Navigating Employee Resignations: Can You Prevent Them from Joining Competitors?

Dear Members,

Could you please suggest what an organization can do if an employee has resigned and is joining a competitor? Please reply with practical and logical answers.

I have received a few responses suggesting that an employee can be sued in such a case since it is stated in the employee handbook (HR Policy) that no employee can join a competitor within 2 years of resignation.

Scenario in a Pharmaceutical KPO

My question pertains to my organization, which is a pharmaceutical KPO. All employees hold M.Pharm degrees, so if they join another company, it is likely to be a competitor engaged in similar work.

In such scenarios, it is evident that an employee will join a similar organization rather than staying idle for 2 years. I do not believe they should be restricted from joining a similar company.

Moreover, if an employee chooses not to disclose their new organization to their current employer and provides alternative personal reasons for resigning, and the current employer later discovers that the employee lied and is joining another company (potentially a competitor), can the current company terminate the employee for breaching trust or being dishonest?

Your suggestions and comments would be greatly appreciated.

Thank you.

Or can the current company force the employee to tell them which company they are joining?

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Or, can the current company force the employee to disclose the name of the company they will be joining?

Confidentiality Agreements and Employee Movement

Some companies ensure that their employees do not join their competitors by getting them to sign a Confidentiality Agreement, which binds them as per the terms and conditions stipulated therein.

In such cases, an employee leaving their current employer and joining a competitor may find trouble brewing if the Confidentiality Agreement so stipulates. They may even face legal action by the company, which they may try to defend in a Court of Law.

Yes, I agree with Mr. Khola that the current employer cannot force an employee who has submitted their resignation to reveal the name of the company they are planning to join. The employee is within their lawful rights to state personal reasons for leaving the company and later joining another company. Non-disclosure of the name of a prospective employer does not amount to a breach of trust.

Best Wishes,
Vasant Nair

An employee can join a similar firm, but the question is whether the employer is going to hire an employee from a competitor firm or not. There are several people who have done this earlier and had no problems with their last employer. However, there is a clause in the contract of an employee that states he/she can't join a similar firm for a particular time, but there is no specific time frame mentioned, such as 6 months or 2 years.

If an employee does not wish to inform their current organization about their new job, they can provide several reasons for their resignation, stating that they will no longer be serving the present organization. However, as an employee, they have to submit their relieving certificate to the new organization and provide references from their past employment, which could create a problem. But I don't think the company will dismiss you, especially when they need people from their competitors.

Secondly, there are several industries that do not hire people from competitor firms, and I have also experienced this in the past. By the grace of GOD, I have had no problems with my current employment.

Regards