Dear Group Members,

One of my friend works with an international consulting firm in Bangalore.

His appointment letter mentions that at the time of leaving, he will be required to sign a Non-Disclosure Agreement with the company, which will restrict him to disclose any information about company’s processes, product etc. to anyone for two years.

Now when he is leaving the company, his employer is forcing him to sign a Non-Competition Agreement stating that he cannot join any competitor of the company for two years.

His employer is also refusing to give him relieving letter without employee signing the same.

This clause was never the part of his condition of employment.

He was also never informed of this clause by his employer.

Is there any law/remedy available which restricts an employer to change the condition of employment at the time of employee leaving the company or putting in such clause at that time without informing it at the time of joining.

I would appreciate views of group members on the same.

Thanks & regards

Joy

Joy,

Ask him to ignore/refuse unreasonable & restrictive conditions imposed by his employer which defeat the objectives of mobility of labour in a free & fair market. Even if such a condition had been stipulated in the original appointment offer(not to take up employment with a Competitor company), it is an 'unfair & unreasonable' condition, somewhat analogus to a condition that says a worker 'should not join a trade union'. There is no specific law other than the general law of contracts & equity to seek legal redressal / remedy. In my personal opinion, this kind of contract in a very broad context " defeats or goes against public policy " & is therefore void in law. It could also be voidable as far as your friend's situation goes, i.e. he can even after signing such a contract opt out of it at a later date,while observing all other conditions forming part of the appointment offer including the non-disclosure agreement.

In fact the non-disclosure agreements are also seen under a microscopic lens by courts to check if there are 'justifiable & genuine grounds' in the clauses / conditions contained in it as also the 'category of employment / industry' to which it applies.

All that is stated above is based on the presumption that your friend is in the Executive Cadre where he does not enjoy protection under any Labour legislation. In the case of he being a non-executive employee, he can seek redressal under the Indl.

Disputes Act and/or Industrial Employment Standing Orders Act. Regarding non issue of relieving letter, I feel, he should post his resignation letter by registered post ack due, & inter alia mention in it the date on which he is effectively quitting the company as per the terms & conditions of his employment. He can show this along with his last salary slip as proof of service with this company, to any other company he proposes to join.

Over to the group for further debate.

Regards,

Jaspreet Gill

The company is using pressure tactics on your friend nothing else. Some companies do make employees sign non-competition agreements but still people do join the competition. This is basically to put psychological pressure on the individuals.

If your friend has already resigned then his resignation letter will have that date. If he signs the non-competition agreement now then he should put the current date on it & it will therefore be easier to prove that the latter was signed by him under duress.

Finally it will make for a civil case and companies generally want to save their energies for better things.

This is my personal take on it. If he wants he could take a lawyer's advise on it. Other members could also shed some light on it.

srini

All acts related to employmet india are favouring to employee only. There is no rule that the employee can stop the employee and his salary. All the BONDS and AGREEMENTS are illegal. Even though your friend sign on the contract that is void. You can tell that under forceble conditions my employer made me an agreement which is void as per act. So think there is no problem in your friends issue.

Hi team,

Once a person resigns the company the date on which the resignation is accepted is the last day of his association with the company. If he has to sign any agreement after that it has no sense as he is not signing it as an employee and the agreement is not a part of the Terms & Conditions of Appointment.

Also, he must be having a copy a Offer of Appointment/ Appointment Letter if the Clause is not mentioned there then he has the authority to not sign the Papers now!!

Nothing to worry.......
It is positive sign as Good employees are not relieved so soon and the company might be realising his importance now!!

What say friends....??

Rajul

hI,

I feel some employers are knowledgeable and understand the HUMAN RESOURCE CAPITAL better, some crinch of few clauses like this.

In my opinion, as an employee serves an orgn, depending on the role and responsiblity a compnay can make mid-way corrections in the appointment and subsequent orders. You can go ahead and sign if your employer is not a troublesome one and legel minded, if yes, then you can seek clairification on the meaning of COMPETATIVE with interpretation. If your employer is only trying to safe guard the interests on the company and you, you may sign.

I know one employer had informed the employees NOT TO WORK IN SIMILAR DOMAIN for Three years after seperating from the company. This was drafted by a very famous advocate office. This was not acceptable and non of them signed this.

Hope you are clarified.

Regards ,

Jayesh