Hi All,

I was working with a small IT company from past 2 years 3 months, I resigned to my employment, employer accepted my resignation and I have completed all exit formalities as per the Company policies.

While joining time employer ask to sing on NDA & Non-Compete agreement, I had singed on the same, I really not remember what is there in that agreement, because I don't have any copy of that.

My employer mentioned about NDA & Non-Compete Clause in my reliving letter stating that: "The terms and conditions listed in the Non-Disclosure, Non- Compete and Confidentiality documents signed by you when you joined Company will still be in-effect after your have been relieved and we suggest that you review, honor and conform to the conditions stipulated in those document(s)."

Please review the below query and advice the same.

1) NDA & Non-Compete is legally in India?

2) NDA & Non-Compete will still be in-effect after I have been relieved from employer

3) Is this reliving letter is valid to Submit to new employer?

4) Whether my new employer will accept this reliving letter?


From India, Hyderabad
Dear Rama,

Negative covenants such as non-compete, non-disclosure tied up with positive covenants of employment contract are enforceable only during the subsistence of the contract and not beyond their term unless they are unconscionable or wholly one-sided.

Yet, such contracts are made by some employers as a measure of restraint or deterrant to protect their proprietory interests when the particular employee is, by virtue of his position or nature of work in the organisation, privy to the various confidential and proprietory informations of the establishment.

Therefore, in the light of the judgment of the Apex Court in Gujarat Bottling Co. Ltd v. Coca Cola Co. [ 1995 -5- SCC - 545 ] and the judgments of various High Courts in this regard, such contracts would be void if (1) they are beyond the period of contract (2) restrict the employee's right to employment post termination of the contract by efflux of time and compel him idle (3) contain unconscionable or excessive or one-sided terms (4) unless they are in respect of a fixed-term contract employee that too during the remaining unserved period of the contract and (5) the contract of employment is terminated by the employer.

So, my opinion is that your Non-Disclosure and Non-Compete Agreements would not stand in the way of your alternative employment in future. Cultivate the practice of getting copies of such legal documents.

From India, Salem
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