A Bengaluru court has ruled that employers cannot prevent former employees from joining rival companies merely by invoking confidentiality agreements, in a judgment that has significant implications for how Indian companies draft and enforce post-employment restrictions.
Additional City Civil and Sessions Judge JV Kulkarni made the observation on 6 October 2026 while dismissing a suit filed by EOX Vantage Private Limited against its former employee, Shruthi BS, who had been accused of leaking confidential information, poaching employees and soliciting clients.
“Therefore, an employer ordinarily cannot prevent a former employee from joining a competitor or using their general skills, experience and knowledge merely by calling the restrictive confidential clause,” the Court said in its order.
The court clarified that restrictions preventing a person from carrying on a lawful profession, trade or business would be void under Section 27 of the Indian Contract Act. EOX Vantage, a company providing back-office and knowledge process outsourcing services, had approached the court seeking a permanent injunction to restrain the former employee and had claimed losses of over ₹20 lakh, backed by a criminal complaint.
The court flagged inconsistencies in the company’s conduct, including the fact that it had issued a relieving letter despite ongoing allegations. It also noted that key witnesses, including the company’s CEO and COO, did not depose during the proceedings. The court concluded that the suit was speculative, damages were not proven, and dismissed the case with costs.
The ruling reinforces a settled position in Indian jurisprudence that confidentiality clauses can safeguard genuine trade secrets but cannot be used as de facto non-compete agreements against departing employees. For HR teams, the judgment underlines the need to separate protection of proprietary information from restraints on employee mobility when drafting employment contracts.
