Garden Leave vs. Covenants not to Compete

Tim Perri ()

No 10-07, Working Papers from Department of Economics, Appalachian State University

Abstract: 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 they are 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. Key Words: Covenants not to compete; Garden leave

JEL-codes: K12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://econ.appstate.edu/RePEc/pdf/wp1007.pdf (application/pdf)

Related works:
Journal Article: Garden Leave vs. Covenants Not to Compete (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:apl:wpaper:10-07

Access Statistics for this paper

More papers in Working Papers from Department of Economics, Appalachian State University
Contact information at EDIRC.
Series data maintained by O. Ashton Morgan ().