1) any agreement in restraint of trade is void under section 27 of indian contract act .

2)the Bombay High Court held that a restraint

operating after termination of the contract to secure freedom from competition from a person who no longer worked within the contract, was void. The court refused to enforce the negative covenant and held that, even if such a covenant

was valid under German law, it could not be enforced in India. (Taprogge

Gesellschaft MBH v. IAEC India Ltd., AIR 1988 Bom 157)

3) even if your current employer files suit it would not be granted any reliefs as under section 27 of indian contract any agreement in restraint of trade is vloid

you can join rival company

2) if your current employer files suit seeking stay restraining you from joining its competitor no such stay would be granted by court

Hello,

1) It is a non compete clause or contract that restricts you from switching over from one company to another that carries on business of the same character and is a competitor. It is meant to discourage poaching of talented professionals.

2) The above being said nobody can take away your right to work and earn a livelihood which is guaranteed by the Constitution of India. Therefore if you join another company within two years of designing from your current company, they cannot succeed in a law suit against you as the non compete clause is unenforceable.

3) It would be good to find out from the new company if they would bear the legal charges in case the current company decided to file a suit against you.

1. Agreements in absolute restrain of trade are void and legally unenforceable. However, a contract which places a limited restraint on the right of an employee to do an act, subsequent to his departure from the organization, can be successfully enforced through a lawsuit for injunction. If an employer at the time of recruitment or anytime thereafter executes a contract with his employee whereby and whereunder the latter is restrained from switching over to a client of the employer, the spirit and object of such a clause is to secure the sanctity of employer-employee relationship and preserve the credibility of the employer, hence it can be enforced through injunction and also damages for breach of contract. I have successfully represented some of my clients in such lawsuits against their employees. There is no blanket ban on the enforceability of such agreements.

2. Everything depends on the phraseology of what is written in the contract. So consult a lawyer with a copy of it, if you have, before you make the move.

that means that no contract can be made which restricts you to do any kind of contract or trade

1. It is necessary to examine what agreement you have signed with your earlier Company and what has been and how has been the no-competition clause mentioned therein. If you have entered in to an agreement that you shall not work for any of their clients/same projects either directly or indirectly (through some other Company) for a specific period, then you are legally bound to comply with the terms of the said agreement. The Company can certainly file a suit against you for breaching the contract and causing damage to them.

2. However, there is also an argument for such breach of no-competition clause/agreement stressing on the point that earning livelihood is one's basic constitutional right which can not be prevented by any such agreement/clause and any such agreement has been entered in to with the employee by the employer at the time of recruitment, then it will be treated as void at law.

1. It has been explained in my earlier post that earning your livelihood through any legal means is your constitutional right which can not be restrained by any Agreement.

2. If any agreement is entered in to which restrains one to work any where for his livelihood then the said agreement will be considered as void at law and unenforceable.

Your current employer may send a legal notice to you for breach of 'Non-Compete Agreement', if you signed any with them.

Whether or not the said agreement would be enforceable would depend on the terms and conditions of that agreement. No agreement could be in breach of public policy or in restrain of trade and profession. In any case, it would be tough for them to fight a case against you successfully.

Could you please clarify the legal matters in this regard:

1. I do not remember if I had signed any document that after I leave my current company, I cannot join another company that works for the same client/same project for atleast 2 years. In this Case, can my current company file a legal case against me?

If you have not signed non-competence clause after getting relieved from this company, then the present company cannot take any legal action whatsoever the reason may be.

Even if you have signed non-competence clause, the company cannot dprive your rights to work at your liberty until you are required to compensate for the training expenses if that is within the period stipulated.

2. In case I signed a document that I cannot work for net 2 years for same cleint/same project even if from other company, Can the company file a legal Case against me.

When we see the Indian legal scenario about the 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”

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.

Therefore the employer's legal action shall not be maintainable i law.

Could you please clarify the sentence, unfortunately I am not able to interpret the legal terms/words here:

'even if your current employer files suit it would not be granted any reliefs as under section 27 of indian contract any agreement in restraint of trade is vloid'.

Indian law is 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.

Although such Non compete clauses are valid in foreign countries, but in regard to the Sphere of the Indian judiciary, it does not find such wider and effective scenario like that in foreign countries. Article 21 of the Constitution of India guarantees the right to livelihood and since it is a fundamental right it is held to be inviolable. This makes the enforcing of non compete clauses in India even more difficult.