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Neha (Director)     09 July 2013

Employee breach of employment contract

In our employment contract, we have a clause wherin the employee cannot work with our competitor for a period of one year after employment with us. If any employee breaches this clause, what can I as an employer do?



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 3 Replies

Kumar Doab (FIN)     09 July 2013

Nothing.

Employee can not be restrained to join any other employer after separation and non compete clause amounts to restraint of lawful profession.

An agreement, which restrains anyone from carrying on a lawful profession, trade or business, is void to that extent. Under section 27 of the Indian Contract Act, 1872 agreements in restraint of trade are void.

 

 

Indian courts have consistently refused to enforce post-termination non-compete clauses in employment contracts, viewing them as "restraint of trade" impermissible under Section 27 of the Indian Contract Act, 1872, and as void and against public policy because of their potential to deprive an individual of his or her fundamental right to earn a livelihood.

Arpit lalan (Legal Consultancy/Advocate)     12 July 2013

To Neha,

                 Please refer the answer to Mr. Doab. This is apceleutely correct and consice answer to your question.

Aashish George (lawyer)     03 August 2013

i agree with kumar ji, i have read one such case, it was between coca cola vs pepsi and the facts were very similar.


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