“Gardening Leave” is a legal concept we have imported from England and is often used as a paid notice period to effectuate non-competition and a continuation of the duty of loyalty without the stigma of an outright non-compete. In a recent High Court decision, Thomson Ecology Ltd. v. Apem Ltd, et al. (9/24/13), Deputy Judge John Martin set strict standards on the conduct of a departing employee in terms of communicating his decision to leave to his superiors and to his colleagues and the legal implications of the timing of both.

Upon giving his thirty-day notice of resignation, the employer instructed the employee not to return to work and effectively “work in his garden.” The employee spent the month planting the seeds for his new employer, assisting in the recruitment of numerous co-workers by speaking with them about his plans and the opportunities presented by his new employer, as well as arranging interviews and sharing salary information of his colleagues with his new employer.

The High Court determined that a company employee who had given notice of termination of his employment and accepted an offer of employment from a competitor had breached his contractual duty of good faith and fidelity by failing to report to his superiors the threat presented by a competitor’s intention to build out an area with increased staffing and then by actively assisting the competitor in identifying and recruiting the company’s staff.

While the principle of “duty of loyalty” appears quite similar under English Law, the concept of an affirmative duty to speak up if aware of co-workers possibly leaving applicable to a mere employee versus one holding a fiduciary duty such as a partner or executive officer may be greater under English law than most U.S. based courts would impose upon a regular employee. While this case is just at the preliminary motion to dismiss stage we will continue to follow it and see what occurs on a more fully developed factual record.

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