EMPLOYMENT BONDS VS. NON-COMPETES: KEY TAKEAWAYS FROM THE VIJAYA BANK JUDGMENT

Published On: 29/05/2025

Practice Area: Employment Law

Authors:

The Hon’ble Supreme Court's ruling in Vijaya Bank & Anr. v. Prashant B. Narnaware provides clarity on employment bonds vs. post-termination non-compete clauses, establishing a crucial precedent that will be factored in how employers structure retention agreements across industries. In this article, INDUSLAW's Debjani Aich, Shivani Kapur Jeet and Riddhi Jain analyse this significant judgment that distinguishes employment bonds from unenforceable post-termination non-compete clauses, examining the legal framework under Section 27 of the Contract Act, 1872 and offering practical guidelines for employers to ensure enforceability while balancing business needs with employee rights.