PUTTING TOGETHER THE EMPLOYER PROTECTION PUZZLE: DO NEGATIVE COVENANTS ACTUALLY WORK?

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Overview

Many companies that are carrying on their business in financial, engineering, IT sectors face the phenomenon called “employee theft”, which in most cases results in reducing of companies’ profits, demolishing potential perspectives of startups and thus endangering the latter’s thriving future. In the past few years, employers seek to find a remedy to prevent the “leak” of skillful labour from their business. Despite the “infinite inclination” of the employers to keep harmless and avoid any negative impacts on their business from their former employees, it should be noted, however, that this “desirable wish” shall not be discretionary and limitless. It is worth mentioning that this “restrictive mechanisms” must strike a fair balance between the legitimate interests of the employers and employees. Thus, this Note describes the main features and issues of enforceability of Non-Compete, Non-Solicitation and Non-Disclosure Covenants (hereinafter referred to as “Restrictive Covenants” or “Restrictive Clauses”) in the Republic of Armenia.