Is non-compete legal in India?

Is non-compete legal in India?

A non-compete clause or agreement is a contract wherein an employee promises not to enter into competition of any kind with an employer after the employment period is over. Indian Contract Act, 1872 (“Act”) is the primary legislation in India that deals with agreements in restraint of trade and legality thereof.

What happens if you break non-compete agreement in India?

Competition law infringements If any non-compete clause goes against the Indian Competition Act, 2002, it will not be upheld in court and will be invalid. This Act provides for the rights and duties of companies while carrying out their businesses with healthy competition.

Can non-compete clauses be enforced?

Are non-compete clauses actually enforceable? A non-compete clause that covers a particular city and spans a period of three months, however, could be enforceable depending on the employer’s industry. Although non-compete clauses are seldom upheld in court, companies will protect their interests in other ways.

How long does non-compete last in India?

The secrecy agreement provided for a non-compete clause for a period of 3 years.

Can I join competitor company in India?

You can leave your employment and join a competition organization and there is no illegality in it. Even if there is a contract restricting you to join a competitor, then such contract becomes void.

What happens if I break a non-compete clause?

Generally, if you violate a valid and enforceable non-compete agreement, it is likely that your employer will file a lawsuit against you. In very rare cases, the court may prevent you from working for a competitor for the duration specified in the non-compete.

Is a non-compete clause enforceable if terminated?

In most cases, the court will rule in favor of the agreement if the employer can meet certain conditions. This is true regardless of the reason the employee left the company, and in many cases, the employer can enforce the non-compete agreement after termination.

Can I work for a competitor if I signed a non-compete India?

It means that if one person has signed a non-compete with his/her employer then he/she is prohibited from being involved with any other similar player in the market who is a potential competitor to the employer. This prohibition is usually during and post-termination of employment.

Can I ignore non-compete clause?

Simply ignoring a non-compete agreement is never recommended as a way out. Ignoring a valid non-compete agreement could be far more costly: Employers would have grounds to file a lawsuit, where you could be found liable for financial damage you caused the company plus attorney fees and court costs.