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Garden Leave vs. Covenants Not to Compete
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Timothy J. Perri
Published/Copyright:
August 31, 2010
“Garden leave” (GL)---when workers are paid but do not work---may be preferred by firms since courts are more likely to enforce GL than “covenants not to compete” (CNCs). We consider when GL is more profitable than a CNC. Also, assuming it is optimal to offer GL or a CNC, we find (1) the optimal length of either GL or a CNC is the same, (2) firms share fewer trade secrets with GL than with a CNC, and (3) the extent of innovation will be higher with a CNC than with GL.
Published Online: 2010-8-31
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
- Article
- Surprise! Most Blockbuster Jury Awards Are Ignored By The Stock Market
- Garden Leave vs. Covenants Not to Compete
- On Avoidance Activities After Accidents
- Disregarding the Attorney's Advice: An Agency Perspective
- The Efficiency of Comparative Causation
- Does Limited Liability Matter? Evidence From Nineteenth-Century British Banking
- Conviction, Partial Adverse Selection and Labor Market Discrimination
- Criminal Associations with Bargaining and Build Frictions
