The article elaborates on a recent ruling by the High Court of Delhi, which reaffirms that non-compete clauses in employment contracts are unenforceable under Indian law. The court held that any contractual term restraining an employee from lawful employment post-termination is void, emphasizing that employees have a fundamental right to seek better employment opportunities. While confidentiality and trade secrets deserve protection, overarching restrictions on employees’ future employment are impermissible. The judgment serves as a reminder to employers to carefully draft post-termination restrictions, focusing on safeguarding confidential information rather than relying on broadly drafted non-compete clauses.
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Preetha is a labour and employment law expert, having close to ten years of experience. She has over the past decade, worked on a wide range of complex and intricate labour law matters.