The year 2019 was the worst in the history of data breaches. More than 5,500 large breaches resulted in approximately 8 billion leaked records. Most affected sectors were health, followed by financial, energy, industrial and pharma. Even the Education sector was badly hit. A worrisome factor of these breaches and hacks is that the average time to discover a breach is more than 200 days (IBM study). As this article was being written, news came that in May 2020 8.8 billion records had been breached, exceeding the volume of the entire last year.
The effects and potential harms of a data breach are multifarious. Apart from a breach of privacy and loss of money to the customers, data breaches result in loss of business to the corporates. The biggest breaches in numbers included 275 million records of Indian job seekers, Microsoft’s 250 million customer records, phone numbers of 419 million Facebook accounts that were leaked, 139 million users of the graphic design service Canva. Another disturbing trend is the increasing cost of the average data breach. The IBM’s latest annual Cost of a Data Breach study pitches it to $3.92 million per breach. These costs include notification costs, forensics and investigation, damage control, repairs, lawsuits as well as regulatory fines and other administrative costs.
The legal obligations to secure personal information include an expanding set of laws, regulations, enforcement actions, common law duties, contracts, and selfregulatory regimes. The Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 requires businesses to use “reasonable security procedures and practices to protect personal information from unauthorised access, destruction, use, modification, or disclosure. The organisations should adopt security standards to achieve an appropriate standard of care for personal information. Some practices Indian corporates can adapt are:
There should be timing provision, which allows for achieving an appropriate balance with a specific deadline intended to prevent major delay, the outer bound may become the de facto standard for notification. The time needed from discovery to notification with specific industry as a deadline of 30 or 45 days would be too long in many industries, and might be too short in others. This provision of timeframe must also be in tune and updated as what constitutes a reasonable time for notification today might be unreasonable tomorrow, as technological improvements allow for faster forensic analysis, cheaper and more effectively targeted notice, and an improved ability by companies to quickly provide consumers with remedies.
Easier the better. Such breach notices shall be easier to understand by using/ restricting to a format that will make them easier to understand by prescribing one of two options: (i) use the title “Notice of Data Breach” and the headers “What Happened”, “What Information Was Involved”, “What We Are Doing”, What You Can Do”, and “For More Information;” or (ii) use the form provided in the statute. There can be a provision for mandating the companies to post such breach notice on their website after
How do breaches occur?
1. System vulnerabilities: Cybercriminals are constantly looking to exploit and when most software companies are updating their products to keep up with advancements in hardware capabilities, some of these updates create unexpected vulnerabilities. At times, it is not the software upgrade that is vulnerable but thirdparty vendors that may have access to your system are not secure. One such example: the Target data breach (one of the largest data breaches in history).
2. Weak passwords: Using passwords such as ‘password’ or ‘123456’ which tops the list of most commonly used passwords in the last decade. Or the extreme of using most complicated passwords and frequent password changes which forces employees to write and often store in unsecure or predictable locations. Reusing passwords which makes it easier for hackers to target sites with minimal security, helping them to break into sites with much higher security.
3. Employee negligence: Employee negligence is number one cause of all security breaches. One of the prime reasons for a ransomware attack is the result of a phishing or social engineering attack aimed at tricking employees into clicking on a malicious link.
1. Limit access: Restrict providing any one employee access to all systems. Provide access only to those systems and the specific information that are necessary in respect to their jobs. Also, make sure you disable and purge old user accounts. Disable user accounts after employee’s exit.
2. Back up important data: Back up important data on each computer used in your business. It is necessary to back up this data because computers die, hard disks fail, employees make mistakes, and malicious programs can destroy data on your computers. Test your backups to ensure they can be read on regular intervals.
3. Securely dispose of stored data: When disposing of old computers containing sensitive information, business or personal data, make sure the same is cleaned and disposed of securely.
4. Unique accounts: Each of your employees should have an individual account with a unique username and password. Without individual accounts for each user, you may find it difficult to hold anyone accountable for data loss or unauthorised data manipulation.
Data breaches are here to stay; corporates should evolve a strategy of risk governance rather than risk avoidance. This entails changes in the way we acquire, process, retain and dispose of data. With the advent of a data protection legislation in India, it would be incumbent upon anyone dealing with data of personal nature to take stringent measures with a view to protect individual privacy, dignity and other legitimate interests.
Cyber security has been gaining ascendance as a critical business consideration, and today it has become existential. Corporates and governments need to understand that there is a huge cost-benefit asymmetry in cyberspace, which needs to be addressed as of yesterday. This would entail huge investments in encryption, anomaly detection, threat hunting, hardening of critical infrastructure, collaboration and threat intelligence sharing. A comprehensive understanding of what one is protecting and how it can be attacked is essential to build the right data protection posture.
