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)
Date: 2010
New Economics Papers: this item is included in nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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: https://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.
Bibliographic data for series maintained by O. Ashton Morgan ().