No Strings After Exit: Court Backs Employee’s Right to Switch Jobs

When an employee finishes their notice period, they should walk into their next opportunity freely. On 25.06.2025, the Hon’ble Delhi High Court in Varun Tyagi v. Daffodil Software Private Limited, FAO 167/2025 & CM APPL. 36613/2025 held that an employee cannot be compelled to choose between returning to their former employer or remaining unemployed, making it clear that such coercive restrictions are legally untenable.

Employment Isn’t a Trap You Can’t Leave 

Varun Tyagi had worked on the government’s POSHAN Tracker project while employed by Daffodil Software. After he resigned and joined Digital India Corporation, his old employer sued him, claiming he was violating a non-compete clause. The contract tried to block him from working with Daffodil’s clients for three years after leaving. The Court held this kind of restriction goes against Section 27 of the Indian Contract Act which protects a person’s right to pursue lawful work once employment ends.  

Contracts Can’t Override Common Sense 

The Court pointed out that employees often don’t get to negotiate contract terms. They either sign what’s given or risk losing the job offer. So when those contracts have blanket restrictions, they deserve strict scrutiny. In India, it does not matter whether a clause partially or fully restricts someone’s profession. If it limits your ability to work after your job ends, it is generally invalid. 

You Can’t Claim Ownership Over What Isn’t Yours 

Daffodil claimed Varun had access to confidential information about the POSHAN Tracker. The Court disagreed and held that the project’s intellectual property belonged to the government, not the company. Since Daffodil was only supplying manpower and not building proprietary technology, its claims about protecting sensitive data did not hold ground. 

You Can’t Hide Control Behind Confidentiality

To reinforce its decision, the Court cited the precedent set by it in American Express Bank Ltd. v. Ms. Priya Malik, MANU/DE/2106/2006 where it had been clearly held that an employer cannot use the excuse of confidentiality to restrain an employee’s freedom. The judgment in that case emphasized that the right to seek better employment is a vital part of an individual’s liberty and that any attempt to block this right under the guise of data protection is hit by Section 27 of the Contract Act. 

Contracts Must Respect Constitutionally Guaranteed Mobility 

The Court emphasized that employees have a constitutional right to freedom of profession and improvement of service conditions. These rights cannot be shut down by blanket restrictions in private employment agreements. The idea that one must either go back to their previous employer or be out of work is not just outdated but constitutionally unjust. 

Swift Judgement vs. Sound Judgement 

The Court carefully considered which party would face greater hardship. It found that Tyagi, having lawfully joined DIC after completing his notice period, would be unfairly penalized by being barred from working. The harm to his livelihood far outweighed any speculative loss to Daffodil. If the company eventually proved a breach, it could still seek compensation through damages. However, stripping an employee of the right to work wasn’t a justifiable remedy.