Garden leave
Summary definition: A separation arrangement in which an employee continues receiving full pay but is relieved of their duties and barred from the workplace until their contract ends.
What is garden leave?
Garden leave (a.k.a. gardening leave) is an offboarding arrangement in which a departing employee remains legally employed with full pay but is prohibited from the office and their duties.
Originally a U.K. employment practice, garden leave exists across numerous industries and jurisdictions. It’s most commonly invoked for employees moving to a direct competitor, those with access to trade secrets, or senior leaders whose continued presence could create instability during the transition.
Key takeaways
- Garden leave is a notice period arrangement in which a departing employee remains employed with full pay but is relieved of their duties and barred from the workplace.
- For HR teams, gardening leave is primarily a risk management tool that’s most applicable when an employee is leaving for a competitor and has access to trade secrets, sensitive information, or key client relationships.
- HR should ensure contracts for senior and client-facing roles include this provision, and that any garden leave agreement provides full compensation for the duration of the notice period.
What is the difference between garden leave and severance?
When garden leave is invoked, the employee is notified in writing of their placement, the restrictions that apply, and their ongoing obligations. They continue receiving full salary and remain bound by all contract terms while HR coordinates the immediate revocation of system access, the return of company property, and the handover of responsibilities.
Severance, by contrast, is compensation provided after employment has ended, typically in exchange for a release of claims.
Garden leave agreement considerations
For the arrangement to be enforceable, a garden clause must be present in the existing employment contract (i.e., it can’t be imposed after the fact). Therefore, HR teams should keep the following in mind when drafting or invoking a garden leave contract:
- Reasonable length: Courts in many jurisdictions won’t enforce garden leave periods that are disproportionately long relative to the legitimate business interest(s) being protected. As such, HR teams should align the length of the arrangement with the employee's role, access to sensitive information, and applicable employment law.
- Full compensation: Employees must receive their full contractual salary and benefits during gardening leave. Reducing compensation during this period could be viewed as a breach of contract and undermine the enforceability of any associated restrictions.
- Clearly defined restrictions: The garden leave agreement should specify what the employee can and can’t do during the notice period, including restrictions on contacting clients, soliciting colleagues, and working for a competitor.
Garden leave example
The following is a hypothetical example of what a garden clause might look like within an employment contract.
Garden clause example
"Upon resignation or termination, the Company reserves the right to place the Employee on garden leave for all or part of their notice period. During this time, the Employee will continue to receive their full base salary and contractual benefits but may be required to avoid Company premises, refrain from contacting clients, customers, or colleagues on Company matters, and return all Company property and equipment. The Employee remains bound by all terms of this agreement, including confidentiality and non-solicitation obligations, for the duration of the gardening leave period."
The specific terms of a garden leave contract should be drafted with input from legal counsel to ensure enforceability under applicable employment law.
The pros and cons of gardening leave
Like any HR tool, garden leave involves trade-offs for both the organization and the departing employee. Understanding both perspectives helps HR professionals decide when it is appropriate or when another mechanism is more desirable.
| Pros | Cons | |
| Employer | Protects confidential information and trade secrets. | Full salary must be paid for a non-contributing employee, which can be costly for senior or long-notice roles. |
| Prevents the departing employee from soliciting clients or recruiting colleagues. | Knowledge transfer becomes difficult after the employee is removed from the business. | |
| Removes a potentially disengaged employee, protecting team morale and stability. | Applying garden leave too broadly increases costs and can signal distrust, harming the employer brand. | |
| Employee | Full salary and contractual benefits. | Confidentiality and non-solicitation obligations remain in effect, limiting network engagement and preparation for the next role. |
| Time away provides space to rest, upskill, or prepare for the next role without sacrificing income. | Cannot begin work for a new employer until gardening leave ends, which may create tension with said employer. | |
| Offers a clean, structured exit from an otherwise sensitive working situation. | Being abruptly removed from a team and role can be disorienting, particularly for long-tenured employees. |
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