It is certainly breach of non poaching clause. There is no doubt about it.
Non Solicitation and no poaching
I work for a company as a Contract Employee for their client and I have signed a contract with a company, it states as below : Non-Solicitation & No Poaching: Service Provider(Me) shall not hire, solicit, or otherwise engage any employee of (XYZ) or work directly with the Client of (XYZ) for the term of this Agreement and for a period of two (2) years following its expiration or termination. Now another company which I found on a job portal wants me to work for them and they have the same client. Is it a breach ?
Asked 4 years ago in Labour
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9 Answers
What legal issues can I face in case the breach is found.
Asked 4 years ago
You are at liberty to join another organisation after leaving the company
2) any agreement in restraint of trade is void under provisions of section27 of indian contract act
3) you cannot be restrained from joining another company for period of 2 years
Company cal sue you for damages in case of breach of contract
Yes, it may amount to breach in terms of the contract you have signed with the present employer. If detected, the company may sue you for breach demanding monetary compensation, besides terminating your contract.
Insofar as the Indian position is concerned such agreements have been held to be valid on very restrictive grounds. Indian Contract Act, 1872 (“Act”) is the primary legislation in India that deals with agreements in restraint of trade and legality thereof. Section 27 of the Act bars such agreements in clear and express terms.
It states, “Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.”
A non-compete / non-solicitation contract or a clause therefor is valid in India on very narrow grounds viz. on satisfying three-pronged test of being reasonable, in furtherance of promoting trade and commerce rather than creating an impediment for it, and not operate so as to curtail employees’ fundamental right to trade and commerce and livelihood.
Therefore post termination of your contractual liabilities the previous employer cannot restrict you legally from taking up an offer with his competitor company.
The employer clearly knows that he cannot take any action agaisnt you post termination of your contractual liabilities with him, but he may issue a legal notice citing the employment or contractual terms and conditions, to which you issue a reply notice denying his allegations and wait for him to proceed through court of law, which can be challenged as per law properly
Dear Client,
It will be a breach of the non-solicitation and no-poaching clause as they have the same client. They are most likely to send you a legal notice claiming for damages.
Thank you.
If it's clearly mention in that agreement and you have signed then it can be breach. Need to examine the entire agreement to advice you clearly.
- Since , there is clause for non solicitation & no poaching , then if you working in another portal will be a breach of the terms of the agreement.
- However, the employment bond with the negative covenant is valid and legally enforceable, if the parties agree with their free consent i.e. without force, coercion, undue influence, misrepresentation and mistake, but it is not enforceable, if it is either one sided, unconscionable or unreasonable.
- Further, section 27 of the Indian Contract Act prohibits any agreement in restraint of trade and profession.
- Hence after resignation from this company , you can joint another legally.
