What Does A Garden Leave Provision Really Mean?

What does the garden leave provision really mean for you, the candidate? Find out more here.

In the past, we have explored the essential questions that you must be prepared to address and the manager’s responsibility. We are going to jump ahead before following up next week with more essential points to cover.  Today we are going to explore the crucial topic of garden leave.  Even though firms are letting people go, some professionals are electing to leave for various reasons.  Most of those bankers that are electing to leave have a garden leave provision.

What Is Garden Leave?  

This is an area of concern as it appears to be much more prevalent within the public finance and bond counsel space. So, let’s explore the entire concept of garden leave and what that means to you.  As articulated by Inside Counsel on November 25, 2013, “A garden leave provision is one in which the employee is required to give a certain period of notice prior to terminating employment. The garden leave clause provides the employer the right to change the employee’s duties or effectively suspend the employee for the balance of the notice period. During the notice or garden leave period, the employee remains an employee, subject to the direction and control of the employer and receiving at least base salary compensation.” Now that we have presented the technical view, let’s look at the rationale more technically.  The rationale of employers seeking enforcement of the clause is that placing the employee in the garden before joining a competitor serves to protect the employer’s trade secrets and goodwill with clients. It also provides an opportunity to implement a seamless transition of employee responsibilities free from interference from the departing employee.

What Does The Garden Leave Provision Mean For The Hiring Process?

In essence, if you are subject to a garden leave provision, your current employer can prevent you from starting a new position until the term of the garden leave has run its toll. The first question that usually is asked of a recruiter is, “What does that mean to me with even getting an offer?” The simple answer is that the firms that we are dealing with on a regular basis are more than willing to hire an individual who is contained under a garden leave provision. Firms are well aware of these provisions in employment agreements, so they are more forgiving of the time delay between your departure from your old firm to your entrance at the new firm. Secondly, more and more firms that are being subject to waiting for a garden leave to run are also enforcing garden leaves in their employment agreements; therefore, it is hard to complain about a candidate subject to a garden leave provision.

How Firms Treat The Leave

However, based on our limited experience to date with the garden leave provision, firms are going to treat the leave provision differently based on numerous business and personal factors.  We have seen firms “punish” an employee from leaving and hold them to the full term of the provision. We have seen other firms keep an employee around long enough to help the firm transition a new internal person to the now-vacated position. Once the transition is complete, they release the employee from further time constraints. We have seen firms try to market themselves and pick up the business that the old employee will undoubtedly move. Later they give up because the cost of paying an employee to sit on the sidelines is not economical as the cost to wait for his business not to move and remain with the current firm. There are probably as many reasons to enforce the provision as there are not to enforce the agreement. The result is that firms will either wait out the garden leave timeline or negotiate with the current firm if you are an employee that they want. In the grand scheme of things, what’s another 60 or 90 days?!


If you would like to discuss your options, please reach out for a confidential conversation at 760-477-1284 or email at [email protected]. He can also be reached on LinkedIn. Harlan publishes a blog every Thursday here. Subscribe to our monthly newsletter here, which is a compilation of our weekly blogs, so you never miss one. You can find our listing in the “supplier and services” section of the Red Book under the title of “executive recruiting.”

About Harlan Friedman, JD & Founding Member, H. Friedman Search LLC. Harlan is a thirty-year veteran Public Finance Banker turned recruiter who specializes in the placement of all levels Public Finance Bankers, Healthcare Bankers, Municipal Advisors, Compliance Officers, Issuers, and Bond Counsels.