Divorce is about more than dividing assets or calculating support. At its core, it is about helping people navigate significant life transitions with clarity and confidence. That is why family courts look beyond numbers on a financial statement and seek to understand the realities behind a person's changing financial circumstances.
One employment concept that is becoming increasingly relevant in divorce cases is "garden leave."
Garden leave generally occurs when an employee leaves a company but remains on the payroll for a period of time while being relieved of their day-to-day responsibilities. During this time, the employee may continue to receive salary, health insurance, retirement benefits, and other forms of compensation, but is often prohibited from beginning work for a competitor or starting a new position until the leave period ends.
Although the term "garden leave" may sound like a recent workplace trend, the concept itself is far from new. Originating in the United Kingdom decades ago, employers have long used garden leave to protect confidential information, preserve client relationships, and enforce post-employment restrictions while continuing to compensate departing employees. As executive compensation has become more complex and businesses have expanded globally, the practice has become more familiar in the United States. While the terminology may be new to many people, the legal and financial issues it presents have existed for years.
That is precisely why garden leave deserves careful attention during a divorce.
For example, a spouse on garden leave may continue receiving a substantial income even though they are no longer actively working. This can affect the analysis of alimony, child support, and the parties' overall financial circumstances. The timing and nature of continued compensation may also become relevant when determining whether certain payments constitute marital or post-marital income.
Garden leave may also have implications for equitable distribution. Continued salary, deferred compensation, bonuses, restricted stock awards, or other employment benefits may require careful analysis to determine whether they are subject to distribution between the parties. The answer often depends upon the purpose of the compensation, when it was earned, and the specific terms of the employment agreement.
Another practical consideration is the use of marital funds during the garden leave period. If one spouse continues receiving income while marital assets are simultaneously being used to pay household expenses, legal fees, or other obligations, questions may arise regarding the preservation or depletion of marital assets.
At the same time, garden leave should not always be viewed as creating financial uncertainty.
For many professionals, this period provides a rare opportunity to step away from demanding responsibilities, evaluate long-term career goals, and prepare for the next stage of their professional lives. A thoughtful career transition may ultimately improve future earning capacity and financial stability, which can benefit both the individual and their family over the long term.
Of course, every situation is different. New Jersey courts generally expect individuals to make reasonable efforts to maintain or obtain employment when support is at issue. Whether a period of garden leave represents a legitimate career transition or raises concerns about earning capacity depends upon the facts of each case, including the terms of the employment agreement, the duration of the leave, and the individual's efforts to secure future employment.
As employment arrangements continue to evolve, so do the financial issues that arise during divorce. Garden leave is one example of how a seemingly straightforward employment benefit can have significant implications for support, equitable distribution, and the preservation of marital assets.
Understanding why the employment arrangement exists, not simply what compensation is being paid, often provides the context needed to reach a fair and informed resolution. In family law, that perspective can make all the difference.