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RPK (Co-founder)     20 February 2015

Validity of non competence clause

I had signed a few documents on the first day of my work at my previous employment. After having worked for around 6 years in a very niche industry, I resigned and started my own company and am trying to get the same kind of work from the same overseas customers. I have experience in only this kind of work. 

The CEO of my previous company asked me to meet him and at the meeting he reminded me about the documents that I had signed. It also has a non competence clause which continues for one year even after I quit.

  1. Is such a contract valid?
  2. If I have not got any work so far, but am only trying for projects before the 1 year cooling period, is it still a breach of contract? (He's alleging that as I am proposing to do the work at cheaper prices, he is forced to reduce his prices too)


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 5 Replies

Kumar Doab (FIN)     20 February 2015

 

The employer was bound to supply you the certified copy in original of each document signed by you.

If you have not collected each document then you have erred.

You could have demanded during the latest meeting also and can demand the same now as well.

The Indian Courts of law have consistently been declining to enforce Non Compete clauses/agreements as it hits the right to earn livelihood and clauses of Indian Contract Act.

If there was a period of 1Y set in the Non Compete Agreement then there is nothing left to do about the agreement!

Now the CEO is trying to trap you leveling unfair Competition.

 

You may go thru The Competition Act, 2002. The complaints are lodged before CCI (Competition Commission of India ) and the orders passed by the Competition Commission of India can be challenged before the COMPAT (Competition Appellate Tribunal) within 60 days. ……………………….You should preferably approach an Lawyer/law firm well versed with such matters ASAP and proceed under the expert advise of your counsel.

RPK (Co-founder)     20 February 2015

Thanks for the quick response, Mr. Kumar Doab. I did collect the copies in my last meeting.

 

So, you mean the document will be valid for 1 year? Even if it is hitting my livelihood?

 

What are my options now? As a damage control measure, he wants me to mail the customers accepting a breach of contract and back out completely. Am I supposed to do that or can I just wait for the 1 year period to complete? Mailing them so, will end my business altogether.

Kumar Doab (FIN)     20 February 2015

NO, I don’t mean the Non Compete Clause/agreement was valid for 1year.

As per my limited understanding::::It was valid till you were employed with this establishment………It is not valid even for a second after the termination of employment.

You may not write any email as desired by this CEO.

You must show all docs on record and let your counsel draft any communication/representation/reply that you may have to submit verbally or in writing.

The lawyer that has examined all docs and inputs can advise you the best.

 

The posts in this thread are mere discussions and you should let your lawyer validate each of your contentions. 

RPK (Co-founder)     20 February 2015

Sure. Thanks a lot for your advise. Really appreciate it. :)

Kumar Doab (FIN)     20 February 2015

Each trade including IT/ITeS/BPO/KPO/Call centers now have its employee’s unions and have affiliated with trade unions like CITU/INTUC/AITUC/BMS etc………….and trade Union Leaders are well informed and know precise ways to handle such matters.

All affected employees may approach the unions.

 

All employees should form and be part of unions ( and thus form 'Works Committee' that is an authority as per ID act....... and affiliate with trade Unions……………..Trade Unions are willing to embrace the employees.


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