Home / Companies / News /  Infosys says no-compete clause in offer letter to protect client confidentiality
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Infosys defended its stance on no-compete rule in offer letters saying it is “common and standard business practice" in the sector and done to protect customer information that is “critical and sensitive". The company also informed the office of chief labour commissioner, that the clause is applicable for a limited period only.

“As part of the IT industry, our employees who are core to our business and reputation handle critical and sensitive customer projects as part of their regular services. The purpose of the clause under discussion is to ensure business and client confidentiality. Moreover, the obligation is applicable for a very limited period only," said Santhosh K Nair, associate vice president, Human Resource Department, Infosys.

Nair had addressed the letter to the office of the chief labour commissioner in a letter dated 24 May. Since then there has been another joint discussion between the ministry and Infosys and labour union that complained about the no-compete clause. Mint has seen a copy of the letter.

It all started when the Pune-based labour union--Nascent Information Technology Employees Senate (NITES) --appealed to the central labour ministry seeking removal of Infosys' non-compete clause.

“…the clause under discussion is fairly common and standard business practice in employment contract, in the IT services sector in India. Candidates voluntarily agreed to be bound by the obligations specified in the clause prior to joining the company recognising the relevance and importance of such a clause," Infosys had explained.

On 2 June, the office of the chief labour commissioner in letters to Labour Commissioner of Haryana , Maharashtra and Karnataka said that in total three sets of discussions were held and the matter needs to be forwarded to state governments for “further necessary action".

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