LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Sanjay (IT Engineer)     05 October 2012

Employment service bond



I would like to get an advice from you regarding breaking an employment bond .I am working for an Indian company and deputed in US.I have been working at onsight for 3+ years.

I have a current LOA (Letter of Agreement)or bond with my Indian employer that I shall not seek employment with the client.My Client is ready to hire me as they found me as a critical resource .I also would like to join them as it is good for my career.

Do you think my Indian Employer can do anything against me incase the client is ready if I apply for the post which I am working?

They have not written anything on the bond that what if I break the bond.I am ready to pay them a compensation with in my limit and I dont want to pay any fancy amount if they say so.Please find the attached bond which I have signed with my Indian Employer.
Please somone adivse me here.


 12 Replies

Kumar Doab (FIN)     05 October 2012

Costs are mentioned in 13 {i} which amounts to actual costs and bills shall have to be produced and {ii}.

You may also look into 10{b}.

You are required to deregister and return to India.

You may explore the possibilities of an amicable settlement with company. Company has deputed from India and may pull you to Indian Courts.

You may show all docs to a competent and experienced service lawyer specializing in such matters.

Most Importantly would your next employer buy out the costs involved and legal cost and provide legal support, allow you to deregister and help you to register again……and state so in writing?

You may evaluate all pros and cons and take a qualified decision.

Do not get just lured and jump in legal traps.


UNITES Professionals

is said to be the premium union for IT personnel.

You may speak to them. They may be in a position to mediate or help you.

Doveson (advocate)     05 October 2012

No such contracts are binding in law. Am unable to open your bond but still it is not binding on you unless a period is specified which is reasonable. Which cannot be more than ayear. Your indian employer can however sue the american company under torts for seducing you away from them. But since it is a client, the company would never do it. Go ahead. Don't worry about such small issues when climbing your career ladder as long as you don't cheat somebody.
1 Like

Doveson (advocate)     05 October 2012

The clauses notwithstanding. And you need not come to India to answer a civil claim.
1 Like

Kumar Doab (FIN)     05 October 2012

Collect all docs and facts which shall establish the revenue and profits generated by you for company in 3 years and can justify that you have justified the expenses incurred on you, and company has collected huge profits with your efforts.

M.S.R.Murty ( Manager (Admn))     05 October 2012

Dear Mr. Doveson,

Whether Section 3 and Section 492 of  I.P.C. will be a tool to the Management in this case ?

Kumar Doab (FIN)     05 October 2012

Mr. Doveson has given valuable advice.

Employee can not be kept on hook for eternity,infinite period.

Reasonable restraint may be say 6 months.However what shall an employee do for 6 months sell bahjiya. Courts are not dumb.You are closest to the facts. Before you approach your lawyer arrange all docs and facts in order.While you approach your lawyer, put up all facts at these are and do not conceal.YOur lawyer shall help you understand the merits and decide the strategy.

You may find the attachments useful.

Attached File : 739907401 417759075 validity of employment bonds.pdf, 739907401 background paper.pdf downloaded: 179 times
1 Like

Sanjay (IT Engineer)     05 October 2012

Thank you very much for your advice.Really appreciate for the help at this stage as I am blind about the consequences if I break the bond.At the same time I dont want to miss this opportunity as it is really good to my career.

I have few more points here to discuss with.It would be of great help if some one could shed some lights here. 

My Indian company had renewed my bond this year stating that they are extending my contract for another year from April 2012 till April 2013 and have included all the claueses under that.This is done as part of process and I had to sign it.So what if I join the client company before the said period ?

I am ready to pay a reasonable compensation in case if I could not fulfil the notice period and I am sure that my client company will support me in all means.They dont have any issue in hiring me since there is no such bonds exists between the Indian company and them.

So what happens if they file a case against me in India?

Attaching the bond once again for your reference.

Thanks in advance,






Attached File : 739912701 deputationletter.doc downloaded: 74 times

prasad B vaidya (student)     05 October 2012

I was working as lecturer in private unaided college took  5 service bond  for giving sponcorship for higher studies from me and bond was written by the college in which there was stipulation that i f  i will leave the job before completion of 5 years term i have to pay Rs 50,000/ but college has issued termination before even completion of  1 year term and in the termination order they demanded Rs. 50000/- as compenasayion

prasad vaidya

M.S.R.Murty ( Manager (Admn))     05 October 2012

Dear Mr. Prasad,

Please check your terms of Bond once again.  It should not be in such a way 

Kumar Doab (FIN)     05 October 2012

@ Mr.Prasad,


Kindly start a new thread, always.

As advised by Mr. Murthy the bond might have been drafted to suit the employer even in case of termination. However bond, termination order with reason of termination, circumstances and documents e.g. stinkers/emails/notices/memo/charge sheet/appraisal/verbal challenge-PEP etc prior to termination should be looked into.

However in case of termination employee may have an edge.

Kindly start a new and exclusive thread with details.


1 Like

Kumar Doab (FIN)     05 October 2012

@ Sanjay,

Company has obtained fruitful results from your service to client and its expenditure incurred on your deputation and as your service was found worthy, company has chosen you to be continued to be deputed with this client.

In case of extension of visa if company has paid some nominal amount that should only becomes expense.

If you do not have access to any sensitive information which is propriety of your principle employer then obviously you can’t share with anyone. Moreover while you are located in client’s office you are executing work assigned by client using systems provided by client. Thus company may not succeed in its claim that your employment with client has lead to disclosure and has violated Non Disclosure agreement.

However you are closest to the facts.

Weigh all options. Prepare your defense well and secure all relevant record and docs. Once you leave company shall not allow access to information, although company is custodian of record.

Do you have copies of your visa application? You may show it also to your lawyer.

KIndly keep the thread updated.This shall help many of the fellow colleagues, countrymen.

1 Like

Paddy (---)     06 October 2012


The issue is less of legal and more of a ethical.

Legally, the Comany cann't bond you to work with them. If you want to join the client company, you can, after a respectful discussion with your current employer. They might try to threaten you to take to court etc. But don't worry, if get scared, they will scare you more.

Morally, since the Company has offered you overseas assignment, provided international exposure, and invested in your development, would it be fair to ditch them this way. You had given a word to your employer not to join the client before starting this assignment. Now, after you got enough experience, you want to break that commitment. 

The choice is yours. All the best.

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Popular Discussion

view more »

Post a Suggestion for LCI Team
Post a Legal Query