Employee001 27 October 2015

Non-solicitation clauses

Hi, all,

This has probably, nay, definitely been answered around here to varying extents. However, at the risk of having you repeat yourselves, can someone please help me out here?

Background - I'm into client servicing and also actively involved in client acquisition. One such client that I brought into my firm has now made an offer to have me join them. The client is not based in India and is opening an office in India after I join. However, in their first engagement with my firm they did sign a contract that includes a non-solicitation clause. I've appended the entire statement below. Additionally, I've also included the relevant parts of my employee contract that forbid my joining a client. From the research I've done, I've come to understand that these clauses hold no grounds under section 27 of the Indian Contract Act, except in the case of goodwill, which I don't think is at stake here. Can someone shed some light on this? I don't think I have anything to lose and the client is also willing to sign a longer contract with my firm if it'll help my cause.

Here's the section clients sign:

Non-Solicitation: Each party undertakes that during the Term of this engagement and for a period of one year following its termination or expiration, it shall not, without the previous written consent of the other party, employ or engage the services of any person who was employed by/ rendering services to the other party at any time during a period of 12 months preceding the date on which the offer for employment/engaging the services is made by such party.

Here's the section employees sign:

You shall not for the period of 12 months after the termination of your employment with the Company, wherther as principal, servant, agent, consultant or otherwise, solicit the custom of or deal with the business of any person, firm or company:

- if you have, at any time during the 12 months preceding the termination date canvassed, called on, solicited business from or procured and accepted orders from such person, firm or company, and/or

- if the person, firm or company who was, at any time during the 12 months preceding the termaintion date, a Client or a Prospective Client of the Company to whom the company has made or is intending to make a formal business presentation (the terms or details of which you are aware of or concerned with) at any time during the 12 months preceding the termination date

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3 Replies

Kumar Doab (FIN) 27 October 2015

The contract between two establishments is different from one signed between employer-employee. If you are to end the contract between two establishments then it should be ended with mutual agreement and propery registered too so that nothing backfires.

It is entirely your prerogative to sign Non Compete/Non Solicitation clauses etc in employer-employee relationship.Once signed by free will it gives thr right to other party to claim damages and approach court of law.

Rest is test of law. Be it applicablity or extent of damages.

Employee001 27 October 2015

It's a part of the entire employee contract though. You can't not agree to a particular term within a contract and sign the rest. Which is why I've asked. Thank you for the input.