Dear All,
Need your opinion on how legally valid and enforceable below clause inserted in employment agreement is. I am planning to earn my living through offering service or being employed as I am no longer employed as they cited lack of business for continuation of contract.
Below is the clause in the contract which restricts the employee from being employed, self-employed, partner, collaborate, advise, or consult in the area of business which is similar to the organization. Please advise
Employee hereby agrees and undertakes that he shall not at any time during employment and for a period of three (3) years after the termination for any reason whatsoever undertake or carry on either long or in partnership or in collaboration, nor be employed directly or indirectly in any capacity whatsoever in India in any manufacture/service which is of same kind and nature as to business and manufacturing carried on by this company or any of its associate companies or firms or concerns to which his services may be transferred or in the manufacture of any products, articles, or things for which this company or such other company or firm or concern to which his services may be transferred or in the manufacture of any products, articles of things for which this company or such other company or firm or concern may have experimented in and/or have prepared designs for the manufacture of such products or have made preparations for the manufacture of such products irrespective of such products or have made preparations for the manufactured or not during the said period shall not lend his assistance for such service in any form or manner whatsoever whether as consultant or advisor or as employee in any other capacity or manner whatsoever.
From India, Bangalore
Need your opinion on how legally valid and enforceable below clause inserted in employment agreement is. I am planning to earn my living through offering service or being employed as I am no longer employed as they cited lack of business for continuation of contract.
Below is the clause in the contract which restricts the employee from being employed, self-employed, partner, collaborate, advise, or consult in the area of business which is similar to the organization. Please advise
Employee hereby agrees and undertakes that he shall not at any time during employment and for a period of three (3) years after the termination for any reason whatsoever undertake or carry on either long or in partnership or in collaboration, nor be employed directly or indirectly in any capacity whatsoever in India in any manufacture/service which is of same kind and nature as to business and manufacturing carried on by this company or any of its associate companies or firms or concerns to which his services may be transferred or in the manufacture of any products, articles, or things for which this company or such other company or firm or concern to which his services may be transferred or in the manufacture of any products, articles of things for which this company or such other company or firm or concern may have experimented in and/or have prepared designs for the manufacture of such products or have made preparations for the manufacture of such products irrespective of such products or have made preparations for the manufactured or not during the said period shall not lend his assistance for such service in any form or manner whatsoever whether as consultant or advisor or as employee in any other capacity or manner whatsoever.
From India, Bangalore
This is kind of a monopolized trade agreement. I am not finding this as fair.
However as the employment terms is primarily considered as a contract between employee and employer, you have to examine the sanctity of this with a contract expert or a legal professional.
From India, Bangalore
192However as the employment terms is primarily considered as a contract between employee and employer, you have to examine the sanctity of this with a contract expert or a legal professional.
From India, Bangalore
How can anybody bind after the termination of the contract? This type of contract is invalid in legal scenario. Whoever wants this kind of agreement to be signed cannot be fruitful in the purpose.
From India, Hyderabad
From India, Hyderabad
Dear Sir, As per Contract law, two consulting adults of sound mind can make a valid, enforceable agreement on anything which is not illegal as such. A clause prohibiting future employment in a competitive firm is not illegal per se. The clause may sound unjust or harsh or one-sided but that does not render it illegal in the eyes of law. Protection of Intellectual Property or trade secrets are the rights of a firm and this is definitely a way to ensure this. How this agreement can be enforced is to be bothered by the firm, though not a very easy task.
From India, Mumbai
From India, Mumbai
Dear Friend,
Companies thrive on one key principle, "Fear Is The Key" they know that the poor employee will get scared with these unfair business tactics. Companies know that one single employee will not have guts and capacty to fight the might of a Corporate who has all the resources at there disposal.
Restrictive clause are product of such perverted thinking. Though such practices are illegal as in some cases courts have held it to be unfair and illegal.
Unless the specific instances are clearly and outlined with the logical reasoning, its illegal and unenforceable.
Motherhood statements of restriction are void ab initio.
The employee learns some thing new with every job, if every employer starts putting such restrictions there will be chaos. These restrictions violate right of employee to learn and exercise the acquired skill freely. Incompetent companies are scared of competition enforce such restrictions so that the employees are prevented from joining competition
I am personally against any such restriction.
Warm regards
Bharat Gera
HR Consultant
From India, Thane
Companies thrive on one key principle, "Fear Is The Key" they know that the poor employee will get scared with these unfair business tactics. Companies know that one single employee will not have guts and capacty to fight the might of a Corporate who has all the resources at there disposal.
Restrictive clause are product of such perverted thinking. Though such practices are illegal as in some cases courts have held it to be unfair and illegal.
Unless the specific instances are clearly and outlined with the logical reasoning, its illegal and unenforceable.
Motherhood statements of restriction are void ab initio.
The employee learns some thing new with every job, if every employer starts putting such restrictions there will be chaos. These restrictions violate right of employee to learn and exercise the acquired skill freely. Incompetent companies are scared of competition enforce such restrictions so that the employees are prevented from joining competition
I am personally against any such restriction.
Warm regards
Bharat Gera
HR Consultant
From India, Thane
I agree with Mr.Bharat and moreover an employee who is working has to be attracted to work for a longer term in the organization with better conditions and pay. This will definitely motivate him to come back even after his voluntary exit.
Management should be made known by HR about this kind of policy and employment terms,instead of these absurd terms in employment clause.
From India, Hyderabad
Management should be made known by HR about this kind of policy and employment terms,instead of these absurd terms in employment clause.
From India, Hyderabad
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