Garden leave: competing in the Premier League

Garden leave has long been a useful mechanism used by employers to restrict employees from performing work, attending the workplace, or having contact with customers, suppliers and colleagues during their notice period. In most instances, an employer will be entitled to place an employee on garden leave if there is an express contractual right in an employee’s contract.

The effect of an employee being placed ‘on garden leave’ typically involves the employee staying at home or away from the workplace, in an attempt to prevent exposure to the employer’s confidential information, clients and business relationships, and from working for a competitor during the period before the employment terminates.

An employee will continue to receive their pay and benefits, so garden leave does come at the price.  The employee is also still bound to comply with any contractual obligations during the entire garden leave period including any confidentiality or competition provisions.

This article will explore the importance of employers taking steps to protect their confidential information and ensuring employees comply with their confidentiality obligations both during garden leave and after the employment has ended. This is illustrated by recent events in football news this month concerning garden leave and the potential breach of confidentiality by Dan Ashworth, the Sporting Director for Newcastle United.

Garden leave: on the bench?

Ashworth was placed on garden leave in February this year after confirming his intention to leave the club to join Manchester United, after just under two years in-post. It is likely that Ashworth’s garden leave period will continue until 2025 unless an agreement is made between the competing Premier League teams.

Despite Ashworth’s short-lived but senior role for Newcastle United, it is likely he would have gained vast amounts of confidential information about the club’s tactics, players, management, and structural techniques including the development of his own expertise on which players to sign in the next transfer window in July.

In these circumstances, it is no surprise that Newcastle United has sought to place Ashworth on a long period of garden leave so as to protect the club and confidential information from potentially falling into a competitor club’s hands.

But it has been reported that Ashworth accidentally emailed himself at his current employer, Newcastle United, containing details of the secret negotiations with Manchester United.  This is alleged to have disclosed details of the terms on which he joined Newcastle from his former employer, Brighton & Hove Albion.  Newcastle says this is a serious breach of confidentiality and bad faith by an existing employee.

Key considerations for employers

The current situation serves as a helpful reminder to employers to:

• Consider the nature of their businesses and assess the restriction(s) required to protect against employee breaches of confidentiality and the specific information that may require particular protection under a contract of employment. This may include trade secrets, intellectual property rights, confidential information, details about particular customers and clients and general information which seeks to protect the stability of the workforce
• Employers should seek to include a contractual right to garden leave so that there is flexibility to exercise this right. If instigating a period of garden leave, an employer should first consider the business and financial risks, any legal restrictions, and the appropriate period of any garden leave to the particular employee i.e. how much access has an employee had to confidential information and clients and what would an employer want to protect in the circumstances?
• Consider how employee compliance ought to be monitored during a period of garden leave. For example, by requiring an employee to maintain communication to address queries regarding their obligations
• Confidentiality clauses should be drafted clearly and to suit the particular nature of a business and the information likely to need protection, so that employees are aware of their obligations during employment and any period of garden leave. Any variations to contractual clauses should be notified to an employee in writing and employers should consider reviewing employment contracts and confidentiality provisions before they no longer reflect the business needs
• When recruiting, especially if someone is joining from a competitor, make it clear in writing that they must not, and are not expected to, breach their current employer’s confidentiality during pre-employment discussions and upon joining. This helps to defend any claim from the competitor that your business is liable for inducing any such breach by the candidate.

Regardless of whether or not you are a football fan or the director of a Premier League club, all employers should ensure they have the means to monitor employee behaviour and compliance with contractual obligations during a period of garden leave and enforce confidentiality provisions for current and departing employees.

If you have any queries regarding garden leave, confidentiality and employment contracts or any other employment law issue, please contact a member of our Employment team.