Namaste, I have worked with an Indian subsidiary of a US-based organization for 10 months in a management position. The company is based in Pune, and I am from Hyderabad. Due to various circumstances including seeking a career with more work-life balance, I have left the organization. I provided notice in March and May 12th was my last day. Today (twelve days after my last working day), HR sent me an email asking me to sign a new NDA without which they will not process my Full and Final settlement. I don't want to sign this NDA because two of the clauses in it seemed very dangerous: 1. The Receiving Party shall perform any acts that may be deemed necessary or desirable by the Company to confirm or evidence the Company’s ownership of all the Work Product to the fullest extent possible, including without limitation, by executing further written assignments or other instruments of transfer in such form as may be requested by the Company. If the Company is unable, after reasonable effort, to secure the Receiving Party’s signature on any such papers, the Receiving Party hereby irrevocably designates and appoints the officers of the Company as the Receiving Party’s agent and attorney-in-fact to execute any such papers on his/her behalf, and to take any and all actions as the Company may deem necessary or desirable in order to protect its rights and interests in any Work Product. 2. The Receiving Party hereby permanently waives all ownership, integrity, special, moral or similar rights, if any, that vest or may vest in the Receiving Party. The Receiving Party further acknowledges and agrees that through the complete and permanent waiver contained herein neither do the Receiving Party's legal heirs retain any ownership, integrity, moral, special or similar rights in and to any Work Product. What is the appropriate way to respond to this? I am not in favor of signing this new NDA. I have already signed an NDA in the past.
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Inform the company that you are no longer an employee of the company and not bound to sign any NDA
2) that you are entitled to be paid your dues and company cannot hold on the same for your refusal to sign NDA
3) if company refuses to pay file suit to recover your dues
Hi Ajay sir. Thank you for your prompt guidance. The company has a lot of money to waste on legal battles. I've seen them stoop to that level in the past while I was employed with them. On further reading online, it seems that labor courts are not very quick. And apparently, if this becomes a civil matter (I just read something online, so I'm not sure), it is supposed to be a very costly affair. Considering this additional information, what is your recommendation?
Litigation is long drawn and expensive proposition
if amount involved is substantial sign NDA and take your money
Q.1.
The issues are vital but it should be your wisdom to accept and to sign or not to sign. However, such NDA is common. Nevertheless, since you had already resigned so if company withhold your dues then you can file recovery suit to recover your dues with interest and expenses but practically if will not sign NDA then your full and final settlement and relieving letter would not be cleared causing issue to you in joining new company. You can simply write company refusing to sign on the ground that you had already resigned from so cannot sign NDA.
Q-2.
Your apprehension is correct. Company will last the legal battle.
You don’t have to sign a fresh nda for the sand it’s your right to get full and final settlement
In the event of termination or resignation, it is usually the case the competitors try to poach an employee from the previous employer
In some instances, the employer may want to not disclose his business practices to competitors. It can also happen that confidentiality is required for a certain transaction or work. The employer has every right to ask the employee to sign an NDA in such instances. The employer can offer or not offer any consideration for signing such NDA.
The party demanding NDA should inform why NDA is there and what confidentiality information covers. Further, he should also indicate the manner of signing the NDA. Once signed, the NDA becomes enforceable against signee.
However you are not obligated to sign the NDA post resignation especially after completion of the notice period.
If this NDA was not a condition or terms of employment, you can refuse to sign the same post resignation.
If the employer is withholding the F&F settlement or relieving letter or experience letter, you can take legal action as per procedures of law to recover/procure them.
If you are frightened about the legal action that may be taken by the employer if you don't considering their power to put pressure on the employee by challenging the litigation, then you may better consider signing the NDA, get all your dues and decide about what is to be done later on.
Moreover you were working in a managerial position, you will not come under labor laws to fight through labor laws.
You may have to approach high court with a writ petition alone, which will be more costly.
You can take wise decision at right time.
- As per Specific Relief Act, if any employee quits before the notice period, the Employer can only recover the Notice pay, and the Company cannot force to serve the entire notice period.
- Further, the resignation decision is the employee’s decision, and the employer cannot sue for breach of contract, if the employee leaves without serving contractual notice.
- Further, section 27 of the Indian Contract Act prohibits any agreement in restraint of trade and profession.
- Since, you have already tendered your resignation , then there is no requirement for signing the new NDA , and when you have already signed earlier.
- You can reply the said email after mentioning the same.
- Further, if company not pay the final settlement amount , then you can send a demand legal notice , and for which the company is bound to pay