Data today is not limited to its economic value; it has myriad dimensions ranging from strategic to aspects of statecraft. Data is the new oil, more inflammable than the other; it is time to get the act right or risk losing reputation, trust, business and even sovereignty.
Brijesh Singh is Inspector General of Police, Maharashtra, and Khushbu Jain is a practicing advocate in the Supreme Court.
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PRESIDENT BIDEN SET TO ADOPT A HARD LINE ON CHINA
On Tuesday, 19 January, less than 48 hours of Joe Biden assuming office as the 46th President of the United States, outgoing Secretary of State Mike Pompeo issued a statement on China’s record of persecuting Uyghur Muslims in the harshest possible terms. He referred to Nazi Germany and equated the treatment of Uyghurs by the Communist Party and Xi Jinping as “genocide”. The statement ended with the assertion, “We will not remain silent. If the Chinese Communist Party is allowed to commit genocide and crimes against humanity against its own people, imagine what it will be emboldened to do to the free world, in the not-so-distant future.” Significantly, Antony Blinken, who is Biden’s choice for Secretary of State, echoed Pompeo, when at his Senate confirmation hearing on the same day, he was asked if using the term genocide was correct. “That would be my judgement as well,” he replied. “Forcing men, women and children into concentration camps, trying to in effect re-educate them to be adherents to the ideology of the Chinese Communist Party, all of that speaks to an effort to commit genocide,” he added. Blinken also said that “…President Trump was right in taking a tougher approach to China… I disagree very much with the way that he went about it in a number of areas, but the basic principle was the right one, and I think that’s actually helpful to our foreign policy.” Blinken went on to talk about Hong Kong, where “democracy is being trampled”, and how the US under Donald Trump should have acted sooner on the matter.
In fact, China was the dominant theme in other confirmation hearings as well on Tuesday. Avril Haines, who is Biden’s choice for director of national intelligence, said that countering the threat from China would be her top priority; while Biden’s choice for Treasury Secretary, Janet Yellen was equally categorical. “We need to take on China’s abusive, unfair and illegal practices…we’re prepared to use the full array of tools” for this purpose, Yellen said. She also flagged China’s “horrendous human rights abuses”, apart from accusing China of “undercutting American companies” by providing illegal subsidies, by dumping products and by stealing intellectual property. In other words, the tone has been set for President Joe Biden’s China policy. It is going to be as hard line as Donald Trump’s, minus the “spectacle”, the drama, the confusion and the incessant flow of tweets that had become synonymous with the Trump presidency. There will be continuity in foreign policy.
These statements coming from Biden’s Cabinet picks will be music to the ears of those who were apprehensive that the Biden administration would revert to Barack Obama’s—and in general Democratic—policy of humouring China in the hope that it would be integrated into the rules-based political and economic global mainstream and become open and democratic. Blinded by this belief, Obama did not lift a finger when China illegally grabbed the Scarborough shoal in 2012. He thus left all US allies in the South China Sea disillusioned and helped China entrench itself in that region. The worry was that Biden, being an Atlanticist, would stay focused solely on Russia, when it is China that is the clear and present danger, with Moscow at best an appendage of Beijing. India, in particular, can expect that there will be continuity in US’ Indo-Pacific strategy as well under President Biden, for the centre of gravity of geopolitics has shifted to the Indo-Pacific and the primary goal of the free world should be to ensure that China is unable to remake the international order with Chinese characteristics.
The sound-bites coming from Washington will not be music to China’s ears, considering Chinese foreign minister Wang Yi has been vocalizing Beijing’s hope for “a smooth transition in China-US relations” post Trump. But then perhaps Mr Yi has forgotten the tiny detail about the Wuhan virus that his government has unleashed on the world—the virus that infected around 2.4 million people and counting, in US alone, apart from killing nearly 400,000 people in that country. The world will find it difficult to forgive Xi Jinping for this genocide and US is no exception.
In this context, mention must be made of the strange role that the European Union is playing in all this—scurrying to cut business deals with China. It’s as if the virus did not happen; as if there is no need to seek accountability from China for crippling the world economy and for killing over 2 million people; it is as if democracy has not been killed in Hong Kong or Uyghurs have not been sent to concentration camps; it is as if China is not a malevolent power. It is as if security/sovereignty and trade can exist in silos. Driven by domestic economic compulsions, EU seems to have calculated that the US is a spent force and China’s time has come. Hence, President Biden has his job cut out: to reclaim the global primacy that the US is perceived to have lost to China. For that, he first needs to convince his EU allies—a part of the “free world” with which he hopes to counter China—that a world with Chinese characteristics will not be a pretty one.
PM Modi’s formula for winning the Covid war
Prime Minister Narendra Modi utilised the pandemic as an opportunity to reach out to and heal millions, both in India and outside, showcasing the country’s true spirit of ‘Vasudhaiva Kutumbakam’, which means that ‘the world is one family’.
