On November 6, 2013, CCI passed an order stating that non-compete clauses in employment contracts do not raise any competition concerns.

According to the information filed by Larry Lee McCallister (‘Informant’) against Pangea3 Legal Database Systems Pvt. Ltd. (‘Pangea3’) and its senior employees, Pangea3 was abusing its dominant position by enforcing the non-compete clause in the employment contract. The noncompete clause stated that the Informant could not join any competitor of Pangea3 for a period of one year after the termination of the employment contract.

CCI held that even if it was assumed that Pangea3 was dominant in the market for providing legal outsourced solutions, employment contracts are distinct from this and, hence, the issue of dominance would not arise. CCI further held that the issue of a relevant service market would arise only when a service provider provided his service to one and all. Once a person enters into an employment contract, he cannot provide his service to one and all. Accordingly, CCI did not order any further investigation into the activities of Pangea3.

For further information, please contact:

Zia Mody, AZB & Partners
[email protected]

Abhijit Joshi, AZB & Partners 
[email protected]

Shuva Mandal, AZB & Partners 
[email protected]

Samir Gandhi, AZB & Partners
[email protected]

Percy Billimoria, AZB & Partners 
[email protected]

Aditya Bhat, AZB & Partners 
[email protected]