Notice Periods, Garden Leave, and Non-Competes for Engineers

Notice Periods, Garden Leave, and Non-Competes: What Engineers Actually Sign and Owe

The fine print of your employment agreement matters more when you leave a job than when you sign it. Notice periods, garden leave, non-competes, non-solicitation clauses, and IP assignment terms shape whether you can take a competing offer, when you can start, and what equity you forfeit. These provisions vary substantially by company, jurisdiction, and role — and the 2024 FTC ruling on non-competes (effective in stages, with significant litigation) reshaped the landscape further. This guide covers what engineers actually sign in 2026, what’s enforceable, and how the provisions affect job changes.

Notice Periods

The amount of advance notice you owe before leaving. Common patterns:

• US tech (most companies): 2 weeks. At-will employment is the default; you can leave or be let go with minimal notice.
• UK / Europe / Australia: 1–3 months for senior IC; sometimes 6 months for executives. Notice is contractually required and often paid.
• Quant / hedge funds: 30–90 days even in the US. Used as a soft non-compete (you can’t start a new role until notice expires).
• Senior+ FAANG: sometimes 30 days, sometimes 60. Negotiable upward at staff/principal levels (your manager wants longer transition; you may negotiate exit timing as part of separation).

Practical implications:

• Plan offer-acceptance timing accordingly. If your competing offer wants you in 2 weeks but your current notice is 4 weeks, you have a problem.
• Notice periods are usually paid (you remain on payroll during the notice period). Companies sometimes ask you to leave immediately and pay out the notice as severance.
• Don’t sign for a longer notice than you’re willing to honor. Once committed, you’re contractually obligated.

Garden Leave

Paid time off where you remain employed but don’t work. Common at quant trading firms and some hedge funds. Used to:

• Prevent you from joining a competitor immediately
• Cool down your knowledge of recent strategies / proprietary info
• Maintain confidentiality of your departure

Typical structure: 30–90 days (sometimes 6 months for senior roles at HFTs). You’re paid your full base salary; you typically can’t work for anyone else during the period.

Negotiability: usually fixed at large employers; sometimes flexible at smaller firms. If you have a strong competing offer, the new employer may compensate you for the garden-leave period (effectively buying you out of the non-compete time).

Non-Competes

Provisions preventing you from working for a competitor for a defined period after leaving.

The 2024 FTC ruling

The FTC issued a final rule in April 2024 banning most non-competes nationally, effective September 4, 2024. Litigation in Texas and elsewhere stayed enforcement; the Supreme Court has not yet definitively ruled. As of 2026, the legal landscape:

• Many states (CA, ND, OK, MN, others) ban non-competes for tech employees outright at the state level.
• Other states (NY, MA, IL, WA) restrict them with income thresholds or compensation requirements.
• The FTC ruling is partially in effect; enforcement varies by jurisdiction.
• Senior executives (over $151,164/year in some interpretations) may still face enforceable non-competes.

Practical implication: read your specific agreement, check your state’s law, and consult an employment lawyer if facing a non-compete dispute. The default in California is “non-competes are unenforceable except in narrow circumstances”; this protects most CA tech engineers.

What non-competes actually look like

Typical clause: “For 12 months after leaving, you may not work for [list of competitors / similar businesses] in [defined geography].”

• Defined competitor list: better. The specific companies are clear; you know what’s restricted.
• “Similar business” framing: worse. Vague enough that an aggressive employer can argue almost any tech job is similar.
• Geographic scope: usually state or country level. Global non-competes are often unenforceable.
• Duration: 6 months is typical; 12 months pushes the limits; 24 months is rarely enforceable.

Non-Solicitation Clauses

“For 12 months after leaving, you may not solicit [our employees / customers / suppliers].” Generally more enforceable than non-competes because they’re narrower.

Practical implication: don’t actively recruit former colleagues to your new employer. Posting a “we’re hiring” message on LinkedIn that ex-colleagues see is usually fine. Direct messages to specific ex-colleagues encouraging them to apply is usually a violation.

IP Assignment

“All work-related IP belongs to the employer.” Standard clause. Two main concerns:

Scope of “work-related”

Some clauses are aggressive: “any IP you create during employment, including evenings/weekends, related or unrelated to your work, belongs to us.” California has “Labor Code 2870” protecting personal-time IP unrelated to your job.

Practical implication: in CA, side projects unrelated to your day job are usually yours. In other states, depends on contract language. If you’re working on a substantial side project, get written acknowledgment from your employer that they don’t claim it.

Open-source contributions

Most companies have open-source contribution policies. Ranges from “no open source” (rare) to “commit freely with disclosure” (common). Check before contributing significant work to public projects.

Severance and Stock Vesting on Layoff

If you’re laid off (involuntary departure):

• Severance: usually 2–6 weeks of base salary; senior+ may negotiate up. Some companies have minimum severance schedules.
• Vesting: typically frozen at termination — you keep what’s vested, lose what’s not. Some accelerated-vesting provisions for layoffs at senior+ levels (negotiable).
• COBRA / health insurance: US-specific. Federal law gives you the right to continue health insurance for 18 months at full premium cost. Cobra is expensive; budget accordingly.
• Unemployment insurance: available if eligible (varies by state). Apply promptly; some programs require quick filing.

Practical Job-Change Playbook

Before accepting a new offer

1. Read your current employment agreement. Find: notice period, non-compete (if any), non-solicitation, IP terms, severance terms.
2. If non-compete exists, evaluate enforceability for your jurisdiction.
3. Check whether your competing offer’s start date works with your notice period.
4. Consult a lawyer if any provision is unclear or aggressive ($300–800 for an hour with an employment lawyer).

During notice period

1. Don’t take your current company’s confidential info to your new employer.
2. Don’t actively recruit colleagues to the new employer (non-solicitation).
3. Maintain professionalism even if leaving on bad terms.
4. Get written documentation of vested equity, final paycheck, severance terms.

If facing a non-compete claim

1. Don’t ignore it. Aggressive ex-employers do litigate.
2. Consult an employment lawyer immediately. Most offer free initial consults.
3. Don’t unilaterally decide your non-compete is unenforceable. The cost of being wrong is high (injunction blocking your new role).
4. Many disputes settle: your new employer may pay your old employer something to release you.

Common Mistakes

• Not reading the agreement before signing. The terms become binding once signed. Read carefully; negotiate aggressive terms upfront.
• Assuming non-competes are unenforceable. Depends on jurisdiction, role, and specific terms. Don’t bet your career on it without legal advice.
• Trying to bridge the notice gap. Lying to a new employer about start dates, working two jobs simultaneously, or violating notice period are dangerous and often discovered.
• Signing aggressive IP assignment without negotiating. If you have substantial side projects, ask for explicit carve-outs before signing.
• Not getting written documentation of severance. Verbal promises don’t survive layoffs. Get terms in writing before signing the separation agreement.
• Ignoring the cooling-off period in a separation agreement. Federal law gives you 7 days to revoke a signed separation agreement; some require longer review periods. Use the time.

Frequently Asked Questions

See also: Salary Negotiation 2026 • Vesting Schedules • RSU vs Cash Bonus vs Sign-On