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Human Resources » Industrial Law & Discipline

Chrm Message From: sanjay04 Total Posts: 57 Join Date: 23/08/2006
Rank: Manager Post Date: 26/09/2007 00:16:57 Points: 285 Location: United States

Hi All ,

I have a situation on which I would like your advise.

Company A hires an engineer who is given intensive training in the first month of his job. In a month from then he gets an offer from an MNC and quits as he is getting a better salary there. He says he has personal problems and leaves.

Company A finds out that he has joined the competition in 4 days. According to his contract of employment he is not supposed to join a competitor for 2 years after he resigns from Company A.

What legal action can Company A initiate to punish the employee and what preventive measures can be made to avoid such a situation again in the future. Anyways this is the third time this has happened ?

Await your advise.

Sanjay Mewar

Chrm Message From: mishrajg Total Posts: 4 Join Date: 23/08/2006  
Rank: Beginner Post Date: 21/10/2009 11:23:05 Points: 20 Location: United States

Negative Covenant in terms of employment are not enforceable at law in India. It is termed is violation of Constitutional Right. What is restricted by constitution cannot be enforced by Law.

Leave him alone, let him take care of his future.


Rajesh Mishra



Chrm Message From: harindra Total Posts: 11 Join Date: 23/08/2006  
Rank: Executive Post Date: 11/12/2009 16:03:00 Points: 55 Location: United States
Dear sanjay,

I do fully agree with  Mr Rajesh Mishra on the issue.  However, I suggest when you impart some important training and wants to take care of your company does not suffer any financial loss on such occasions, you can as well put a clause in the appointment that the new employee need to deposit certain amount which will be released to the employee after a period of 6 months or 1 year as you decide, with nominal bank rate of interest.


Harindra gk
Chrm Message From: sunilseth Total Posts: 7 Join Date: 23/08/2006  
Rank: Beginner Post Date: 11/05/2010 06:45:49 Points: 35 Location: United States

Dear Friend,

I agree with Mr Mishra, and I also think it is important to introspect on such situation if it has happen thrice, why what and how it can been avoided.

Not to jepordaise some one carrer, this can been taken up with the Company B and advise on the feedback of that employee. They may value your inputs as they to can become a victim of this.

Best regards



Chrm Message From: kprasoon Total Posts: 34 Join Date: 23/08/2006  
Rank: Executive Post Date: 12/05/2010 05:48:15 Points: 170 Location: United States

Dear Sanjay,

First i would like to know whether your employee (engineer) has signed any Non-Compete Agreement with your organization?

What were the contents (full text) of the Non-Compete Agreement signed between your organization & the employee.

If the Non-Compete Agreement is drafted properly it has a legal standing in the court of law. If the action of your employee has caused loss and damage to the Company, you have every right to take legal action.
This has nothing to do with the terms of constitutional rights and this will not be aviolation of constitutional rights. 

I agree that , any clause as imposed by an employer which is in violation of the articles under the constitution of india and which against the principals of natural justice is not tenable and cannot stand before the courts. But if the action of an employee has caused loss and damage to an organization, the employee is 100% accountable for that.


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