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aaryan (Manager)     24 April 2014

Non solicitation clause

Hi All, Need advice and understanding on below clause of Non solicitation :

Currently i am working as procurement manager with US MNC in India and in my appointment letter which was on the companies letter head which I had signed during joing the company , One of the clause is bothering me as I am planning to join a company as employee which is the customer of existing company , Wanted to understand does this clause stops me from joining the customer to the existing company.

Below is mention in clause :

Non Solicitation:

You will not for a period of of either (i) two years after superannuation or (ii)two years after the employment is terminated for any reason by either party , whichever is later ,Solicit or attempt to solicit any employee , consultant ,customer,individual or entity having a business relationship with the company , whether as an employee , consultant customer or otherwise to terminate or cease such relationship . You further agree that the prohibitions contained in this clause are reasonable as to time , scope of activity and otherwise , and do not impost a restriction greater than is necessary to protect the business interests of the company.

Please advice does above clause stops me from joining the company customer company ? Can I accept the employement of customer company ? If I do so can my existing company take any legal actions against me ?

Will be grateful to get your expert advices on above topic .

Thanks for the replies....



Learning

 3 Replies

Kumar Doab (FIN)     24 April 2014

You will not ask the customer to terminate business relationship with company. The time set is 2Y.

It has become a trend in multinationals to insert such clauses. However in India the jurisdiction is Indian courts of law and view taken by Indian courts is not as per US courts. Many Indian companies are also inserting such clauses.

This is not NON Compete Clause.

Indian Courts have consistently been declining to impose such clauses/agreements/covenants.

However you may meet a competent and experienced labor consultant/service lawyer in person and proceed under expert advice of your lawyer.

The service conditions can be negotiated by employee, employees unions, trade unions……………….

 

Since majority of the companies are inserting such clauses it shall be appropriate for the employees to unite and form unions and negotiate service conditions and protest to prevent service conditions that are detrimental to the interest of employees.

1 Like

aaryan (Manager)     24 April 2014

Hi Kumar thanks for the reply , But I didnt understood this clause does it says I cant join the company which is customer to existing company ?

Kumar Doab (FIN)     24 April 2014

Non Solicitation and Non Compete are different.

Non Compete clauses/agreements may very well operate during term of employment.

Indian Courts have consistently been declining to impose Non Compete clauses/agreements/covenants, post termination of employment.

However don't proceed on your own and meet a competent and experienced labor consultant/service lawyer in person, show all docs on record  and proceed under expert advice of your lawyer. The lawyer that has seen all docs can advise you the best.  

 

 


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