essentially, a Garden Leave Policy appears to be another version of a non-compete clause. This is the time I would seek out an employment law attorney and have them read the contract BEFORE you sign it. I don’t know if you will have any choice in signing but once you sign, you have agreed and the consequences of violating any agreement can be serious.
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