“Garden Leave” Could Add Value as Noncompete Alternative

As described by online sources, companies outside the United States have been using “garden leave”-type agreements for a long time as a means of keeping outgoing employees from taking proprietary knowledge to a competitor or using their knowledge to start a rival business. That approach may gain traction in the U.S., with the Federal Trade Commission’s [attempted] ban on non-competes. Some companies in Massachusetts and New York already use them. Under garden leave, employees are paid a portion of their compensation for a period of time after exiting in exchange for their not leveraging what they know to compete against their former employer. (Under the Massachusetts law, the pay must be at least half of the employee’s recent base salary.) 

A method described to avoid “double paying” for the same job to get done, the agreements can be structured to turn the outgoing employee, at least for a portion of the agreement term, into a resource that helps create a smooth transition as a replacement comes on board.