Garden leave

Garden leave addresses a specific problem in a business sale or a key departure: the gap between announcing a change and the person actually being gone, during which they still have access to customers, staff and sensitive information a new owner would rather they not use on their way out the door.

Where it shows up around a sale

• A seller who agrees to stay on briefly for transition purposes, but is kept away from day-to-day operations once the buyer takes over
• A key employee whose employment is ending but whose notice period a new owner would rather not have them work through
• A departing executive with access to sensitive client relationships the business wants to protect during their exit

The mistake people actually make

Assuming garden leave automatically functions as, or extends, a non-compete. It does not — garden leave is a contract term governing pay and duties during a notice or transition period, and on its own it does not stop the person from working for a competitor once the leave ends. If that is also the goal, it needs its own restrictive covenant language, negotiated separately.

This is a contractual arrangement rather than a term defined by statute anywhere in Canada, so it works the same way — as a negotiated term of an employment or transition agreement — in Quebec as elsewhere, though Quebec’s Civil Code separately addresses the underlying notice-of-termination obligations that a garden leave clause typically sits on top of.