The compromise agreement may include a provision dealing with a ‘garden leave.’ The term is describing any situation wherein an employee is asked or required to serve a period of notice outside the office, probably at home, thus the phrase. During the entire period of notice, the employee would continue to receive every salary and benefit provided as a regular employee. However, the same employee is still prohibited from taking another employment from any new potential employer until the entire garden leave period has expired.
The garden leave in a compromise agreement provides employers an opportunity to temporarily prevent the employees from possibly sharing or divulging sensitive information or trade secrets to other companies, specifically competitors. The idea is that a departing employee may possibly be employed by a competitor not just because of his skills and qualifications but because of his knowledge about key data regarding the former employer’s business, including sensitive information and access to customers.
If you are an employee whose employment is being terminated, the employer may opt to keep you away from the office during the entire notice period. If you would look into the situation very closely, you may realize that there are numerous possible reasons for this. It does not necessarily mean that you as an employee have done something wrong. Again, you may have direct access to very sensitive information and the employer wishes to hold protection to those information. It could also be interpreted as an attempt by the employer to protect goodwill.
It would always be important to review your employment contract to find any specific provision that may give the employer the right to abruptly send you on any garden leave. In case there is no certain provision for a garden leave, the employment solicitor you would hire for evaluating the compromise agreement could discuss with you any preference about such a leave and possibly negotiate for one, if necessary. Some employees take a garden leave as a likely and favorable provision in a compromise agreement because it facilitates a paid vacation, although it would lead to unemployment after the specified period.
It is highly unlikely that any garden leave would affect the overall settlement figure from the compromise agreement. However, in case the employer opts to keep you under his payroll for a longer period than usual, you may have the leverage to negotiate for a more suitable exit payout. One possible reason why an employer may do so is that your position is very important within the organization and there may still be on-going issues that require your attention and expertise. In the end, it is up to you whether you would comply with the employer’s wishes and garden leave provision.
Hire a reliable and trustworthy employment solicitor if you intend to be properly guided in assessing and finalizing a compromise agreement, particularly the garden leave provision. In some cases, the garden leave could be a possible loophole that may serve as an attractive trap for any employee not to gain a more favorable compromise agreement.