Can an employer blacklist and threaten an employee who leaves the job before completing the notice period? Know what the law says

In some companies, the notice period can be very lengthy, making it difficult for employees to leave and join a new company, unless either they or their new employer is ready to cover the notice period buyout.

From the company’s perspective, they usually require employees to serve the notice period for various reasons, such as ensuring business continuity, transitioning responsibilities, handing over work, safeguarding client relationships, and retrieving company property or confidential information. Additionally, some employers choose to hold back on issuing relieving letters or experience certificates unless handover of company assets or data is fully completed.

That said, insisting that employees work through a long notice period isn’t really justified from a commercial standpoint or contractually relevant, as the law says that no employee can be compelled to continue working.


Sonakshi Das, Partner at JSA Advocates & Solicitors, pointed out to ET Wealth Online that if an employee exits early without waiver or buyout, an employer’s legal remedy would ordinarily be to enforce contractual consequences, including recovery of notice pay or damages, rather than specific performance of the employment contract.

Can an employer blacklist and threaten an employee who leaves before completing the notice period?

An employer may issue a legal notice or pursue contractual remedies where an employee exits in breach of the notice-period clause.

However, Das says that using threats to coerce continued service or formal “blacklisting”, in the sense of circulating an employee’s name to other companies or industry bodies to sabotage future employment, does not necessarily have statutory backing in India.

According to Das, if there is such a company which follows this blacklist policy, then it may expose them to claims of defamation or tortious interference with the employee’s livelihood.

Das says: “However, internal “do-not-rehire” flags are common practice and legally defensible.”

Also read: Notice period buyout: Can your employer say no? Know what employees can do under new labour code

What if an employer gives bad feedback during a background check?

Companies often register absconding employees on private verification databases or industry-specific talent registries.

Das says that while an employer cannot legally prevent another company from hiring an employee, they can provide legitimate negative background verification feedback stating the employee “deserted the company without completing exit formalities”.

Das says: “This acts as an informal deterrent. Any employer action should therefore be proportionate, contractually supported, and limited to lawful remedies.”

Can an employer force an employee to work if he has already resigned but does not wish to serve notice period?

Article 23 of the Constitution of India prohibits forced labour or coercing individuals to work against their will, and Indian contract law does not permit specific performance of a personal service obligation, meaning one cannot be ordered to show up and work.

Also read: Can your employer stop you from joining a rival firm? Know the law on non-compete clauses

Das says that an employer’s actual remedy would ordinarily be contractual and financial, and not physical. That means the company can adjust dues, decline to issue a relieving letter for not completing exit or handover formalities, and pursue recovery of the shortfall as damages under the Indian Contract Act, 1872.

Das says: “But “forcing” someone to work is not a legal remedy available to employers in India.”

Can an employer obtain a court order preventing an employee from joining a competitor before completing the notice period?

Das says that the Specific Relief Act, 1963, bars specific enforcement of personal service contracts and an injunction or court order restraining someone from working elsewhere is, in substance, an indirect way of forcing them to stay in the old job.

Additionally, Das says that even where the contract has a negative covenant, courts enforce a negative stipulation only if it is reasonable and does not push the employee into unemployment or idleness.

According to Das, courts generally do not compel an employee to continue working against their will. However, if an employee resigns and tries to join a competitor while their notice period is still running, courts may grant an injunction restraining them from working elsewhere until the notice period is served.

But such an order depends on reasonability of demonstrable concerns surrounding breach of confidentiality and protection of business secrets.

Das says: “However, an employee being prevented from joining a competitor once the period of contract has concluded—even when the employee has not served the notice period would be in violation of Section 27 of the Indian Contract Act, 1872, as it would constitute restraint of trade.”

So, while an employer can send a legal notice or claim damages, obtaining an actual court order preventing an employee from joining a competitor is a very high bar and rarely succeeds in ordinary notice-period disputes.