Garden leave: Definition, how it works, and pros and cons

Key takeaways
* Garden leave (also called gardening leave) is a paid period during an employee’s notice where they are relieved of workplace duties but remain on payroll and subject to restrictions.
* Employers use it to protect sensitive information, client relationships, and business continuity while an employee exits.
* Employees keep salary and benefits but are often barred from working for others or accessing company systems; specifics depend on contract and local law.
* The practice is common in the U.K., Australia, and New Zealand and appears increasingly in parts of the U.S., subject to varying legal limits.

What is garden leave?

Garden leave is a contractual device that keeps an employee officially employed and paid during their notice period while restricting their workplace activity, access to systems, and contact with clients or colleagues. The name comes from the idea that the employee can spend the notice period out of the office — perhaps gardening — rather than working.

Why employers use garden leave

Employers typically impose garden leave to:
* Prevent departing employees from immediately taking sensitive information, trade secrets, or client relationships to a competitor.
* Limit disruption to the workplace and deter solicitation of colleagues or customers.
* Keep the employee available for questions or transition work, without allowing day-to-day access to systems or people.
* Temporarily “remove” the employee from the labor market without an immediate cash payment in lieu of notice.

When garden leave is appropriate

Consider garden leave when an employee’s departure could pose risks to the business — for example, if they have current, actionable access to confidential data, strong client ties, or influence over personnel. Before imposing garden leave, employers should weigh:
* The financial cost of paying a nonworking employee (especially at senior pay levels).
* Contractual authority to impose garden leave and the risk of breach-of-contract claims.
* Local legal restrictions on post-employment restraints and notice arrangements.
* The appropriate duration needed to mitigate risk.

Employee rights and typical obligations

During garden leave an employee typically:
* Continues to receive salary and contractual benefits; bonus and commission treatment depends on the contract.
* Must return company property and may be denied access to company systems, premises, and contacts.
* Is usually required to be available for reasonable queries or to assist with transition tasks.
* Is often prohibited from starting new employment, working for a competitor, or soliciting clients or colleagues until the garden leave ends.
* May be required to use accrued holiday during the period, subject to contract and local law.

Contract clauses and enforceability

Garden leave provisions are normally included in employment contracts, especially for senior hires. Enforceability depends on clear contractual language and local employment law. Imposing garden leave without contractual authority risks breach-of-contract disputes. Special care is needed where compensation is performance-based (commissions, bonuses), since disputes often arise over entitlements during garden leave.

Pros and cons

Employers
* Pros: Protects confidential information and client relationships; reduces immediate competitive risk; keeps the employee available for transition.
* Cons: Continues payroll costs with little or no productivity; legal complexity and compliance risk; potential reputational impact.

Employees
* Pros: Paid for a defined period while relieved of duties; time to search for a new role (but usually not to start one); may retain certain bonuses or commissions if contractually provided.
* Cons: Restricted in work and professional activity; potential loss of momentum in career progression; possible reputational or emotional downsides if the leave follows termination.

Garden leave in the United States

Laws and practice vary by state and sector. Some notable developments:
* Massachusetts enacted a garden leave provision that sets minimum protections for covered workers.
* Other states have passed or considered statutes limiting post‑employment restraints (for example restricting noncompetes), which affects what employers can require during notice periods.
* Some professional rules (for example, rules governing lawyers in some jurisdictions) limit or prohibit agreements that effectively bar a professional from practicing for a period after departing a firm.
Employers and employees should check applicable state law and professional regulations before relying on garden leave.

Typical garden leave arrangements (an example)

A common formulation in separation agreements:
* A defined garden leave period during which the employee will not attend the workplace or access electronic systems.
* The employee remains on payroll and must be available for reasonable consultation.
* All business during the period is handled through designated company officers or contacts.

Common questions

Can I start a new job while on garden leave?
* Usually not. Garden leave clauses commonly bar starting new employment or performing competing work during the leave; doing so can be a breach of contract.

How long does garden leave last?
* Durations commonly range from a few weeks up to several months (e.g., 30–90 days), determined by contract and the employer’s legitimate protection needs.

Does garden leave exist in the U.S.?
* Yes, but availability and restrictions depend on state law and contract terms. Practice is more established in some industries and jurisdictions than others.

Bottom line

Garden leave is a practical tool to manage risk when key employees leave, balancing employer protection against the cost of maintaining paid, nonworking staff. Its use should be governed by clear contractual language and applied with attention to legal limits and the business case for the arrangement. Both employers and employees should review contract terms and local law before relying on garden leave.