New Delhi, June 27
Delhi High Court Affirms Right to Job Mobility:
In a landmark judgment reinforcing employee rights, the Delhi High Court has ruled that employers cannot prevent former employees from accepting new job offers—even with clients or associates of their previous employer. The court declared that such post-employment restrictions, commonly found in many contracts, are unenforceable under Indian law.
Delivering the ruling on June 25, Justice Tejas Karia emphasized that the right to seek better employment opportunities is a fundamental aspect of a worker’s freedom. “An employee cannot be confronted with the situation where he has to either work for the previous employer or remain idle,” the court said, asserting that the freedom to change jobs for improved career prospects is a “vital and important right.”
The case involved software engineer Varun Tyagi, who transitioned from Daffodil Software to Digital India Corporation (DIC), a government-owned body overseeing the POSHAN Tracker project aimed at improving child nutrition. Daffodil, citing a clause in Tyagi’s contract, had barred him from joining any business associate for three years post-employment. A district court initially upheld this clause, restricting Tyagi from joining DIC. However, the High Court overturned this decision.
Justice Karia ruled that such post-employment non-compete clauses violate Section 27 of the Indian Contract Act, which nullifies any agreement that restrains a person from engaging in a lawful profession, trade, or business. The court added that these clauses are especially problematic when found in standard employment contracts, where the employee often has little choice but to accept all terms to secure a job.
In Tyagi’s case, the court highlighted that the POSHAN Tracker project was owned entirely by the government, not by Daffodil Software, and that Tyagi did not develop any proprietary or confidential software that would justify employment restrictions.
“Freedom of employment cannot be restricted merely because someone worked on a sensitive project, particularly when that project was not owned by the employer,” the judgment stated.
The court further clarified that Indian law does not support employment restrictions after termination, except in rare cases involving the sale of a business’s goodwill—a narrow exception under Section 27. Unlike English law, which sometimes allows such restraints if deemed reasonable, Indian jurisprudence treats them as void unless they protect genuine proprietary interests.
Justice Karia also dismissed the argument that these clauses help prevent the misuse of confidential information, stating that employers may pursue damages if necessary, but cannot block someone’s right to work.
This ruling marks a significant reaffirmation of worker mobility in India and is expected to have far-reaching implications for employment contracts across sectors.
