Legal Action On An Employee Joining S Competitor Company [Thread 523533] - CiteHR
Bijay_majumdar
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NK SUNDARAM
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Riteshmaity
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Sushilkluthra@gmail.com
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I have a query regarding an employee joining a competitor company after quitting his current job. One of my friend has resigned from his current employer. His manager is threatening him that if he quite & joins the competitor company, legal case will be filed against him & his career will be spoiled. Is there any possibility of such a situation arising. Can a legal case be filed against him for joining a competitor firm?
Did the job contract with earlier company have any such written agreement about joining competitors?
There is no such clause in the offer letter that was given or any bond/ contract was executed during employment. However, the general mention of secrecy & confidential information is there which states that no trade secret & confidential information shall be shared while being in employment as well as after qutting.
Reference may be made to VFS global solutions v Suprit Roy decided in 2007 by Bombay HC in which non compete clause regarding joining competitor after quitting was held to be void as in contravention of section 27 of Contract Act but injunction was granted as regards disclosure of trade secrets.
Thanks
Sushil

Is he at a COO or VP level. From your mail, I dont think he is. There are many court judegments in India and abroad which have very clearly stated that at operating level, an employee does not have access to strategy. They can put any clause. But that has to sustain the test of law. Please go through the forum posts, where we have posted the cases of Titan, HP, Adidas etc and where the courts were very clear that the company cannot restrain its employee from joining the competition on flimsy grounds. Secondly, even if they do, they need to be compensated adequately for the cooling off period. There has to be a time frame mentioned as to how long he must refrain from joining thew competition. In case they say the cooling off period is two years, then, the company has to compensate him for a period of two years.And this is only applicable to those holding strategic roles. Not for those who are in operating roles. So, tell your friend, not to get psyched by what his manager says. He can go and join the competition. If required, go through the posts here on not joining the competition and quote those case studies to the manager.
Nothing is going to happen unless and untill any unethical activity is done by your friend.Usually non disclosure agreement has such clauses. One should have proper relieving and transparent dealings in transit phases, so that problems in employment does not arise.
Dear SVA 2015,

There's no need to worry.

Let me tell you some thing very important of this era.

Some employer donot want an employee to join any other organization especially competitors.

For this purpose, they offer a plan called "Stay Period" which may be 1 month upto several years after resignation from organization

BUT

In this case employer will pay you full salary during your stay at home for a defined period after you can join any organization as per

your will.

During stay period, employer want to obselete the knowledge, skill you acquired during employement with him.

During stay period your can not work with compititor or any organization doing same type of business and you get full salary from

previous organization during stay period.

However you can join any other organization with different type of business after in written permission from previous organization but

stay salary will be no longer available to you.

Now in your case, as your friend contract with the employer does not contains such clause - thus no worry.

The employer can not do any thing unless he have proofs that you disclose his business secrets with the competitors.

Regards

Ziad Hussain

Dear SVA2015,

Is there a HR department in your compnay? If yes, the manager cannot directly discuss these points with the employee.

There might be a case that this is just the ego of the manager not to let go the employee, hence he is being difficult. Check if this is the case?

If HR also takes the same stand with your friend, then ask your friend to write a formal letter to HR that as per the clauses mentioned in his appointment letter & subsequent applicable policies, he is not restricted from choosing his own will of next job. In case the existing compnay wants to pursue legally, then it would be unfortunate but he would have to respond accordingly.

Though, he should be ready to sign any non-discolosure agreement with the current employer, if asked by the HR. Ask him to mention this point in his letter as well.

In any case, the professionals have contacts throughout the industry. If your friend is joining to competitor, then surely someone from your company would have influencial contacts there. If he leaves at a bad note, then it may harm his first impression at the next job through bad references. So, ask him to handle this matter professionally & not to take things personally.

Best Regards,

Amod.

Don’t worry, nothing adverse going to happen. This type of cases cannot withstand the test of law.
Everyday we are reading in news papers that very senior employees are shifting one job to another from one company to another. Apple to Microsoft, Microsoft to Infosys, Infosys to wipro.... What will happen to them ? Will those people be chargesheeted ??? The threats are just rhetorics... has no meaning at all. Even then, there will be a cooling or break period while joining a competitor. During my career, I have relieved lot of employees who joined our competitor. We never took any action against those people. India is a free country and anybody can practice or work in any company....

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