For decades, advertising has accepted a simple rhythm: senior talent leaves a large agency, launches a rival shop, and often takes a slice of the business with them. A recent legal dispute around marketing company ITW Catalyst and two former senior executives shows why that rhythm is now under sharper legal scrutiny.
The dispute
ITW Catalyst approached the Bengaluru Commercial Court, saying commercially sensitive information may have remained accessible or entered competing pitches after the two executives left. The court granted interim protection over the company’s confidential and commercially sensitive information.
At this stage, it did not grant the wider relief ITW had sought around solicitation, client approaches and participation in pitches. That distinction matters: a court can protect secrets without restricting a person’s right to work.
Where the line sits
Indian courts have long separated an employee’s experience from an employer’s confidential property. The Delhi High Court’s 2006 decision in American Express Bank v. Priya Puri examined how far a former employee can be restrained from dealing with clients she had worked with, while treating such relationships as different from genuinely confidential information. A 2009 ruling in Desiccant Rotors International v. Bappaditya Sarkar similarly held that knowledge and skills gained during employment do not automatically become trade secrets.
Suyash Srivastava, partner in the labour and employment department at DSK Legal, frames the distinction simply: “An employee does not leave their professional experience behind when they leave an organisation.” Pricing, unreleased pitch strategies, proprietary campaign data and internal plans, however, do not travel.
Manas Mishra, managing director at Mediant, says agencies often confuse relationships with institutional assets. “If business moves because personnel moved, the agency did not institutionalise the client relationship over time.” Relationships, he adds, cannot be copyrighted.
Why people are the real asset
Abhik Santara, founder of Atom Network, argues that creative agencies remain people-led despite their frameworks. “The biggest asset of a creative agency isn’t its process, proprietary tool, or PowerPoint framework. It’s the people, their knowledge, relationships, instincts and, most importantly, their hunger.”
Yet ITW’s position is that the firm, not any individual, holds the institutional knowledge. “ITW’s business is built on client relationships, campaign, and sponsorship intelligence, and the institutional knowledge that sits inside the firm, not with any one individual,” an ITW spokesperson says.
What agencies can do now
Sandeep Goyal, chairman of Rediffusion, believes advertising and media businesses have been too casual about contracts. “Advertising and media businesses have never really been meticulous with their employee contracts. It is about time we were.” He also points to client complicity, suggesting clients sometimes encourage moves out of old friendships or cost considerations.
The legal signal is not to stop mobility, but to define it better:
- Make employment contracts specific about confidential information and pitch data.
- Limit access to pricing, campaign plans and proprietary tools on a need-to-know basis.
- Run structured exit processes that revoke access and document what leaves.
- Where clients participate in poaching, consider naming the behaviour as a deterrent.
The agency business cannot stop people from leaving, but it can stop being vague about what belongs to the firm. Clearer contracts, access controls and exit discipline are the practical line between professional experience and confidential property.
Source: ETBrandEquity.com
