Is it Legal to Mention a Non-Compete Clause in an Employment Contract?

Yes, it is legal to mention a non-compete clause in an employment contract in India.

Employers use it to stop employees from joining competitors or starting a similar business. However, as per Section 27 of the Indian Contract Act, 1872, any agreement that restrains trade is generally void.

Indian courts, including in Niranjan Shankar Golikari v. Century Spinning (1967) and Percept D'Mark v. Zaheer Khan (2006), have held that non-compete clauses are valid only during employment, not after it ends.

Post-employment restrictions are mostly unenforceable as they can violate an employee's right to earn a living.