GoKwik’s Golden Handcuffs: Non-Compete Clause Puts Vested ESOPs In Jeopardy

GoKwik, a digital commerce startup backed by prominent VC firms, has introduced a new non-compete clause to its employee stock option (ESOP) plan. This provision names nine competing businesses, such as Razorpay and Shiprocket, from which employees are barred from joining or associating with if they wish to retain their ESOP rights.

The clause allows GoKwik to revoke both unvested and vested-but-unexercised options if an employee is found to have breached the restriction. This provision affects even employees who have already completed the vesting period and have earned the right to buy shares. The restriction applies to all grants, both past and future, and binds former employees holding vested options even after their employment ends.

The restriction remains in force for two years after an employee's last date of employment, during which joining or associating with a competing business could put their outstanding ESOPs at risk. Despite concerns from employees, GoKwik has not responded to inquiries regarding the policy changes.