A joins a company and signs a non-compete agreement. The terms of the agreement specify that A cannot join another company dealing with the same products during the term of the employment, which is for a fixed period of two years. A submits a resignation letter after one year, and the company relieves him. The company then approaches the court seeking a injunction against A, when he is offered a position in another company dealing with the same products. Can the company succeed in obtaining injunction?
Asked 4 years ago in Labour from Kolkata, West Bengal
Yes , you can seek injunction. Negative covenants operative during the period of employment when the employee is bound to serve his employer exclusively are not to be regarded as restraint of trade and therefore do not fall under s. 27 of the Contract Act. Refer Niranjan shankar v Century Spinning 1967 Air 1098 SC
Advocate, New Delhi