Document background
The Non-Compete in Severance Agreement is utilized when an employment relationship is being terminated and the employer seeks to protect its business interests while providing separation benefits. This document is particularly crucial in the Indian business environment where post-employment restrictions must be carefully structured due to legal limitations. The agreement typically includes detailed severance terms, confidentiality obligations, and non-compete provisions, though the latter's enforceability is limited under Indian law. It's commonly used for employees with access to sensitive information, key client relationships, or specialized knowledge. The document must comply with Indian Contract Act provisions and relevant Supreme Court interpretations regarding restraint of trade, while also addressing tax implications of severance payments under Indian Income Tax law.
