Employment with a competitor
Sandeep
(Querist) 14 September 2013
This query is : Resolved
Dear Sirs,
I am currently negotiating an offer with a competitor of my current employer. I have put together 7 years of service in my current organization.
My organization compels resigning employees to sign a stamppaper bond that restricts the employee from joining competition or its sister companies for 2 years. The signing of this bond is mandatory to get a relieving letter from the current employer.
I would like to have advice on following questions
1. What would be the impact of signing such a bond and still joining the competition as it has offered a better job opportunity
2. Will my current employer be able to take any legal action against me?
3.Will they be able to hold my PF and gratuity funds
Thanks in advance
Best Regards,
Sandeep
ajay sethi
(Expert) 14 September 2013
you have executed a bond that restrains you from joining a competitior for period of 2 years from date of leaving your employer . in such acase your present employer will take legal proceedings against you if you join the competitior . you cant pass on the business secrets to the competitior
Sandeep
(Querist) 14 September 2013
Dear Ajay Sir,
Thanks for the quick response. I have still not signed any bond. I am still in employment with my current employer. But as a practice my current employer will definitely ask me to sign a bond.
Can I take some preventive action to avoid litigation or legal action?
Ms.Nirmala P.Rao
(Expert) 14 September 2013
Dear Client,
Two years time imposed by your employer is reasonable restriction for not joining a job in a competitor or rial company and as per your employment contract you are also obligated not to disclose your previous employers secrets trade or otherwise of your previous employer to your future employer in breach of confidentiality agreements and in breach of service contract rules etc.You are bound by the terms ans conditions of Service Contract if they are reasonable and not illegal, immoral or opposed to public policy.
Ms.Nirmala P.Rao
Legal Expert
Hyderabad
R.K Nanda
(Expert) 14 September 2013
agree with experts.
Sandeep
(Querist) 15 September 2013
Dear All,
Thanks for the prompt responses.
From what I understood or rather misunderstood from the Indian Contracts Law that section 27 gives me right as an individual to earn livelihood in any legal profession till I do not sell the goodwill of my previous employer.
I am ethical enough to not do that. I am also not privy to any intellectual property of the previous employer. My core skill sets are into Technical Service to Customers and Marketing and Product management. My new role will be into Product Management.
Do I still need to be wary of signing the stamp-paper bond? Just as a correction, I am not currently in any sort of a bond with my current employer but they use the bond signing as a tool to instill fear into the leaving employee and harassment. These are my core skills acquired over the years through various organisations( no formal training has been imparted in this regard)and so how else do I earn a livelihood?
Regards,
Sandeep
ajay sethi
(Expert) 15 September 2013
dont sign any bond at time of leaving the organisation . companies have deep pockets . they can afford litigation and harass the employees . if you agree that for 2 years you wont work for any competitor you are bound by the terms of bond signed by you
Sandeep
(Querist) 15 September 2013
That is exactly on my mind. I ma not sure how I will do it since I do not get a relieving letter from the company without that, and the new company will need me to bring in a relieving letter.
Again can I take some preventive action to avoid compulsion by the company asking me to sign the bond?
Regards,
Sandeep
Ms.Nirmala P.Rao
(Expert) 15 September 2013
Dear Client,
The only remedy for you now appears to be to file a civil suit of injunction to restrain your current employers from forcing you to sign a bond which requires you not to join a competitor's company for a period of two years and not to relieve you until then.. Before that get issued a legal notice to them that in view of better employment opportunities you request them not to force you to sign any bond failing which you'd be constrained to take legal proceedings against them.
Ms.Nirmala P.Rao
Legal Expert
