With frequent shifts in employments by employees and increasing global competitiveness, it has become necessary and industry practice amongst the employers to safeguard their interests in employment contracts. This is usually achieved by incorporation of restrictive covenants in employment contracts. A restrictive covenant essentially restrains the employee to do certain things, both during and after cessation of employment. Notable instances of such covenants include clauses such as non-compete, non-solicitation and protection and non-disclosure of confidential information. The contract usually considers breach of such covenants as breach of contract and secures relief of injunction and damages in such cases.
Though the employer may be justified in Inclusion of such covenants in the contracts, mere inclusion of the same does not make them automatically enforceable. Enforceability of such covenants depends upon the reasonableness of the covenant. This includes the duration for which such obligation is cast upon the employee, particularly post cessation of employment. The verbiage of such covenants, surrounding circumstances and the impact of such clauses are the deciding parameters in validity and enforceability of such contracts.