Navigating statutory voidance of post-termination covenants, trade secret injunctions, and employee non-solicitation clauses in Pakistan.
Section 27 of the Contract Act 1872 explicitly provides that every agreement by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is, to that extent, void. Pakistani superior courts (including landmark Supreme Court rulings) have consistently held that post-employment non-compete clauses cannot be enforced to prevent an executive from earning a livelihood, regardless of geography or duration specified.
While non-compete covenants fail under Section 27, non-disclosure agreements (NDAs) protecting confidential trade secrets, client pricing data, and proprietary algorithms remain fully enforceable. Similarly, narrowly drafted non-solicitation covenants preventing departing executives from poaching key team members or active clients for a reasonable period (typically 12 months) are legally viable.
Employers seeking to enforce confidentiality must act promptly under Order 39 Rules 1 and 2 of the Code of Civil Procedure 1908 to secure temporary restraining orders upon establishing a prima facie case of actual or threatened trade secret misappropriation.
Engage The Recruiters Lounge to structure compliant C-suite compensation packages, executive severance covenants, and statutory benefit trusts.
Schedule Executive Advisory Session