Can I Join a Competitor After Signing a Non-Compete Agreement? Legal Concerns Explained

Hello All, Please help me understand a policy of a company, wherein if an employee resigns and signs with the company that he or she won't work with its competitor companies for a year, and then gets an offer of a job from a similar working company, can he or she join? Is he or she bound by the signing policy of the previous company he or she left? Does this raise any legal issues for companies if you choose to work for another company before one year?

Please reply as soon as possible.

Thank you,

Dhruti

Understanding Non-Compete and Non-Declaration Agreements

Non-Compete and Non-Declaration Agreements are time-bound, as you have already noticed. Companies in a similar domain, yet not mentioned in the agreement, do not fall into the category unless there is a broad description for non-competing firms. Are you joining them for similar skill sets, serving similar roles? Will your role require you to share information marked vital in the agreement? Would you be working with the clients of your ex-employer in your new role?

Can you consider sharing the clause from the agreement for us to find a clearer view? For example, if you are working with KPMG, you can't join EY.

On the other hand, suppose you have worked with Dell BPO as a customer care executive after a Polytechnic course and you complete an engineering degree along with MS certifications. You are free to join Microsoft or HP as a programmer or developer.

Trust this helps! Looking forward to hearing from you.

First, could you please clarify the type of agreement you have signed with the company? If you have not signed any agreement, or if the agreement was signed without legal papers and is deemed null and void, then you are not obligated to adhere to the company's policies.

Validation of Signed Documents

In the event that you have signed any such documents, it is crucial that this policy be validated by the Labour department in accordance with the company's standing orders. Therefore, there is no need to worry, but it is important to understand the specifics of the agreement you have entered into with the company.

Thank you.

Dear Cite Contribution and Raj,

Thank you very much for such a prompt reply. It has nothing to do with me; I am pursuing my MBA in HR. However, one of my friends needed help regarding this non-compete agreement. I am not sure about the exact details of the agreement he has signed, but the sector of his work area remains the same, and probably the job profile would have been similar too (related to the automobile industry and an engineering post). Even though I understand ethically it should not be done, he is planning to refrain from accepting another job offer from a competitor company in the same sector, as the agreement includes a 1-year clause prohibiting him from joining after leaving.

In my HR field, I am also learning about company policies, and this site is proving to be very helpful. I hope to receive such wonderful support from you guys in understanding the field of HR more.

Regards and HAPPY DIWALI :)

As (Cite Contribution) mentioned, a lot would depend on the 'wordings' used in the agreements. Please check with your friend and share the 'verbatim' wording of the clauses from the agreement. That would enable the members to guide you better and more accurately.

However, in general, most companies nowadays have begun to use 'generic' wordings to ensure they cover all situations and possibilities. This would obviously make things much tougher for an employee to switch jobs.

Given today's global corporate scenario, such agreements are in vogue, and there's no way to avoid them.

Regards,
TS