• Regarding employment agreement

Hi,
    I am working in an IT company in Chennai. In my employment agreement, it is mentioned as follows.

"During your employment with us, you will not work anywhere else, directly or indirectly, or conduct any business, part-time or otherwise"

Is the above statement legal? I have plans to develop applications and submit to online stores. Does application development come under any of the above?

Thanks in advance.
Asked 9 months ago in Business Law from Chennai, Tamil Nadu
1)clause in your employment agreement is perfectly legal 

2) you cannot work in another organisation or carry on nay business during course of your employment 

3) legally during your employment with the organisation you cannot develop applications and sell it to online stores
Ajay Sethi
Advocate, Mumbai
23353 Answers
1222 Consultations
5.0 on 5.0
The restriction is to operate only during you employment with your employer and not after the cessation of it, so there is no illegality in it.
Ashish Davessar
Advocate, Jaipur
18183 Answers
449 Consultations
5.0 on 5.0
The Company's rule is very much valid legally because it is regulation framed by the company towards the employment and conduct of the its employees.  Since you have agreed to the condition and joined the company, you are bound by its rule, now you cannot claim anything against it nor can clarify its legality. 

The development project you are planning to work on privately besides your employment may also attract sore eyes and it may be treated as a violation of the terms of employment by the company because of the reason that you are earning out of it in addition to your present employment. 
As long as the issue is not exposed, you may not find it illegal but you will be having your own people around you to dig pits for you, this will be situation where you will not be able to defend yourselves on the face when the disciplinary action is slapped on you, though you may fight it out legally through a legal forum or court of law and the result will depend on how you interpret the prevailing law and defend yourself using the loop holes of law. 
T Kalaiselvan
Advocate, Vellore
14151 Answers
127 Consultations
5.0 on 5.0
Is the above statement legal? I have plans to develop applications and submit to online stores. Does application development come under any of the above?

The company's regulation for employment/recruitment are standard rules that are being followed by most such companies across the country, so there is no question of disputing its legality  after having accept the employment agreeing to the terms and conditions. 
T Kalaiselvan
Advocate, Vellore
14151 Answers
127 Consultations
5.0 on 5.0
A. Now a days, it is a general standard clause in the employment agreement. It means that during the course of employment you should not engage with any work other than company work due to protects the company interest.

B. However, once your company work completed  during the course of employment/duty i.e, your working hours. you are free to do your work or any work for the benefit of your personal growth. Therefore, it completely bars to work during the company working hours thats all. 
B.T. Ravi
Advocate, Bangalore
736 Answers
31 Consultations
5.0 on 5.0
1) section 27 of contract provides any agreement in restraint of trade is void

2) however during your course of employment you cannot work for any other organisation 

3) it only provides that in case you leave any organisation and your employer by agreement restrains you from joining any another  organisation such restraint  would be void 

Ajay Sethi
Advocate, Mumbai
23353 Answers
1222 Consultations
5.0 on 5.0
It is not related to your case as in your case the clause speaks only about restriction during your employment.
Ashish Davessar
Advocate, Jaipur
18183 Answers
449 Consultations
5.0 on 5.0
Contract of service can easily be termed as ' when one person has agreed to employ another person as an employee, and the other person has agreed to the terms of employment and of an employee, then the party have said to be entered in Contract of Service'
Section 27 of Indian contract Act, 1972 states that,

"Agreement in restraint of trade, void – Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.
The constitution of India in article 19(1) (g) provides an individual to practice any profession, vocation or trade of his own choice. The legal position with regard to the post- contractual covenants is well settled in India. 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 (to a reasonable period of time).
Section 27 of the Indian Contract act is something different to your issue and not applicable to the subject query. 


While in employment of one company you should not get employed with another company. All employers shall draft text of employment contracts and if required bring interpretations to suit them, to deter the employee from any gainful activity and activities that shall consume his/her time attention
T Kalaiselvan
Advocate, Vellore
14151 Answers
127 Consultations
5.0 on 5.0

Ask a Lawyer

Get legal answers from top-rated lawyers in 1 hour. It's quick, easy, and anonymous!
Ask a Lawyer

Business Lawyers

T Kalaiselvan
Advocate, Vellore
14151 Answers
127 Consultations
5.0 on 5.0
Ajay Sethi
Advocate, Mumbai
23353 Answers
1222 Consultations
5.0 on 5.0
Ashish Davessar
Advocate, Jaipur
18183 Answers
449 Consultations
5.0 on 5.0
Krishna Kishore Ganguly
Advocate, Kolkata
12131 Answers
233 Consultations
5.0 on 5.0
Devajyoti Barman
Advocate, Kolkata
5248 Answers
54 Consultations
4.9 on 5.0
Nadeem Qureshi
Advocate, New Delhi
3537 Answers
130 Consultations
4.9 on 5.0
Shivendra Pratap Singh
Advocate, Lucknow
2771 Answers
41 Consultations
4.9 on 5.0
Rajgopalan Sripathi
Advocate, Hyderabad
873 Answers
43 Consultations
5.0 on 5.0
Lakshmi Kanth
Advocate, Hyderabad
224 Answers
2 Consultations
4.8 on 5.0
Shashidhar S. Sastry
Advocate, Bangalore
1242 Answers
59 Consultations
5.0 on 5.0