is employment agreement and bonding an employee valid in the court of law?

mitali95 · #1 08-12-2008, 02:37 PM

Dear All,

We have a non- compete and non- disclosure agreement in our company which says that the employee will not join any of our company competitor or similar business for 5 years after leaving our company( for any reason)
In the lieu of the above the employee also has to submit an undated cheque or 6 months gross salary in the name of the company, so that in case the employee violates the agreement, company can use this cheque to cover losses.

do you think this is valid?? will such a thing stand in the court of law.. please advise.

Regards

Mitali

Madhu.T.K · #2 08-12-2008, 03:58 PM

It is not a valid agreement. You cannot prevent one from working with any another person. Certainly, you can say not to work for your competitors so long as he is with you. After his leaving you cannot.

If the cheque is presented and later on bounced, will you be able to recover the sum? You cannot proceed against the employee (drawer of the cheque) u/s 138 of the Negotiable Instruments Act because a holder of a negotiable instrument(cheque) is expected to get it after "a lawful consideration" so as to be called a holder in due course. What consideration would you show as given by the employer in return for the cheque received? Nothing.

Regards,

Madhu.T.K

radesanster · #3 30-10-2009, 09:42 PM

what about overseas travel agreement signed by an employee going abroad? the bond is signed in Rs20 stamp paper in india .and the clauses states that one needs to work for 12 months after returning to india or else pay max to $ 5000 . Is this valid ?

Madhu.T.K · #4 02-11-2009, 07:25 PM

If the employee is going abroad for a training which costs to the employer $ 5000, then the bond will be maintainable, otherwise not valid.

Regards,

Madhu.T.K

radesanster · #5 03-11-2009, 06:48 PM

Thanks for your reply sir.

The company projects it and names it as "On the job training" but i certainly work here. and have been working in US for 1.5 years. The company pays for room rent, fuel , and rental car . basically the company takes care of my stay here but no salary in US dollars.

So no specific training that directly costs $ 5000 USD .

If i quit , what are my chances of getting away without paying such huge amt ?

appreciate your help .

P.S: Sorry for hijacking mitali95 thread.....but i hope this infor helps you as well.

Madhu.T.K · #6 04-11-2009, 09:29 PM

If the company has taken care of your stay in the USA and salary is paid in India, then it means that you under went your 'training' at the cost of the company. The company seems to have taken concern over you and had invested money to train you. If so, why don't you remain with the company at least for the stipulated period? If you have become much equipped to take up a better employment, can't it be considered as gained after the training given by the company? These are some of the questions to which you have to find answers before proceeding against the company. Think and act.

Regards,

Madhu.T.K