Employment agreements in India have traditionally been perceived as non-negotiable, but courts are now increasingly placing an accent on fairness and proportion

The enforceability of employment bond clauses and restrictive covenants occupies a complex and evolving space within the country’s employment jurisprudence. At the heart of this legal complexity lies the challenge of balancing an employee’s personal rights – such as freedom of expression and professional mobility – with the employer’s legitimate business interests including business confidentiality, operational continuity, brand protection, risk mitigation and the recovery of training or recruitment costs.

While this balancing act may appear straightforward, judicial interpretations over time have shaped a nuanced and intricate legal framework. Courts have consistently sought to reconcile these competing interests, resulting in a jurisprudence that reflects both the dynamic nature of employment relationships and the broader socio-economic context in which they operate.

This article critically examines the jurisprudential evolution, highlighting the courts’ growing emphasis on proportionality and contractual fairness in the enforcement of employment bonds and restrictive covenants.

Recent cases

In a significant ruling in Vijaya Bank & Another v Prashant B Narnaware earlier this year, the Supreme Court upheld the validity of an employment bond, directing payment of liquidated damages for resignation within a...

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