The Modi government has decided to export Covid vaccines free of cost to its neighbours as a ‘goodwill gesture’. Covaxin will be sent to seven countries, including Mongolia, Oman, Myanmar, the Philippines, Bahrain, Maldives and Mauritius, while Covishield is being sent to Bhutan, Afghanistan, Nepal, Bangladesh and Seychelles. The government will procure the vaccines for export through the government-run pharmaceutical company, HLL Lifecare Limited. The country had exported hydroxychloroquine (HCQ) last year through the same company to many other countries. India plans to offer 20 million doses of the Covid-19 vaccine to its neighbours, once again showcasing how Prime Minister Narendra Modi’s war against the Wuhan virus has been guided by the abiding principles of “India First” and “Neighbourhood First”.
The cumulative number of healthcare workers vaccinated against the coronavirus touched 6.31 lakhs in the first four days itself, through 11,660 sessions. Of the total people vaccinated against Covid-19 so far, 0.18 percent experienced adverse events following immunisation, while 0.002 percent had to be hospitalised, which is fairly low. Hence, concerns about adverse effects and serious problems post-immunisation as of now are unfounded and negligible, with both the “Made in India” vaccines being completely safe.
On 16 January 2021, India, the world’s largest democracy, with a population of 1.38 billion people, kickstarted the world›s largest Covid vaccination drive, with 2.07 lakh people vaccinated in a single day across 3,351 sessions and with the help of 16,755 vaccinators. What makes India›s vaccination drive against Covid unique is the sheer size, scale and meticulous planning of this mammoth exercise, guided by the humanitarian concept of “Jan Bhagidari” or people’s participation. The plan is to inoculate 300 million or 30 crore “priority population” in the first two phases by July-August 2021, including 3 crore healthcare and frontline Covid workers in the next three months in the first phase itself. Inoculating 300 million people within six to seven months is akin to vaccinating almost the whole of America or vaccinating the combined populations of Germany, the United Kingdom, Italy and France, in record time!
Union Home Minister Amit Shah, while laying the foundation stone of a new battalion campus of the Rapid Action Force (RAF) near Bhadravathi in Shivamogga district, recently summed up the crux of India›s gigantic pushback against Covid when he said, “India under the leadership of Prime Minister Narendra Modi has fought the most successful battle against coronavirus in the world, and with the beginning of the vaccination drive, the country has taken the fight against the pandemic to a final stage”.
“The whole world has been fighting against the coronavirus for about a year, many people have lost lives. This was probably one of the toughest fights that humanity has fought, using knowledge, innovations and mutual cooperation,” Shah further added.
India has reported less than 20,000 daily cases over the past 10 days and less than 300 daily deaths for the last 23 days, pushing the national recovery rate to a solid 96.58 percent and the case fatality rate (CFR) to just 1.4 percent, the lowest globally. The active caseload now is less than 1.98 percent and the daily positivity rate is also pretty low, at barely 1.8 percent. India›s cumulative positivity rate is hardly 5.6 percent, which is commendable given that many states in America like Florida and Connecticut are still reporting daily positivity rates as high as 8.55 percent. It is indeed noteworthy that despite having a density of population of 455 per sq km, amongst the highest in the world, India has tested over 170 million people and done an extraordinary job of reining in the total number of cases at 10.6 million. In sharp contrast, the USA, with a population density of just 36 per sq km, has reported a staggering 24.3 million coronavirus cases and 163 percent higher deaths than in India.
The Modi government has built a war kitty of 2,360 master trainers, 61,000 programme managers, 2 lakh vaccinators and 3.7 lakh vaccination team members so far. The Serum Institute of India’s Covishield and Bharat Biotech›s Covaxin, which it has developed with the Indian Council of Medical Research (ICMR), are homegrown vaccines that vindicate PM Modi›s clarion call of “Vocal for Local” and are reflective of the country›s immense innovative and scientific temper. Both the vaccines have been approved by the Drugs Controller General of India (DCGI).
The Modi government has procured 11 million doses of Covishield at a cost of Rs 200 per dose, exclusive of taxes. Of Bharat Biotech’s Covaxin, the number is 5.5 million doses, of which 1.65 million doses are being procured free of cost, and the remaining 3.85 million doses are being purchased at a cost of Rs 295 per dose. In effect, India›s vaccine roll-out is not only the largest in the world, but also the most affordable, with no compromises whatsoever on any standard operating procedures (SOPs). The PM-Cares fund will bear the entire cost of the first phase, which will inoculate 3 crore frontline Covid workers. Earlier, in June 2020, over Rs 2000 crore had been allocated from the PM-Cares fund for the supply of 50,000 ‘Made-in-India’ ventilators to government-run Covid hospitals in all states and UTs. Out of the 50,000 ventilators, 30,000 ventilators were manufactured by Bharat Electronics Limited, again showcasing India›s indigenous manufacturing prowess. While a jaded, directionless and clueless Rahul Gandhi keeps taking needless jibes at the Modi government, the fact of the matter is that for over six decades, India just had 47,000 ventilators, whereas in one go, in June 2020, the Modi government made available 50,000 ventilators to ensure that no life is lost for want of life-saving equipment.
PM Modi›s food security scheme for the needy, called the Pradhan Mantri Garib Kalyan Yojana (PMGKAY), provided free ration to 81 crore people every single month, for nine months in a row, during the pandemic. Effectively speaking, this means that a population 2.5 times the size of America was fed every month, showcasing the Modi government’s generous, welfarist and people-centric approach.
Contrast the policy of obfuscation and apathy followed by China with the probity and transparency shown by India in taking Covid head-on. Be it building over 116 million toilets under the «Clean India›› or «Swachh Bharat» mission, making India›s 5.5 lakh villages open defecation-free (ODF), giving free health insurance to 50 crore Indians under the «Ayushman Bharat» scheme, producing over 60 million PPE kits and 150 million N95 masks in 2020, bringing home over 3.9 million stranded Indians from different parts of the globe via the “Vande Bharat Mission”, or extending medical and humanitarian assistance to over 150 countries in the fight against the pandemic, the Modi government›s fight against the Wuhan virus was made easier by the fact that a huge amount of effort has gone into ramping up India›s health infrastructure and making cleanliness a way of life in the last 6.5 years.
What is worth mentioning here is that, during the initial days of the Covid outbreak, there was only one lab in the country that could undertake testing for the infection. But today there are over 2000 testing laboratories. Punjab’s case fatality remains at 3.20, amongst the highest in the country. Meanwhile, Maharashtra, which has recorded the highest number of Covid deaths in India, has the second highest CFR of 2.56. Had it not been for the high Covid fatality rates from these two states, India›s CFR of 1.4 percent would have been even lower. Maharashtra, which is currently a non-BJP-ruled state and is led by a Congress-centric alliance, is, in fact, one of the worst performing states, having reported close to 50,000 deaths already. Despite having just 8 percent of India›s population, Maharashtra accounts for almost 33 percent of India›s Covid-related fatalities, showcasing how a poor and lethargic leadership can be a bane during a global health crisis. In sharp contrast, Uttar Pradesh, a BJP-ruled state, which has a massive population of over 200 million people and is almost the same size as Brazil, has reported less that 8,600 deaths. Brazil, in the meanwhile, has reported over 2.1 lakh mortalities.
The Modi government›s massive vaccine roll-out plan has put in place an end-to-end traceability mechanism with RFID and barcoding to secure and monitor the supply chain, transportation and distribution, right from the manufacturing facility to the time the patient is inoculated. Automated data loggers that monitor storage temperature and transfer messages every three seconds to a central unit under tight surveillance 24/7 have been deployed. The mega immunisation drive may see high-speed vehicles transporting the vaccines, secured by rifle-wielding escorts on the outside and highly secure Internet of things (IoT)-enabled locking system from the inside, to prevent theft and counterfeiting.
More importantly, there is the Modi government›s CoWIN (Covid Vaccine Intelligence Network), with 80 lakh beneficiaries from the first priority list already registered on the app. The CoWIN platform is owned by the Ministry of Health and Family Welfare and was earlier the platform used for conducting Pulse Polio and other crucial and highly successful immunisation programmes across the country. The same platform has been expanded for doling out Covid-19 vaccines and the Ministry of Electronics and IT along with the National Informatics Centre are handling the backend and the tech infrastructure for it. CoWIN is again an example of how the Modi government has seamlessly embraced technology to ensure last mile delivery. When it does become open to everyone, it will have four modules—user administrator, beneficiary registration, vaccination and beneficiary acknowledgement, and status updation. The CoWIN app is likely to be made accessible to the general public for registration by the end of March-April 2021. The idea behind the CoWIN app is to create a digital health behemoth. The CoWIN app has two parts: one that will be used by the beneficiary and the other that will be a back-end module to be used by vaccinators.
To cut to the chase, if 2020 was a year that tested the human will to survive, 2021 is slated to be the year that will heal the world and restore faith in the ability of leaders who are both courageous and compassionate. «Good governance is not firefighting or crisis management. Instead of opting for ad-hoc solutions, the need of the hour is to tackle the root cause of the problems››, as a famous quote by PM Modi goes. Better words have not been said. Undoubtedly, India›s outstanding and successful war against Covid will go down in history as a textbook case of what a sensitive and nimble footed leadership can accomplish.
It would be apt to conclude with a quote by John F. Kennedy, who said, “When written in Chinese, the word ‹crisis› is composed of two characters. One represents danger and the other represents opportunity.” Undoubtedly, while a reckless China foisted the Wuhan virus on an unsuspecting mankind, a visionary leader like PM Modi utilised this unprecedented global crisis as an opportunity to reach out to and heal millions, both in India and outside, showcasing India›s true spirit of “Vasudhaiva Kutumbakam”, which means that “the world is one family”.
The writer is an economist, national spokesperson for the BJP and the bestselling author of ‘Truth & Dare: The Modi Dynamic’. The views expressed are personal.
OLD-STYLE POLITICS TAKES OVER THE ASSEMBLY POLLS 2021
This year is going to see a series of Assembly polls, the most crucial being the ones in West Bengal, Tamil Nadu, Kerala and Assam. Barring Assam and Kerala, the Congress really has little role except that of a supporting partner, leaving the Trinamool Congress and the DMK to take on the BJP juggernaut.
The most interesting and high-voltage battle of course is going to be West Bengal, the groundwork for which began much earlier with Mamata Banerjee taking on the BJP at every step. Given the way Amit Shah operates, he had begun working for these Assembly elections the very minute the last round of polls got over. Bengal has been very much on both his itinerary and radar ever since. In fact, after the Northeast, J&K and Uttar Pradesh, this is going to be the BJP’s next turn-around project. After this the focus will shift south. Work has already begun in Telangana and Tamil Nadu will be next.
It is this kind of grassroots planning and strategy that the Congress lacks. Given that the Congress is much more of a pan-India party than the BJP even today, it would have a much easier task, building on its cadre and strength. But of course, first it has to build on its leadership.
As things stand today, the fight in West Bengal is definitely between the TMC and the BJP, with the Congress-Left alliance reduced to the role of spoilers. The reason why Mamata will not go in for an alliance with them is that she does not want to unite the anti-TMC vote. That, and the fact that the genesis of her politics has been stridently anti-Left and also that she sees no future in doing business with a Rahul Gandhi-led Congress.
Assam is the one state where the Congress can lead the fight against the BJP. The CAA backlash would help its cause but Tarun Gogoi’s recent demise has left it bereft of a charismatic leader. Especially when the other side has Himanta Biswa Sarma leading the charge. However, this is the only poll-going state where it can play a meaningful role but so far there seems to be little move in that direction.
Will the Covid-19 pandemic, the long lockdown and the economy have a role in any of the coming state elections? We saw some change in the rhetoric in Bihar when jobs and unemployment took precedence over all other talk. Will the same be repeated in the next set of state elections? One is not sure, as it is early days yet. But looking at the highly polarised campaign being run in West Bengal, one is doubtful.
The year will begin with a focus on vaccines and the economy (with the Budget session round the corner) but mid-course, once the state polls begin, it’s going to be back to the politics of old.
Non-compete clauses: Can they protect businesses and employees?
Non-compete clauses are designed specifically to safeguard businesses against unfair competition and the losses it can cause. However, given how they can effectively prevent the flow of employees and knowledge, and consequently, economic growth, it is imperative to find a fine balance between protecting the interests of both employers and employees.
Non-compete clauses are designed to prohibit employees from accepting employment or at least performing services for competitors. This may be for a specified duration and/or in a defined geographic region. Non-compete clauses can also be part of a sale or business transaction, intending to forestall the seller of a business from competing with the purchaser for a period of time, typically after the closing of the sale. Non-compete provisions can be used to protect trade secrets, intellectual property, proprietary information and even business goodwill.
The first known legal case in old English contract law dealing with restrictions on the practice of a craft is the Dyer’s Case (Dyer’s case (1414) 2 Hen. V, fol. 5, pl. 26) where a dyer defaulted on his obligation to not compete with the man to whom he sold his business. The court invalidated the agreement on the grounds that the master had promised nothing in return. In this 15th century case, the court’s primary concern was protecting the apprentice’s right to earn a living.
However, the situation was almost reversed in a case involving two London bakers which set a new standard in 1711. Here, a baker Reynolds opened a bakery within a specific distance from the bakery he had leased to one Mitchel. This was held by the courts to be in violation of the terms of their non-compete agreement as the court felt that Reynolds had received the financial benefit of rent, and the restrictions were limited and specific, and there was no injury to the public. This case went on to establish a basic principle of reasonableness for non-compete agreements, which is still applied today.
JUSTIFICATION: UNFAIR COMPETITION, BUSINESS SECRETS
Reasonable safeguards should be in place to protect businesses, business owners, and their employees from losses that result from unfair competition. There is a thin line that separates fair competition from unfair competition which is when a former employee absconds with trade secrets, client lists, key employees, or confidential information. Therefore, in order to mitigate those losses, restrictive covenants such as non-compete, non-disclosure, and non-solicit agreements have been used.
In an endeavour to prevent unfair competition, non-compete agreements/clause have traditionally been used to inoculate legitimate business interests such as:
1. Trade secrets or confidential information;
2. Purchase of a business owned by the employee;
3. Habitué relationships;
4. Investment in the employee’s reputation in the market.
As global economies have evolved, so has employers’ determination for using non-compete agreements. Apart from preventing unfair competition, non-compete agreements are now used to:
1. Reduce the costs of employee turnover,
2. Increase the cost of competition,
3. Control free markets, and
4. Depress wage growth.
Non-Compete versus Non-Disclosure Agreements versus Non-Solicitation
Non-solicitation agreements restrict an employee from soliciting the employees or customers of a business, while a non-disclosure agreement between an employer and an employee prohibits the employee from disclosing any of the employer’s proprietary information, business processes, intellectual property, or knowledge assets. These are different from a non-compete agreement in which one party agrees not to compete against the other party, especially in an employer-employee context, where the employee is the recipient of the prohibition on competition. All the three above are usually separate contracts or clauses in a large contract. The only similarity between them is that they are attempts by a business to protect its competitive edge.
ENFORCEABILITY AND JURISDICTIONS
The increasing and widespread use of non-competes has sparked controversy over these agreements. The enforceability of these agreements are being reconsidered by several states. The Hon’ble Supreme Court of India in catena of judgements has consistently taken the view that: (1) negative covenants can only be enforceable to the extent that they are reasonable; and (2) the purpose of the covenant is to protect the legitimate business interests of the buyer. Even in the aforementioned circumstances, the restraint cannot be greater than necessary to protect the interest concerned. The approach adopted by Indian courts with respect to employees is that such restrictions during the period of employment are valid and considered legitimate for the protection of the business interests of the company and hence, do not violate section 27. It is merely a tool towards the fulfilment of the employment contract and not a restraint of trade because it only requires the employee to serve the employer exclusively.
SECTION 27 OF THE INDIAN CONTRACT ACT, 1872 AND SAVING
As stipulated in section 27 of the Indian Contract Act, 1872, an agreement by which anyone is restrained from exercising a lawful profession or trade or business of any kind is to that extent void, unless they fall within the narrow exception carved out by the statute. The underlying principle behind this provision is that an individual is entitled to exercise its lawful trade or calling as and when it wills, and that the law guards against interference with trade, even if it means interfering with the freedom of contract.
The observations of Sir Richard Couch, C.J., in Madhub Chunder v. Rajcoomar Doss, supra, which have become the locus classicus are: “The words ‹restraint from exercising a lawful profession, trade or business› do not mean an absolute restriction, and are intended to apply to a partial restriction, a restriction limited to some particular place, otherwise the first exception would have been unnecessary.» Moreover, «in the following Section i.e., Section 28 of Indian Contract Act, the legislative authority when it intends to speak of absolute restraint and not a partial one, has introduced the word ‹absolutely›… The use of this word in Section 28 supports the view that in Section 27 it was intended to prevent not merely a total restraint from carrying on trade or business but a partial one. While an employer is not entitled to protect himself against competition per se on the part of an employee after the employment has ceased, he is entitled to protection of his proprietary interest viz. his trade secrets, if any, and a business connection.”
PROS AND CONS
On one hand, the use of non-compete can seriously undermine employee freedom to move and pursue economic benefits and wage growth. In the era of a knowledge economy, they also argue, high employee mobility is conducive to innovations, but non-compete agreements that block the free flow of employees and knowledge will end up stifling creativity and, eventually, economic growth.
On the other hand, the use of non-compete is necessary to keep legitimate business interests like confidential information or trade secrets. One of the major positives or necessities for non-compete is that it allows businesses/employers to invest in R&D with more guarantee. Without them, they cannot prevent their employees involved in new projects from leaving the firm and joining competitors.
Non-competes are designed specifically to protect against unfair competition, and these contracts safeguard a company’s trade secrets, can help reduce employee turnover and can incentivize an employer to provide costly training. On the other hand, these agreements can reduce a worker’s bargaining power, and may cause a worker to leave a field entirely, taking their expertise with them, effectively preventing top talent from using their skills and experience.
One serious challenge with non-competition, non-disclosure and non-solicitation agreements is their actual enforcement. Once the trade secret has been disclosed, or an employee has been solicited to leave, or a former employee’s competition has harmed a business, the legal process to recover damages is lengthy and uncertain.
