I was working for IT firm in Noida for a client based in US. Signed an agreement stating that agreement can change in future and employee need to read it from Intranet portal time to time. When I left they had added a clause stating employee can not join client organization for 12 months after leaving. So can i join client organization or not before 12 months.
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Hello,
It will be good if you share the copy of such agreement with me once so that a more concrete advise can be give on the topic.
However, if there is a clause with regards to 12 months then also it is invalid as the same will be in restraint of the provisions of the contract act.
PS: Concrete advise can only be given after seeing the documents.
Regards
You are at liberty to join any organisation after your resignation
2) any agreement in restraint of trade is void under section 27 of contract act
3) )the Bombay High Court held that a restraint
operating after termination of the contract to secure freedom from competition from a person who no longer worked within the contract, was void. The court refused to enforce the negative covenant and held that, even if such a covenant
was valid under German law, it could not be enforced in India. (Taprogge
Gesellschaft MBH v. IAEC India Ltd., AIR 1988 Bom 157)
If you had access to confidential information of the company including the client database of your previous company then the restraint clause is applicable to you.
Hence without seeing the content of the agreement its difficult to advise.
If you didn't sign the additional clause then its not binding on you and you can join company of your choice.
The clause empowering your employer to make one sided unilateral changes/alterations in the employment agreement is bad, the very first place. Thus, clause added to the effect that employee can't join client for 12 months after leaving, is void ab initio. That's because your consent was not obtained before incorporating this.
You're free to join the client with 12 months of severance from your employer.
Best,
This condition the law of India will prevail because according to the Indian Contract Act the contract has been completed in India. According to Section 62 of the Indian Contract Act any novation in the contract shall break the contract and parties are free to make a fresh contract.
If any novation taking place in the contract and other party to the contract does not give his consent towards new changes then he shall not be bind with the contract. in your case When you left then they added a new cloth stating employee cannot join client organisation for 12 month after leaving. This condition is not applicable on you because this new condition is a novation in the contract and your consent is required for its execution.
However you have not given your consent because you have left the agreement prior to this amendment. Therefore you can join Client organisation after or before 12 months.
You can send him a notice that you have left the agreement before it's novation therefore it is not applicable on you. If they initiate any proceeding against you then you can establish your stand by placing that notice.
In contract law, a non-compete clause (often NCC), or covenant not to compete (CNC), is a clause under which one party (usually an employee) agrees not to enter into or start a similar profession or trade in competition against another party (usually the employer). Some courts refer to these as "restrictive covenants."
Section 27 of the Indian Contract Act-1872 provides that ”Every agreement by which anyone is restrained from exercising a lawful profession or trade or business of any kind, is to that extent void”.
Indian law is therefore very clear and strict on this point, any such non compete agreement shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, for such type of agreements it has shown that it has kept such non compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non compete clauses in employment contracts as “restraint of trade” is impermissible under section 27 of the Indian Contract Act-1872, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
Below is the agreement signed. Please see if this is lawful or not "NON-SOLICITATION COVENANT. I understand that during my employment with 'the Company I will have access to and obtain knowledge of the Company's Proprietary Information (including as defined herein), and that the Company will be irreparably harmed if I were to use that Proprietary Information — whether directly or indirectly — to the detriment of the Company, and its actual or potential business and/or human resources. Therefore, I agree that during the term of my employment and for two (2) years thereafter, I will not (a) be able to work with/for the existing and past clients/customers of the Company in any capacity as individual service provider, employee, consultant, contractor, officer, director, investor , agent, Or otherwise, employee of "Competing Business". (b) induce or influence, or seek to induce or influence, any person who is employed or engaged by the Company (as an agent, employee, independent contractor, or in any other capacity), or any successor thereto, in order to obtain such person as an employee or independent contractor for a Competing Business, or to cause such person to terminate his or her employment, agency or relationship with the Company, or any successor thereto; or (c) use Proprietary Information, or confidential Company or Affiliate information, to divert or take away, or attempt to divert or take away, or solicit or attempt to solicit, any existing or potential customer of the Company or any Affiliate,. which shall include any party receiving services from the Company or an Affiliate (whether or not I directly solicited such customer during my employment), in order to obtain such person or entity as a customer for a business or entity competitive with the Company or an Affiliate, or to cause such customer to alter in any manner its relationship with the Company or an Affiliate."
You cannot solicit clients nor disclose confidential information of the company
But you are at liberty to join competitor
Hello,
I would advise you to restrain yourself from joining the clients organization.
However, if any case is filed by the company then they will have to show that you were in possession of some vital and crucial information and also I would tell you that company usually do not file a case until and unless you were actually in possession of some vital information.
Regards
The scope of this clause is too narrow to be enforced.
This won't be able to withstand judicial scrutiny.
Non-solicitation clauses are restrictive covenants in contracts. The companies assert that such restrictions are necessary to protect their proprietary rights and their confidential information.
A non-solicitation clause is meant to put a restriction on an employee of a company, to prevent him from soliciting the employees or customers of a company, during and post-termination of employment.
The enforceability of non-solicitation clauses in India is very subjective. Indian courts have consistently refused to enforce post-termination non-compete clauses in employment contracts. These clauses imply a “restraint of trade” that is clearly barred by Section 27 of the Indian Contract Act, 1872. They are also seen as being against public policy because of their potential to deprive an individual of his or her fundamental right to earn a livelihood. The general trend in judiciary is that, the clauses operating during employment are valid and those operating post employment are invalid. The enforceability of the said clause depends on the facts and circumstances of each case.