Non competitive agreement is a legal agreement that restricts an employee from dispensing any organizational information to a third party who is not associated with the same organization. Prorating trade secrets can give rise to legal issues that may take the employee to court.

Certain ambiguous reports or documents if leaked outside may cause an economic loss to the company. Every organization stores some unrevealed information that cannot be shared with a competing organization hence this clause is imbibed in the signatory document.

Such a document is approved at the beginning of the employment and if an employee does not wish to sign it, the employment could be terminated. On termination, this clause is not enforceable. Though the organization pressurizes its employees to accede with this clause, the courts may not approve of it. No organization can hinder an individual’s ability to earn a living but that doesn’t mean revealing secretive information that can harm/defame an individual or organization.

The clause is designed to protect confidential information and organizations should not insist or create any unreasonable enforcement. In case the requirements are not met with, the company can sue the employee and it may lead to a long court ordeal.

It is said that ‘the secret to creativity is knowing how to hide your sources’ and that is exactly why the companies impose these restrictions on the employees. It is the employee’s duty to respect its organizations secrets and at the same time the organization should appreciate every employee’s privacy.

Human Resource- A Magazine For The Discerning Professional

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