Restrictive Covenants Of Employment & Contract Act

INTRODUCTION

In human resource, a restrictive covenant is a clause which limits an employee from seeking placement till a certain time limit after leaving the business/organisation. Some noteworthy restrictive covenants are contracts pertaining to confidentiality, non-disclosure and non-solicitation matters.

Such covenants are usually incorporated and subsequently enforced so that employees can be prevented from disclosing confidential and other important information to which employees are made privy-to during the course of their employment.

These are often considered contentious issues because such provisions seemingly clash with Section 27 of the Indian Contract Act, 1872 (ICA) which provides that: