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Non-compete clause post termination


23-Feb-2023 (In Labour & Service Law)
Hello, I currently work at an Indian IT company (ABC) and have the following non-compete clause in my agreement. I agree that for a period of six (6) months following the termination of my employment with ABC for any reason, I will not: a. accept any offer of employment from any Customer, where I had worked in a professional capacity with that Customer in the twelve (12) months immediately preceding the termination of my employment with ABC. b. accept any offer of employment from a Named Competitor of ABC, if my employment with such Named Competitor would involve me having to work with a Customer with whom I had worked in the twelve (12) months immediately preceding the termination of my employment with ABC. Can you please advice on the following? a) is the non-compete clause applicable if I work for a customer through another party which is not a named competitor b) the legal validity of non-compete agreement in India post termination of contract Kind Regards,
Answers (1)

Answer #1
983 votes
Section 27 of the Indian Contract Act-1872 provides that ”Every agreement by which anyone is restrained from exercising a lawful profession or trade or business of any kind, is to that extent void”.

Exception : One who sells goodwill of a business with a buyer to refrain from carrying on a similar business within specified local limits so long as the buyer, or any person derivingtitle to the goodwill from him, carries on a like business therein provided that such limits appear to the court reasonable, regard being had to the nature of business.

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