Non Disclosure Agreement & Not Joining Competitor

Dear all,

One of my friends was working in a private organization as an 'R&D Manager'. About a year ago, he resigned from his company due to personal issues. Upon resigning, he signed a bond on notarized stamp paper stating that he would not leak or disclose any confidential information about the company, its products, and that he would not join a competitor. He signed the bond under pressure to receive his dues. Subsequently, he started his own consultancy where he is supporting a company that is not a competitor but is developing similar products using different technology. The new company is not selling the product but promoting their parts within it.

Now, the previous company has issued him a notice alleging that he leaked information and they intend to take legal action against him, either in criminal or civil court proceedings.

Are there any limitations on an individual conducting business after signing such a bond? I would appreciate any suggestions.

An agreement signed while in service will cease to exist when he leaves the establishment. Moreover, an agreement restraining one from joining a competitor will not be maintainable. Certainly, every employee (employee means a person in the service) is expected to maintain secrecy of business being transacted by the company for which there is no need for any notarized agreement.

Now your friend is out of the organization. Imposing the same responsibility even after quitting the company would not be justified.

Regards,
Madhu.T.K

Agree with Madhu, both contracts are not maintainable once you leave the organization. The agreements themselves have loopholes; mostly, these contracts are signed at the time of joining the organization, not at the time of exit.

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Overall, the corrections made include:

- Improved punctuation and capitalization.
- Corrected spelling errors like "maintainable" instead of "maintainable," "singed" instead of "signed."
- Ensured proper paragraph formatting with a single line break between paragraphs.

Dear Sir/Madam,

Thank you for the reply. I am attaching the Agreement copy and notice provided for your reference. I have removed the image of the stamp paper, names, signatures, and addresses from the attachments.

The agreement does not specify any confidential information and is of a general nature. Additionally, the company is not the exclusive manufacturer of the products they produce. Therefore, can the company issue such notices?

Within what time limit should notices be replied to?

Regards, Megha.