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Joining competition after leaving one job

(Querist) 27 August 2012 This query is : Resolved 

How can a company enforce the contract , wehre in the employee has signed the contract and agreed that he will not be joining the competition , but after resignation he immeditely joins the competition . How to enforce it in the Court. Please reply on urgent basis. Thx.
ajay sethi (Expert) 27 August 2012


Section 27 of Indian Contract Act, 1872 clearly states this principle; “Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, to that extent, is void.”

Employment agreements can only restrict an employees' activities during the tenure of their employment.

what are terms of contract ? what loss has been cause d to your organisation by acts of employee ? issue legal notice to ex employee . has he stolen any data ?

ajay sethi (Expert) 27 August 2012
if employee had agreed to serve for 3 years and he left employement at say end of 1 year and joined competiror move court and claim compensation for loss caused to orgainsation . also ask for enforcement of negative covenant restraining him from joining competitor during contract period
Guest (Expert) 27 August 2012
I endorse the views of Shri Ajay Sethi. However, any casual consultancy with your negligible information may not orive to be useful to you. So, it would be better for you if you get consultancy on detailed examination of the terms of your agreement by some service law expert by hiring his services, which your organisation can very well afford.
Kumar Doab (Expert) 14 April 2015
Agreed that you should prefer to show all docs on record to an able Labor Law Consultant/Service Matters lawyer/law firm and proceed further under expert advice of the counsel engaged by you/your establishment.


Indian Courts of law have consistently been declining to enforce Non-Compete Clauses/agreements as it hits right to earn livelihood, and provisions of Indian Contracts Act.



Some contracts are not even worth the piece of paper on which these are written..........and many contracts may be disposed off as unconscionable,unreasonable,unenforceable,illegal,unlawful.........etc.



Instead good HR practices,remuneration,opportunity of learn/develop/grown,career may work wonders.


Good employers and industry captains are not wary of attrition as they have virtually NIL/less attrition and also have proper succession plans in place.


Employees are uniting and getting well informed and supported by their lawyers.


Properly informed and supported employees know how to defend their rights and can even initiate penultimate steps.


You may carefully analyse why employers loose in courts of law and market place.!!!!


In majority of the cases employers,legal advisers, also know that they are initiating a loosing battle.


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