Inserting certain clause in the appointment letter
Querist :
Anonymous
(Querist) 21 May 2025
This query is : Resolved
Is this clause of my Appointment latter is valid if i joined Comptitor company after resignation ?
“The employee shall not, without written approval of the Managing Director or Officers
authorized by the Company, disclose, publish or authorize anyone else to publish
either during the term of employment or subsequent thereto, or divulge any information
of confidential nature, regarding his employment by the Company. He/She shall not
take with him, without prior consent of the Managing Director, any drawing or records
of a confidential character when he/she leaves the office.”.
Can a company sue the employee for breach of the terms and conditions mentioned in the appointment letter ?
T. Kalaiselvan, Advocate
(Expert) 21 May 2025
Non-Disclosure Agreements (NDAs), are generally enforceable even after an employee's resignation, provided the agreement is properly drafted and doesn't unduly restrict the employee's ability to find future employment.
The NDA should clearly define what constitutes confidential information, preventing ambiguity and potential disputes.
In the employment offer letter the clauses mentioned therein clearly conveys the meaning reflected in the above paragraph.
However the agreement should specify the duration of the confidentiality obligations, which can extend beyond the employment period if necessary.
Confidential information, including trade secrets and business plans, can be a significant asset for a company, and NDAs help protect these assets, hence it is enforceable in law if the employee is found to have breached the conditions post resignation.
Even after leaving employment, former employees may still be privy to valuable confidential information that needs to be safeguarded, hence for maintaining the confidentiality, this clause has been inserted.
Dr. J C Vashista
(Expert) 22 May 2025
The terms and conditions of appointment shall prevail, which may differ from an organisation with another.
Generally all organisations impose such restrictions on key appointment(s) termed as Non-Disclosure, as very well analysed, explained and advised learned senior expert Mr. T Kalaiselvan which I endorse and appreciate
Querist :
Anonymous
(Querist) 23 May 2025
Based on the above clause mention they sent latter,
I have 16 years' experience with similar field only, so cannot start new line or other. Before that they hired me from competitor also.
Should i have to leave my new company and be unemployment.
What is my right.
I don't have any proprietary document of that company; they are just blaming me.
Immediately CEASE AND DESIST from continuing your employment or
engagement with XXXX ( COMPTITOR) or any competing
entity;
Notice they sent:
Immediately CEASE AND DESIST from using, disclosing, retaining, or
transmitting any confidential material or trade secrets, including but not limited to
technical data, product formulations, plant designs, production parameters, or
customer/vendor information belonging to XXXX (old company)
Provide a written undertaking within seven (7) days from receipt of this notice
confirming:
• That you have ceased all competing activities;
That you are no longer in possession (in any form) of any confidential
documents or data belonging to the company;
•
That you have not disclosed or misused any proprietary information
obtained during your tenure with our client...
Querist :
Anonymous
(Querist) 23 May 2025
during last week of my notice period, they force me to sign (Back dated NDA -2016). Whereas during my employment. there was no proper NDA document. I refused them to sign, now they are not sharing my F&F statement, not releasing my Gratuity amount.
T. Kalaiselvan, Advocate
(Expert) 23 May 2025
In India, Non-Disclosure Agreements (NDAs) and Non-Compete Clauses are contractual tools used by employers to protect their business interests. However, their enforceability is subject to the provisions of the Indian Contract Act, 1872, particularly Section 27, which prohibits any agreement in restraint of trade and profession. As per the mandate of Section 27 of the Indian Contract Act,1872, any terms and conditions of an agreement that directly or indirectly compel the employee to serve the employer or put a restriction on them joining the competitor or other employer are not valid. The employee has the right to resign from employment even if he has agreed to the employment bond to serve the employer for a specific period. In the case where the employer can prove that the employee is joining the competitor to disclose the trade secret, then the court may issue an injunction order restricting the employee from joining the competitor. Further, Section 73 of the Indian Contract Act,1872 makes provision for unliquidated damages (not stipulated in a contract), Section 74 of the Act deals with liquidated damages (stipulated in a contract), and no compensation is attracted for mere breach of contract under Sections 73 and 74 of the Act. There is no overarching law that prohibits a person from doing multiple jobs. But, before joining another Company, you are required to tender your resignation from the earlier company and obtain a relieving letter that eventually causes the dual employment or overlapping of service. Background verification (BGV) check is a process many organizations carry out to verify the information provided by the candidate during hiring. Verification of EPFO records through UAN is critical for conducting employee background checks because it allows employers to confirm that their employees are not using false or stolen identities to gain employment. In case of a negative background verification check, an employer can even reject/terminate the employment of the candidate, following the service rules of the establishment, and that may potentially damage your service career.
