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Q. Non compete

Q.Non compete
My employer has a non compete clause in my employment agreement. Now I want to move forward in my career. Is there any legal complications.

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Shreyash Mohta

Experience: 1 Year(s)

Responded 2 weeks ago

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A. ) There is no legal complications as such.

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Kishan Dutt Kalaskar Retired Judge

Experience: 33 Year(s)

Responded 1 month ago

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A. ) Dear Sir,
Non compete clause, it is prohibited under the Law of Contracts.
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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.

Indian law is therefore very clear and strict on this point, any such non compete agreement shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, for such type of agreements it has shown that it has kept such non compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non compete clauses in employment contracts as “restraint of trade” is impermissible under section 27 of the Indian Contract Act-1872, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.

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Kishan Dutt Kalaskar Retired Judge

Experience: 33 Year(s)

Responded 1 month ago

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A. ) Dear Sir,
Non compete clause, it is prohibited under the Law of Contracts.
======================================================================================
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.

Indian law is therefore very clear and strict on this point, any such non compete agreement shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, for such type of agreements it has shown that it has kept such non compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non compete clauses in employment contracts as “restraint of trade” is impermissible under section 27 of the Indian Contract Act-1872, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.

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Abhimanyu Shandilya

Experience: 14 Year(s)

Responded 1 month ago

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A. ) Non-Compete clause is there to safeguard the business interest of the employer when an employee working for it leaves and joins the competitor. In India many companies do not bother so much about this clause unless you are a critical resource and you carry the trade secret with yourself. Secondly if your movement is not going to snatch away the business from them then would not like to invoke this clause.

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Rameshwar Dadhe

Experience: 2 Year(s)

Responded 1 month ago

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A. ) According to the agreement not fulfill then take legal action against them

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