Enforceability Of Post-Employment Obligations In India

Why a carefully drafted Separation Agreement protects an employer better than the appointment letter or NDA signed at joining

Almost every employer in India has a template appointment letter with a confidentiality and non-compete clause tucked into it. Almost every employer also discovers, usually on the day a senior employee resigns and joins a competitor, that the clause does not do quite what the HR team believed it would. The question we are asked most often by clients is a simple one: “Can we stop him?” The honest answer is that it depends on what exactly we are trying to stop, and on how the obligation was documented.

This article explains how Indian courts view post-employment obligations, why a Separation Agreement (also called an exit agreement or settlement agreement) generally stands on firmer ground than the papers signed at the time of joining, and how each key clause should be drafted so that it has a real chance of being enforced.