Legal Updates

Knowledge of a trade secret is a legitimate interest that justifies, under certain circumstances, enforcement of a restrictive provision in an employment agreement

March 19, 2017
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An online gaming software development company moved the Court for an injunction to prevent a former employee from working for a competing company because he signed a commitment not to compete with the company for 6 months after termination of employment.

The Court held that an employer's desire to prevent employees from competing is by itself not a "legitimate interest" that justifies limiting their freedom of occupation. However, the "proprietary" or "quasi-proprietary" interest of the employer in confidential information or the interest deriving from the duty of good faith owed by employees to their employers do constitute a "legitimate interest" that may justify restricting an employee's occupation.  In this case the employee holds specific knowledge regarding the product as well as plans for future development of the product and thus it is justified to restrict the employee's employment for three months only, in which the employee will receive monetary compensation at the amount of salary expected in the new position.