What are garden leave and restrictive covenants?
Both are mechanisms employers use to limit what you do after you resign, and they work very differently.
Garden leave keeps you employed but away from the workplace during your notice period. You remain on full pay, remain bound by all your duties including confidentiality and loyalty, and crucially cannot start a new job, because you are still employed. The employer gets to keep you out of client contact and away from current information while your knowledge goes stale.
It requires a contractual clause in most cases, and it is generally enforceable because you are being paid. The trade-off for the employer is paying someone to do nothing, which limits how long they will use it.
Restrictive covenants (post-termination restrictions) operate after employment ends. The common types:
Non-compete — barring you from working for a competitor for a set period.
Non-solicitation — barring you from approaching former clients or customers.
Non-dealing — barring you from doing business with them even if they approach you.
Non-poaching — barring you from recruiting former colleagues.
How enforceable are they? In England and Wales, restrictive covenants are void as a restraint of trade unless the employer can show they protect a legitimate business interest — trade secrets, confidential information, client connections, workforce stability — and go no further than reasonably necessary to do so. Courts look at duration, geographic scope and the breadth of activity restricted.
Overreaching clauses routinely fail. A twelve-month worldwide non-compete on a junior employee is unlikely to survive; a six-month non-solicitation on a senior salesperson with client relationships very well might.
Garden leave usually offsets the covenant period, and courts may reduce a restriction by the time already spent on garden leave.
Enforcement varies enormously by jurisdiction — some US states void non-competes entirely. Take advice before relying on a clause being unenforceable.