Non-Compete Clauses have been an integral and vital part of employment agreements in order to protect the intellectual property, reputation and goodwill of the organization in today’s highly competitive market. Recently, a Television News Channel (“News Channel”) filed a suit against its News Broadcaster, restraining her from taking up similar work with any other television channel until the expiry of the term of her Employment Agreement; from allowing her name, image or voice to be associated with any other news channel during such term; and for recovery of damages worth INR 2,00,10,000.

The News Channel claimed to have spent large sums of money and resources in grooming the Broadcaster and in building her image as one of the prominent faces of the News Channel since the last 14 years. However, the Court observed that the proprietary rights over the skill and excellence acquired by the Broadcaster over the years cannot be vested in the News Channel merely because it contributed or facilitated the same.

As per the Employment Agreement, only the News Channel had the right to terminate it. This right had not been provided to the Broadcaster except for medical reasons. The term of the Agreement was 3 years after which it was renewed for another 3 years and so on. However, before the expiry of such period, the Broadcaster communicated her intention to terminate the agreement. The News Channel learnt that the Broadcaster intended to join a competing news channel and hence filed this suit. A negative covenant in the contract between the parties, restrained the Broadcaster from joining / serving any other news channel till the last date of the term of the agreement with the News Channel. The News Channel invoked this provision to restrain the Broadcaster. However, the Court observed that since the Employment Agreement between the parties was terminated, the Broadcaster cannot be restricted from entering into another agreement. It stated that such a restriction would be viable only until the employment agreement is continuing. It held that if the interim restriction is granted, the Broadcaster would remain idle.

The News Channel also stated that it shall continue to pay the Broadcaster the emoluments as per the Agreement, if she agreed not to associate with any competing news channel. It further narrowed down the negative covenant by allowing her to engage in back stage activities other than of being the news presenter/face of the channel. The Court did not allow this stating that ‘benching a professional for as long as 10 to 11 months can be devastating, capable of inflicting permanent damage affecting mental and physical health and future prospects of a professional.’

The Court’s assessment of the balance of conveniences, before passing an interim order, is apparent in this case. It observed that not allowing the Broadcaster to work on screen would adversely affect her goodwill and presence in the market and such loss cannot be monetarily compensated if an interim injunction is passed against her. The Court observed that neither the element of irreparable injury, nor that of balance of convenience, (both of which are requisites of granting an interim relief) are in favour of the News Channel and hence dismissed the application for interim injunction.

The matter is listed in July 2019 for framing of issues, if any. Watch this space for updates!

Compiled by: Adv. Sachi Kapoor | Concept & Edited by: Dr. Mohan Dewan

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