A notice period requires an employee to give advance notice of resignation, during which the employer may relieve them of duties while continuing pay. It is an increasingly common substitute for a post-employment non-compete.
Why it is more defensible. The employee is paid throughout, remains an employee with continuing duties of loyalty, and is not deprived of a livelihood. Courts and legislatures hostile to non-competes have been more accommodating to reasonable paid notice periods.
Duration. Periods of one to six months are typical, with longer ones for senior roles. Excessive length attracts the same scrutiny as a non-compete.
What it achieves. Information goes stale; client relationships can be transitioned; a successor can be recruited; and the departing employee cannot begin competing immediately.
Enforcement. Specific performance of personal services is not available, so enforcement is through an injunction restraining work for a competitor during the period, damages, and forfeiture of unvested compensation.
Drafting points. Reserve the right to require the employee to remain away from the workplace; continue salary and benefits expressly; confirm the duty of loyalty and confidentiality continues; address whether the period runs concurrently with any post-employment restriction; and address what happens if the employer terminates.
Interaction with pay. Some jurisdictions require the pay to be genuine and not reducible to a token.