RESTRICTIVE COVENANTS: AN INDIAN APPROACH

ABSTRACT Organizations make an attempt to protect their trade secrets and confidential information by the use of ‘restrictive’ agreements between employers and employees, which place limitations and restrictions on the latter, pertaining to the knowledge and information gained in the course of employment and how it shall be disseminated. It is a moot debate that disputes arise as a result of diverging interests between the employer and employees and there is a need to protect the interest of each party. However, where the employer has the right to protect the invented and technical secrets, the employee has a right to strive for progress and to earn his livelihood. Article 19(1)(g) of the Constitution of India grants every citizen the right to practice any profession, trade or business. This is not an absolute right and reasonable restrictions can be imposed on this right in interest of public. The use of restrictive covenants such as Non- competition agreement, Non- solicitation agreement and Non- disclosure agreements by the employers for protecting their trade secrets and to retain the competitive edge deprives the employee of their growth and livelihood.