Bond prohibiting employees from working for Competitors

Hello,

Can anyone please help me out with the bond format prohibiting employees from working for competitors for 2 years after being relieved or terminated from the company?

Hi Prashanthi,

The name for that bond or agreement is "Non-Disclosure Agreement." You may search in CITEHR or Google, and you will get different formats. The Non-Disclosure Agreement is a legal contract between two parties (employer and employee) restricting the employee from joining a competitor company after resignation for a stipulated period, not poaching current employees, and not sharing company client/project secrets with a competitor company.

If you want to prohibit your ex-employee from working for your competitors, it means all employers in a similar business to yours will be your competitors. So, if you prohibit this in the form of a bond/agreement, they will work for their survival. What is your view on this?

Dear Sir,

Thank you so much for the email. Regarding prohibiting my ex-employees from working for my competitors, I will provide you with my explanation. We are from a 21-year-old company where we have not implemented any bonds for our employees all these years. We provide good training to our employees and also give significant annual salary hikes. The reason we are considering implementing a bond is that we have encountered situations where some employees receive training from us and then move to competitors for higher salaries. While we have a few loyal employees who remain with us, most tend to leave after receiving training once they find better opportunities elsewhere. We do not wish to hinder anyone's growth, but we believe there should be some level of commitment from employees towards the company. By imposing this bond, we hope to retain employees and discourage them from moving to competitors.

Regards,
Prasanthi

Hi Prasanthi,

I can understand the background. If you are hiring freshers and imparting training, please introduce a Training Agreement for 2 or 3 years as per your requirement. An NDA can be implemented, but it is for experienced employees to sign at the time of joining. Binding employees through agreements/bonds is a temporary solution. The long-term solution for this will be to analyze the reasons for the exit of employees. It is not that all are leaving only for money. There might be some other hidden factors of which you may not be aware.

Please introduce an Exit Interview process if not already introduced. Ensure a congenial work environment and base annual appraisals on performance. Project long-term stability of your company to your employees and conduct regular one-on-one sessions for all employees. You may likely see some changes in the attrition rate in the near future.

Thank you so much for your valuable suggestions, sir.

Regards,
Prasanthi
HR Executive