Non-Solicitation & Confidentiality Clauses
A non-solicitation clause stops a departing employee from approaching the employer’s clients or staff; a confidentiality clause stops them using or disclosing its information; a non-compete clause stops them working for a competitor. In India the first two can be enforced if they are reasonable. A non-compete that applies after employment ends is void.
The reason is section 27 of the Indian Contract Act, 1872, which makes every agreement that restrains a person from a lawful profession, trade or business void to that extent. Its only statutory exception is the sale of the goodwill of a business. Indian courts do not apply a test of reasonableness to post-employment non-competes as courts in some other countries do.
When you need it
When drafting employment contracts
Clauses written for another country’s law, with a one-year non-compete, give an Indian employer little real protection.
When a senior employee is leaving
What the employer can and cannot hold the employee to should be checked before anything is said or written.
When a competitor is hiring your team
Non-solicitation and confidentiality terms are the practical tools, and need evidence to enforce.
When hiring from a competitor
The new employer should know what the person has signed, and make clear that it does not want another company’s information.
When buying a business
A restriction on the seller is treated differently from one on an employee, and can be enforced within limits.
How the process works
Four stages. Timings are typical, not promised.
- 1
Identify what needs protecting
A call or meetingName the real interests: client relationships, a trained team, pricing, source code, know-how. A clause aimed at a defined interest is easier to enforce than a general ban.
Documents
- Current employment and consultancy agreements
- The roles concerned
- 2
Review the existing clauses
A few working daysCheck what the current contracts say and which parts would survive a challenge under section 27.
- 3
Draft clauses that can be enforced
Commonly within a weekRely on a clear definition of confidential information, a time-limited restriction on soliciting named classes of clients and employees, restrictions that apply during employment, notice periods and paid garden leave.
- 4
Support the clauses in practice
OngoingLimit access to sensitive information, mark it, run an exit process that recovers devices and data, and remind leavers in writing of their continuing obligations. Courts look for this when asked for an injunction.
Common questions
During employment, yes: the Supreme Court upheld such a restriction in Niranjan Shankar Golikari v. Century Spinning (1967). After employment ends, no: a clause that bars the person from working for a competitor is void under section 27, however short or narrow.
Often, yes. Courts treat a restriction on actively approaching the employer’s clients or employees differently from a ban on working, and have enforced clauses that are limited in time and scope. A client who chooses to follow the employee is not solicitation.
Yes. Protecting confidential information is not a restraint of trade. The employer has to show that the information is confidential in fact, and not simply the employee’s own general skill and experience.
A period, usually the notice period, during which the employee remains employed and paid but is asked to stay away from work and from clients. Because the person is still an employee, the restriction is on firmer ground than one after exit.
Not by itself. Section 27 does not make an exception for a restraint that is paid for. Payment during a notice or garden leave period is different, because employment continues.
On the sale of the goodwill of a business, the seller can agree not to carry on a similar business within reasonable local limits. Restrictions between partners, and during the term of a commercial agreement, are also treated more favourably.
Apply for an injunction to stop the solicitation or the use of information, and claim damages. The employer needs evidence, such as emails to clients or files copied before leaving, and has to act quickly.
Related
To discuss restrictive covenants, write to info@ireniclegal.com or call +91 96547 47331. Written by Adv. Kanika Marwaha Bindal; last updated 7 October 2026.