In the US, different states have different approaches toward enforcement of non-competes and cognate arrangements. The burgeoning of IT and media companies has seen frequent and rather unwarrantable use of these covenants in recent times. It is, however, imperative to find a fine balance between the promotion of trade of the employer while ensuring that the rights of employees are protected. Courts in India have been shy of strictly enforcing non-compete restrictions in favour of employers, and have rather been ensuring that principles of justice, morality and fairness are duly applied, as per the facts and circumstances of the instant case under consideration.
Brijesh Singh is an author and IG Maharashtra. Khushbu Jain is an advocate practising before the Supreme Court and a founding partner of law firm Ark Legal. The views expressed are personal.
DISCUSS, DON’T DISRUPT: STREET PROTESTS OVER FARM LAWS MUST END
It’s almost two months that protesting farmers, primarily from Punjab, have stationed themselves along Delhi’s borders, seeking the repeal of the three farm laws—nearly 60 days, during which they have inconvenienced the residents of Delhi-NCR, apart from causing immense financial losses to businesses. The farmers have taken an absolutist position, where they are not ready to discuss anything short of a repeal of the laws. They are not interested in any clause-by-clause discussion, which the government has offered to do, right from the beginning. Instead, all that they seem to be keen on is that the Centre must bend its knees in front of them and roll back these laws—in other words, the Government of India should not only eat humble pie, but be seen to be eating humble pie and that too over laws that have found support among most farmers in the rest of the country. It is obvious that the aim is to turn the Narendra Modi government into a lame duck, where it cannot bring in any reforms for fear of street agitation. Hence, in spite of claims of being apolitical, the whole premise of this agitation is political and the possibility of political players working behind the scenes to fuel it cannot be ruled out, whatever be the public posturing of the farmer leaders.
Of course this whole escalation could have been avoided when the protests started two months ago if the government had been proactive and not allowed them to assemble. It would have been easier to remove a few hundred protesters then, instead of now when thousands have been mobilized. Why is it that the government did not learn any lessons from the Shaheen Bagh protest, which too was allowed to grow before it could no longer be managed? The Delhi riots of February 2020 were a direct fallout of it, and but for the outbreak of coronavirus the protesters could not have been removed.
While peaceful protests are a democratic right of every citizen of this country, no protester, even if one’s cause is justified, can inconvenience fellow citizens or bring normal life to a halt while holding such protests. And this when one side is more than willing to discuss the problems that the protesters have. This “annadata” narrative, while talking about the farmers, has been taken too far. Just because farmers are growers of crops, and providers of food, does not mean they are above the law. Also, why will an elected government repeal laws that have been passed by Parliament? In this context, without going into the Supreme Court’s jurisdiction about suspending the farm laws, a valid question that has been raised is, from now on will groups of people be allowed to decide what an elected government of a democracy should do? Status quo, which keeps 85% of the country’s farmers poor cannot be acceptable. Change is a must. Laws evolve. The farm laws too will evolve and loopholes will be discovered and repaired, but reform cannot be stalled for that. It is obvious that a campaign of misinformation and disinformation has been launched by vested interests to mislead the protesting farmers about the farm laws. This must be countered.
Also, isn’t it time that the country got to know about the funding of these protests—both Shaheen Bagh and the farmers’ protests? Where is the money coming from so that thousands of people can be mobilized every few days and a lavish amount can be spent to keep them hale and hearty—and sometimes even in luxury—in the bone-chilling cold of Delhi? The other aspect is the Khalistani angle. Since the Attorney General has told the Supreme Court that Khalistani elements have infiltrated the protests, it is hoped that NIA’s investigation into the matter will shed some light on it.
The farmer leaders are now adamant about holding their tractor rally in the national capital on Republic Day, in spite of knowing that Delhi is a high security zone on 26 January. Do they realise that their rally can be hijacked by the elements who have infiltrated the protests, to stoke violence, which will thus grab eyeballs internationally? In fact, right from the start, the focus of these elements has been to internationalise a purely domestic matter, give it a colour of human rights violation and ensure censure of the Indian government. Republic Day is a matter of pride for all Indians; it is sacrosanct. The farmer leaders should desist from taking out their tractor rally on that day. Nothing should be done that can be taken advantage of by elements that are inimical to India’s interests.
One way out of this deadlock could be to give the states the choice of implementing these laws. Considering a majority of states are now ruled by the Bharatiya Janata Party, the laws will come into effect in vast swathes of the country anyway. If they are found to be beneficial for the farmers, the push for these laws to be implemented in Punjab will come from the state’s farmers themselves. The bottom line is, street protests cannot go on when the option for discussion is available. And the farmers themselves need to object to attempts being made by some people to disrupt Republic Day. It is their Republic Day too.
The farmers have taken an absolutist position, where they are not ready to discuss anything short of a repeal of the laws. They are not interested in any clause-by-clause discussion, which the government has offered to do, right from the beginning.
