• Can my previous employer restrict me from joining the client?

Hi ,

Myself Rohit. Currently I'm working in an Indian IT firm. When I joined my employer I signed a document that says I can't serve my client for 1 year from the day I resigned. 
My current employer used to provide services to a company that is based in US. And that they had a contract to provide services to the client for a year. The contract expired on Dec 31 2015 and the client hasn't renewed the contract. My client has shown interest to make me an employee of theirs. An employee of India branch and not US with which we had a contract. So my question is that can my current employer move legally against me if I accept the employment offer that has come from an Indian branch which was not our client at all ?

Please advise.
Asked 10 months ago in Business Law from Trivandrum, Kerala
1)under section 27 of indian contract act any agreement in restraint of trade is void

2) after your resignation is accepted you can accept the employment offer of the Us company indian branch 

3)the constitution of India in article 19(1) (g) provides an individual to practice any profession, vocation or trade of his own choice. . As a general rule, negative covenant restricting the employee beyond the period of employment are considered to be unreasonable but there are some exception to it. The exceptions include confidential information and non-solicitation agreements 

Ajay Sethi
Advocate, Mumbai
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he 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)
Ajay Sethi
Advocate, Mumbai
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1. Since both the entity are different from each other there is no restriction for you to Join the Indian firm.
2. Moreover of the new employer is not the competitor of your previous employer nor you were entrusted with the secrets of the previous employer, sch restrictive bond of one year is not binding on you.
Devajyoti Barman
Advocate, Kolkata
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Non-compete clauses are ordinarily not enforced by the Indian courts as they restrict business and trade but in some cases they may be enforced. The agreement containing the non-compete clause has to be perused threadbare to know the import of clause in the light of other clauses in it. The employer is free to file a lawsuit for injunction to restrain you from working with this client. In addition to this, it may also claim compensation from you for violating the clause, which you can contest in defence.
Ashish Davessar
Advocate, Jaipur
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1) if you resign and serve the notice period company ought to give you your relieving letter 

2) in the event company fails to do send email reminders to the company . 

3) you can rely upon  your salary slips to show that you worked for organisation for X  years

 4) company is under no obligation to issue you experience letter 

5) litigation is an expensive proposition 
Ajay Sethi
Advocate, Mumbai
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1) you must be having acknowledged copy of your resignation letter . 

2) once you serve the notice period mentioned in appointment letter and your resignation is accepted it should not cause any problems 

3) you cannot be declared as absconder if you serve the notice period mentioned in your appointment letter 
Ajay Sethi
Advocate, Mumbai
23408 Answers
1230 Consultations
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If the company does not provide relieving and experience letter then a lawsuit can be filed against it. Without relieving letter your career prospects may be in jeopardy.
Ashish Davessar
Advocate, Jaipur
18275 Answers
451 Consultations
5.0 on 5.0
So my question is that can my current employer move legally against me if I accept the employment offer that has come from an Indian branch which was not our client at all ?

Some employers may require new employees to enter into non-competition agreements before beginning work, and such agreements usually take effect after the employer-employee relationship has ended. Employers may require non-competition agreements for a variety of reasons, including protection of trade secrets or goodwill. However, courts generally disapprove of non-competition agreements as limitations on a former employee's right to earn a living. Therefore, when made the subject of a legal dispute, non-competition agreements are closely scrutinized in the court system. 
Non-competition agreements must generally be supported by valid consideration -- the employee must receive something of value in exchange for the promise to refrain from competition. If an employee signs a non-competition agreement prior to beginning employment, the employment itself will be sufficient consideration for the promise not to compete. However, if an employee signs a non-competition agreement after beginning employment, the mere promise of continued employment will not be considered valid consideration for the promise. In this case, the employee must receive something else of value in exchange for the promise. Such additional consideration may consist of a promotion or other additional benefit that was not part of the original employment agreement. 
Employers have a right to protect their relationships with their customers and their confidential information, but former employees have a right to earn a living. When the employer and the employee have entered into a non-competition agreement, these interests must be balanced. 
T Kalaiselvan
Advocate, Vellore
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After I have put my resignation and served my notice period. Can the company restrict me from giving my relieving and experience letter? If they do so can I get a favourable judgement?
The employer cannot hold your relieving order or relieving letter despite fulfilling the conditions of employment at the time of resignation. If there is an intention behind such action, you may issue a legal notice demanding the same failing which you may take this matter with the labor commissioner.
T Kalaiselvan
Advocate, Vellore
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128 Consultations
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If the current employer doesn't issue the relieving letter then can it be a problem in future? 
Is relieving letter important as a proof that i have been released from the company and not declared an absconding employee after i stop coming to office after i serve my notice period?
Relieving letter is an essential document for any future employment.  Even if the present employer may not insist about this the next employer, suppose you shift to some other more prospective employment, may insist on it or on background verification may get an adverse information from the previous employer if you have not obtained a proper relieving letter.
The relieving letter shall be a proof that you have been properly relieved by the employer and the employer cannot declare you as an absconder if he has issued a reliving letter already.
T Kalaiselvan
Advocate, Vellore
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128 Consultations
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No it is not. File a lawsuit for recovery of your salary and also the relieving letter.
Ashish Davessar
Advocate, Jaipur
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Before that issue a lawyer's notice.
Ashish Davessar
Advocate, Jaipur
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1) serve your notice period and leave the organisation 

2) send email to company that under section 27 of indian contract act any agreement in restraint of trade is void 

3) once you leave organisation company cannot impose any restraint on your taking job in another organisation 

4) if company refuses to pay salary issue legal notice to company to pay your dues . 

5) if company fails move court for necessary reliefs 
Ajay Sethi
Advocate, Mumbai
23408 Answers
1230 Consultations
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You said you are serving the notice period.  Well, do you retain the copy of the resignation letter tendered to the company and the acknowledgment issued by them.  
Did  the company give in writing to that you should not work with xyz company after giving resignation in this company?
Did the company state in writing that they will not disburse your salary if you dont sign the said agreement?
You are not a slave to the company hence you do not have to worry about this.
You can issue a legal notice quoting the above irregularity and get your grievances redressed, failing which you may drag the company to labor commissioner.
T Kalaiselvan
Advocate, Vellore
14177 Answers
128 Consultations
5.0 on 5.0

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