Garden Leave Clause: Paid to Stay Home, But at What Cost?
What This Clause Does
Garden leave means that during your notice period, whether you resign or are terminated, you're still employed and paid, but you're not required (and often not allowed) to come in or do any work. The employer effectively pays you to stay home while you're unable to join a competitor.
This can feel like a bonus paid vacation, but the practical effect is similar to a non-compete: you're locked out of your industry for weeks or months while competitors fill the position. Garden leave periods commonly run 1-6 months. Combined with a separate non-compete, the total lock-out period could be substantial.
Example Clause Pattern
"During any notice period, Company may place Employee on garden leave, during which Employee shall remain employed and receive full base salary but shall not be required to perform duties and shall not, without prior written consent, work for any other employer."
What to Watch
- Garden leave period exceeds 3 months
- Combined with a separate non-compete that starts after garden leave ends
- You're prohibited from preparing to start a new job during garden leave
- Company can extend the garden leave period unilaterally
What to Negotiate
- Negotiate that garden leave time counts toward any subsequent non-compete period — otherwise you're subject to two consecutive restrictions
- Cap garden leave at 60 days unless accompanied by a meaningful payment above your regular salary
- Get clarity on what "preparing to start a new job" means — you should be free to apply and interview during this period
- Ask whether garden leave counts toward benefits continuation, equity vesting, and PTO accrual
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Found in These Contracts
This clause commonly appears in the following contract types:
Frequently Argued Questions
What is a garden leave clause?
A garden leave clause allows the employer to pay you to stay home during your notice period rather than having you come in and work. You remain an employee and receive your full salary, but you're typically not allowed to work for anyone else during that time. The employer uses it to remove your access to sensitive information and client relationships while honoring the financial terms of your contract.
How is garden leave different from a non-compete clause?
The functional effect is similar — you're restricted from joining a competitor — but the mechanism differs. Garden leave operates during your notice period and keeps you on the payroll. A non-compete operates after employment ends and typically isn't paid. Many contracts include both, creating a back-to-back restriction. If garden leave is 3 months and a non-compete is 12 months, you could face 15 months of total restricted activity.
Is garden leave paid?
Yes. During garden leave you remain employed and continue to receive your full base salary and contractual benefits. This distinguishes it from a post-employment non-compete, which restricts your activities after you leave without any corresponding payment. If you're placed on garden leave, you're entitled to be paid for the entire notice period even if you're not asked to do any work.
Negotiation Strategies
Negotiate that garden leave time counts toward any subsequent non-compete period
Cap garden leave at 60 days unless accompanied by a significant payment
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