Response

Please share the offer letter you received so that we can assist you. Before you join another firm, such as a client’s, you must quit. 1)Any agreement under restriction of commerce is invalid under section 27 of the Indian Contract Act.

2) If your resignation is accepted, you might accept the job offer from the Indian division of a US corporation.

3)Article 19(1)(g) of the Indian Constitution allows an individual to pursue any profession, career, or trade of his choosing. Negative covenants that restrict the employee beyond the duration of employment are generally regarded unreasonable, although there are certain exceptions. Confidential information and non-solicitation agreements are two exceptions. Non-compete provisions are usually not enforced by Indian courts since they hinder business and trade, although they may be enforced in rare situations. To understand the significance of the non-compete provision in the context of the other clauses in the agreement, it must be read thoroughly. The employer has the right to initiate a lawsuit to prevent you from working with this customer.Furthermore, it may seek compensation from you for infringing the provision, which you might challenge in court.

So, my issue is, can my existing company take legal action against me if I accept an employment offer from an Indian branch that isn’t even our client?

Before starting employment, certain businesses may compel prospective employees to sign non-competition agreements, which normally take effect after the employer-employee relationship has ended. Non-competition agreements may be required by employers for a variety of reasons, including the preservation of trade secrets or goodwill. Non-competition agreements, on the other hand, are often disapproved by courts as restrictions on a former employee’s ability to make a living. Non-competition agreements are therefore thoroughly investigated in the judicial system when they become the subject of a legal dispute.

Non-competition agreements must typically be backed up by legitimate consideration: the employee must get something of value in return for agreeing not to compete. If an employee signs a non-compete agreement before starting work, the commitment not to compete will be adequate payment for the pledge not to compete. If an employee enters a non-competition agreement after starting work, the simple promise of ongoing employment will not be deemed sufficient consideration. In this scenario, the employee must be compensated in some way for his or her pledge. A promotion or other extra reward that was not included in the initial employment agreement might be considered additional compensation. Employers have the right to maintain their customer connections and sensitive information, but former workers have the right to work. These interests must be balanced when the employer and the employee have signed a non-competition agreement.

Reference: section 27 of indian contract act – – AHG221 – 202100581 – 120 – 90 – 202100702021004260

LAWAYZ-2023-962