Is It Fair for My Former Employer to Demand a Blank Check and Non-Compete Bond?

I served my notice period with my last company. It was a 3-month notice, and the company provided me with my relieving letter on my last working day. However, now when I need to collect my final settlement amount, the company has asked me to come with a blank check to submit and also sign a bond or agreement not to join any competition. Please suggest. This company has around 200 employees and does not have PF for its employees; however, they are strong in the legal department. I worked as an operations manager.

I am very confused and wonder how any company can play with our careers in such a way just with its money. There are so many people who want jobs, but because of this dictatorship, they are suffering. I really need a smart solution.

Thanks,
Raj

Also, I was thinking of submitting the check and then making a stop payment and just signing the agreement as discussed in your forums. One of the members claimed that nothing can be done, and anyone can join any company. Please let me know if this is feasible.

Regards,
Raj

Based on what you mentioned, it seems that the Non-Compete clause was informed to you ONLY at the time of F&F, and NOT while you were working there. IF correct, then you don't have to worry—since you will be bound by what's mentioned in the Appointment Letter when you initially joined this Company.

The options open to you also depend on how much amount is involved in the F&F—IF it's not very high, the best option is to ignore it and move forward. You would save any hassles and can focus on your career since you would have already received your Relieving and Experience Letters.

However, IF the amount involved is high, I suggest putting things in writing—obviously, the Company wouldn't initiate it from their end. But YOU could ask for them to email the Agreement Format to you—to enable you to review it before signing. The more interaction you put in writing, the better. Whether you will use it or not ISN'T the point. But IF AT ALL you need any evidence of this interaction later, you surely won't get it at that point in time.

Hope you get the point. Then you can go ahead and implement what you mentioned. Legally, you can always take the stand—IF it does go legal—that you were coerced into signing it.

All the Best.

Regards

Hello Raj, it's not an issue. It would have been better if you had purchased the 3-month period after adjusting your Privilege Leave. Now that you have already completed your three months' notice, there is no issue, and there is no need to sign any bond or agreement for not joining any competitor. The only requirement is not to disclose any details from your old company to the new company if you had signed a non-disclosure agreement with your old company.

Regards,
Sanjeet

Please do not give any blank check. As you have not provided any indication of the amount owed by the company, please follow the advice given by TS.

As Taj Sateesh has rightly said, if the FNF amount is meager, then it is advisable to forgo and pursue your career ahead without any hassles. If the FNF amount is huge, as other seniors advised, there is no need to give a blank cheque or sign the agreement. Instead, send a letter claiming the FNF. If they respond, inform the forum to give you an appropriate response. You can also claim your settlement legally if it is affordable.

Options for Handling Final Settlement

You have two options: (1) the amount is small, and (2) the amount is big.

If the amount of F&F is small, do not sign any agreement or give any blank cheque, and be prepared for losing this money. At the same time, keep your efforts of recovering monies on by reminding them weekly, by all means of communication—phones, emails, letters—and mark cc to the labour inspector, factory inspector, company's Directors, etc. (Actually, do not send these CCs; it should appear only on originals, cc to:…). Do this exercise continuously for two months, three months, and so on. At one point, your HR will get fed up, and looking at the smaller amount, to avoid nuisance, they will make payment.

If the amount is big and the company is insisting on an agreement as well as a cheque, try to remember your past working days with them. You must have seen during your tenure with them whether they are really serious and particular about compelling this kind of documentation, and unless the same is done, they do not make F&F of employees (though this is illegal). If at all, the answer is YES, you do not have any option but to fight legally and get your monies.

My suggestion is to think of the proper order in which you should move ahead. Do not think to give a first legal fight and then recover money. This situation will make you pay heavy amounts from your own pocket towards legal expenses, and also tremendous tension about whether you will be winning or not.

Think the other way… Get the money first and then go for a legal battle. Sign the Agreement, give them the cheque. Get your monies cashed to your account (which we presume is a big amount… say 1 lac, etc.), and then you yourself send them a lawyer's notice that the Agreement signed by you was not willful and also without knowing the contents of the same, and of course, which is illegal by our Constitutional rights. Make an immediate stop payment of your cheque. And then relax, not totally, but to a great extent.

Here the money is already in your pocket, and out of the same kitty, some portion, say 10%, you keep aside for court matters, that too if the company really decides to harass you. And the remaining money you can enjoy as per your wish. (In the first option above, or otherwise, we had decided to forgo the F&F if the amount is small. Now the same small amount, you are spending on your Lawyer).

Another situation, since we presumed the F&F amount is big, say about a Lac, keep this money directly in a Bank's fixed deposit, and on the interest earned from the said FD (It will be about 10000/annum), you will be able to pay your lawyer's fees. In a worst-case scenario, if you lose the case, you may have to pay some penalties to your company, and your Bank FD will take care of it.