Every business has a body of information that it considers to be secret, confidential, sensitive and integral to that business’ success. Information that, if disclosed to another person, particularly a competitor, could cause significant damage to that business.
In order to protect a business’ market position, employers often attempt to restrict the use of such information by requiring employees to enter into contractual restrictions (usually within their contract of employment) that apply both during employment and after the employment ends.
In broad terms, the methods of restricting employees from competing with their employer fall into two categories:
- restrictions applying for as long as the employment relationship continues; and
- restrictions applying after the relationship ends.
When an employment relationship is nearing its end, an employer may use an alternative to or supplement restrictive covenants by putting an employee on “garden leave” during his notice period. This is examined in more detail below.
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