Restraining employees not to join compititors – Not Valid

Such a stipulation, will be against public policy as interpreted under section 23 of the Indian Contract Act whereby such contracts are void and hence prohibited. Reference is made to one case wherein it had been held that an agreement with an employee not to undertake employment for a period of 12 months after leaving the job will be violative of the provisions of Contract Act. In this case M/s PEPSI FOODS LTD. sought an injunction against the employee in joining the compititors but the same was declined by the Delhi High Court.