What does non-competition clause do?
- Acts as a restrictive clause against Mr. Athokpam
- Restricts him from competing with Legal Bolts Consulting or joining its competitor
- Restriction is during the term of his employment and for a period thereafter.
What is the purpose of non-competition clause?
- Lowers risks associated with disclosing trade secrets and confidential information
- Enables Legal Bolts Consulting to claim a protectable interest in trade secrets and confidential information of Legal Bolts Consulting and its customers and clients, and their business, technical and financial knowledge
- Enables Legal Bolts Consulting retain valuable employees
- Prevents unfair competition.
The clause has to be properly used to be an effective tool to protect and advance the value to a business.
The Enforceability or Non-Enforceability
Whether you are an employer or an employee, you will face many questions regarding the enforceability of non-competition clauses. Some of the applicable standard rules are given below. Our team can help you with supporting legal information to help you make informed decisions.
- Non-competition clauses are enforceable during employment and not post employment.
- Employers are encouraged to include non-competition clauses due to its deterrent effect.
- In an employment agreement, non-compete clause is permissible in limited circumstances (particularly with post termination). It is fact-driven.
- Clause on confidential information (trade secrets) supports enforceability of non-compete clause.
- An employee cannot be stopped from joining a competitor just because he is privity to certain trade secrets.