Upgrad
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Shubhasis Mathur   28 January 2016

Legal implications from joining the other company

Hello Team,

 

I am working in an IT firm in Noida. The client(project) for which I am working is a US based Telecom company. I have been serving in the company from last two years. Last month the project has moved to a different IT company at Noida location. I am working for the client as a contractor but full time for my company. Now I have got the full time employment offer from the other IT company who have got the same project under bidding, which means they will make me work for the same client. Although I havent signed any bond with my present company but there is a clause in my offer letter of my present company(signed by me) which says that I cant serve the same cleint after leaving the company for atleast 12 months.

My question is what are the legal implications I can face and is it safe to join the new company, provided the new company HR is saying that there will be no problem.

 

Please suggest.

 

Thanks,

Mathur



Learning

 4 Replies

Kumar Doab (FIN)     28 January 2016

Whats is the heading and exact language for this clause?

Which company has inserted this clause: that has employed you and has issued appointment letter Or that has contracted you (Client)? 

 

Have you sined any service agreement/bond?

 

Is there any other clause too in appointment letter/any other agreement signed by you e.g: Confidentiality/Trade Secrets/IPR/Non Solicitation etc?

 

Which company is appointing you now; the one that has acquired the project or some other?

 

Apparently you shall be leaving the company that has employed you and joining other company and the oter company shall be seconding/deputing you to work with the same client/location/office!

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

Shubhasis Mathur   28 January 2016

Thanks for the reply. Here is the response inline:

Whats is the heading and exact language for this clause?

The below is from the offer letter which I signed while I joined:

You acknowledge that you have signed Covenant against Disclosure and Covenant Not to Compete/Non-Solicitation
("Covenant"), which is incorporated into this Agreement by reference and is made a part of this Agreement and that it
constitutes an integral part of the terms of your employment. In the Covenant, you have agreed that for a period of
twelve months following termination of your employment for any reason whatsoever you also confirm and agree that
these restrictions are reasonable and are legitimately required to protect the business interest of the Tech Mahindra
Ltd.
(i) You will not solicit business and/or sell services/products or build business relationship with customers, you were
directly or indirectly involved with, during your tenure in Tech Mahindra Ltd
(ii) You will not interfere with its business relations, including but not limited to soliciting or providing services to any of
Tech Mahindra's clients (except as directed by Tech Mahindra Ltd), directly or indirectly.
(iii) You will not be employed by a client of Tech Mahindra Ltd for which you performed services while employed by
Tech Mahindra.
(iv) You will not solicit or induce Tech Mahindra Ltd associates to join a client or to compete with Tech Mahindra Ltd.
(v) You undertake not to solicit or induce or endeavor to solicit or induce any consultant, supplier or service provider to
cease to deal with the Company and shall not interfere in any way with any relationship between a consultant, a
supplier or a service provider and the Company.

This one is from the Code Of Ethical Business Conduct document:

The Company believes that the services of an Associate are crucial to Tech Mahindra and its clients. While employed with Tech Mahindra and a period of one year thereafter, Associates shall not solicit and shall not provide services to any of Tech Mahindra’s clients (on the same account / project) with whom they have been associated in the preceding one year from the date of separation (for any reason) from Tech Mahindra During the tenure of employment with Tech Mahindra and after the cessation of employment, the Associate is responsible for safeguarding Tech Mahindra’s business and confidential information including its customers’ names and other business details, information regarding technical, trade or business data.
Associates should not solicit or induce or endeavour to solicit or induce any person who is employed by the company to cease working for or providing services to Tech Mahindra. Associates should not also solicit or induce or endeavour to solicit any consultant, supplier or service provider to cease to deal with the company and shall not interfere in any way with any relationship between a consultant, a supplier or a service provider and the Company.
In any event of a violation of the above mentioned Tech Mahindra reserves the right to any legal remedy available to it under applicable laws and claim any such damages from you as it may incur from this act of yours.

 

Which company has inserted this clause: that has employed you and has issued appointment letter Or that has contracted you (Client)?

The company who employed me, Tech Mahindra not client.

 

Have you sined any service agreement/bond?
No

 

Is there any other clause too in appointment letter/any other agreement signed by you e.g: Confidentiality/Trade Secrets/IPR/Non Solicitation etc?
The compnay has made us sign certian documents in which one is that we will adhere to the company policies.

 
Which company is appointing you now; the one that has acquired the project or some other?

The one who has acquired the project.

 

Apparently you shall be leaving the company that has employed you and joining other company and the oter company shall be seconding/deputing you to work with the same client/location/office!
Right now I am working from Noida location and new company will also put me to Noida only while Cleint is located at US.

Indian courts of law have consistently been declining to enforce Non Compete Clauses/agreements as it hits right to earn livelihood and clauses of Indian Contracts Act.
Does this means I can join?

 

Thanks.

 

 

Kumar Doab (FIN)     28 January 2016

As far as NOn Compete is concerned apparently you can not be prevented from earning your source of livelihood.

Other is that you are leaving one employer (that had the option of deputing you to its clients) and joining next employer (that has the option of deputing you to its clients).

 

Therefor if the next employer chooses you to depute to the same client that was earlier a client of previous employer, then it is not your doing and you are not employed by the client.

You may avoid to get trapped by Non Solicitation, Non Disclosure, and other policies of the company and leave no trace/record that can link you  with these.

 

 

This is the first hand impression.

 

The detailed opinion can be given by the able counsel that has examined all docs and communications on record...........................including but not limited to previous employer but also the job advt/job application-resume-vitae/interview call letter/selction letter/offer letter etc of next employer.

 

It shall be worth and appropriate for you to consult an able counsel.

 

Are you a member of employee's/IT employee's/trade unions?

 

 

Kumar Doab (FIN)     21 July 2016

@ Atulit,

In many threads you have been asked to contribute in the threads and avoid advertising in the threads/websites/discussions.

Don't you have any contribution to make in the threads?


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register