What Is a Non-Compete Agreement?

A non-compete agreement is a legal agreement or language in a contract that states that when an employee’s job time has ended, he or she shall not compete with the employer. During or after employment, the employee is also prohibited from disclosing private information or secrets to any other party.
Many contracts provide that once an employee’s employment ends, they are prohibited from working for a rival for a specific period of time. Non-compete agreements may be required by employers in order for employees to maintain their jobs. Employees, contractors, and consultants may be compelled to sign these agreements.
The legitimacy and enforceability of a non-compete agreement varies by jurisdiction, and the former employer may be required to pay the ex-employee a basic wage throughout the non-compete term.

Non Compete Clause, if a part of the terms and conditions of the appointment, is applicable in India as well. Whenever the Employer is investing on training of an employee for better output / exclusive nature of job/ compititive edge in terms of technical know how, the non compete clause comes in to picture and in order to safe guard itself (Employer’ interest).

Earlier (about a decade or two) Non Compete Clause was rather vague but nowadays it is more specific and employers do take umbrage against such employees who flout Non compete clause and claim damages.