1. A non-compete clause in an employment contract restricts employees from engaging in activities that could harm their employers’ business, such as working for a competitor or starting a competing venture. These restrictions apply during or after employment, intending to protect the employer’s legitimate interests, including trade secrets, confidential information, customer data, goodwill and market strategies. However, concerns have been raised that these clauses can hinder innovation and career growth, preventing employees from exploring new opportunities.
Legal and Practical Considerations
2. The enforceability of non-compete clauses, especially after employment, is subject to various factors that Indian courts consider, including :
(a) Reasonableness of the Restrictions
Restrictions must be reasonable in terms of duration, geographic scope and scope of activities prohibited. Courts are less likely to uphold overly broad restrictions, such as global or lifetime bans.
(b) Legitimate...