Bruised Congress stung by PM Modi’s Covid jab
The Congress’ criticism of the indigenous Covid-19 vaccines on the grounds that they have been rushed and not taken by government leaders first shows that the party will oppose any good decision for opposition’s sake.
If the first month of 2020 had brought sad news about Covid-19, the beginning of 2021 has begun with enthusiasm and the hope that things would be normal soon. The economy that slid down due to the complete shutdown has started showing signs of recovery and the country is looking forward positively.
However, losing the intellectual debate as always, the Congress has once again been caught on the wrong foot. The first time was when it tried to undermine the credibility of the two indigenous Covid-19 vaccines, Covishield and Covaxin, and then again when it challenged the Prime Minister and other leaders in the government to get the first jab.
What was the Opposition opposing? Is this their anger against the fact that the Prime Minister has been hailed the world over for his dealing with the pandemic, when they had expected that to become his nemesis? Their calculation that people would revolt due to the massive spread of the pandemic did not fructify. People of the country have been appreciative of Modi’s efforts to bring the country back on the rails. Are they then angry because the economy has also started looking up? They had calculated that the economy would not recover so easily and the disruption caused to many due to factors like the loss of employment would make people angry with the Prime Minister. Now, the economy is expected to pick up pace and grow about 10 percent in 2021-22.
Whatever they picked up against Prime Minister Narendra Modi, they were forced to retract because their arguments were based on insinuations and falsehood. Whether it was asking for proof of the two surgical strikes against Pakistan or questioning the PM on the Rafale deal or on handling the Covid crisis, people have refused to trust the Opposition. The facts have nailed their lies.
This palpable anger built on these failures has blinded reason and egged them to ask questions on the credibility of the two vaccines which have come as a lifesaving elixir. While Samajwadi Party leader Akhilesh Yadav has called it the ‘BJP vaccine’, senior leaders from the Congress have questioned the authenticity of the vaccines, forgetting the massive effort that scientists have made to produce them in record time. For them, opposing Modi and opposing the vaccine are the same.
It is true that Modi took extra pain in keeping himself briefed about the progress of the vaccine and encouraging scientists to expedite the process of making them. As a Prime Minister who is keen to bring life back to normal, he will surely be concerned. But the credit should not be taken away from the scientists who worked day and night to make this possible.
What should have been a moment of pride for every Indian, for bringing one of the cheapest vaccines in the world, got mired in controversy. The news that the vaccine would come early was known to everyone. At a meeting with leaders of political parties on 4 December, 2020, the Prime Minister had said that the Covid vaccine might be ready in a few weeks. He had informed them that India’s vaccination programme against Covid-19 would begin as soon as scientists give the go ahead.
In anticipation of the vaccines, the Union Government had also started preparing a vaccine protocol. “Priority in this (vaccination) will be given to the healthcare workers involved in treating Covid-19 patients, frontline workers and old people suffering from serious conditions,” Modi had said at the meeting. While the Opposition may have been preparing the ground to attack the vaccine, projecting the process as ‘vaccine nationalism’, the government had prepared a fool-proof vaccination protocol to avoid rush and disruption.
Matters that are not political are best left to scientists and experts. And no government would risk the health of its people by giving them a vaccine, unless it is considered completely safe. Instead of celebrating and being proud that India has established itself as a destination for vaccine manufacturers of the world, their criticism has undermined the values India is known for—scientific achievement and credibility.
Now, they have come up with a new complaint: why did the Prime Minister and other leaders in the government not take the first jab? When lifesaving amrit is found, who should get it first is always an issue. The Modi government said that it should go first to those involved in saving lives. Their priorities are clear. The Prime Minister even warned politicians against jumping the queues. In the second stage, it would go to people over 50 years of age with comorbidities. But the Congress is questioning the efficacy of the vaccine since top politicians have not taken it first. This is cheap politics and people see through it. The criticism comes in the context of a feudal mindset where vested interests and political workers are capable of subverting the system. The Prime Minister’s appeal has ensured that people follow a system. The message of the PM was clear: you will get it when your turn comes. The rules apply to all, including people at the top.
The nation is proud not to see politicians jumping the queue. A transparent system is in place. Imagine what frontline workers would have thought if they had not been prioritised. They are the ones who were the most exposed to the virus, with many of them even losing their lives while trying to save people. This shows why PM Modi is different from the rest and why the common people respect him.
The writer is convener of the Media Relations Department of the BJP and represents the party as a spokesperson on TV debates. He has authored the most authentic book on the Prime Minister, called ‘Narendra Modi: The Game Changer’. The views expressed are personal.
Why did the Prime Minister and other leaders in the government not take the first jab? When lifesaving ‘amrit’ is found, who should get it first is always an issue. The Modi government said that it should go first to those involved in saving lives. Their priorities are clear. Prime Minister Narendra Modi even warned politicians against jumping the queues.
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