I have an NDA signed with the present organization which states that I can't join companies with a similar nature of business or products for the next 15 years. Since this NDA was enforced to be signed by the employees, there was no option but to sign it as we were released from the previous employment fully.
Is it legally valid to prohibit employees from joining a similar product company?
For instance, a person from Ford Motors cannot join either Hyundai or Nissan Motors and has to join an irrelevant industry?
From India, Chennai
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Is it legally valid to prohibit employees from joining a similar product company?
For instance, a person from Ford Motors cannot join either Hyundai or Nissan Motors and has to join an irrelevant industry?
From India, Chennai
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Unreasonable Non-Compete Clause
The period of 15 years for a non-compete clause is really unreasonable and onerous. Such a clause will not be upheld by the courts. Indeed, there is a Delhi High Court judgment in M/S STELLAR INFORMATION TECHNOLOGY PRIVATE LTD versus MR RAKESH KUMAR & ORS decided on 29.08.2016, which clearly sums up the law on the subject. In fact, it will be impossible for any employer to keep track of its employees for the next 15 years after the termination of service.
From India, Mumbai
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1593The period of 15 years for a non-compete clause is really unreasonable and onerous. Such a clause will not be upheld by the courts. Indeed, there is a Delhi High Court judgment in M/S STELLAR INFORMATION TECHNOLOGY PRIVATE LTD versus MR RAKESH KUMAR & ORS decided on 29.08.2016, which clearly sums up the law on the subject. In fact, it will be impossible for any employer to keep track of its employees for the next 15 years after the termination of service.
From India, Mumbai
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Validity of Non-Disclosure and Non-Compete Agreements in India
In the Indian context, we cannot precisely say that a Non-Disclosure Agreement or Non-Compete Agreement between an employer and an employee is completely invalid as it is violative of Section 27 of the Indian Contract Act, 1872. Many factors like the position held by the employee, the amount of time and money invested by the employer to impart specialized training to the employee, the length of time, and the extent of geographical limits in which the employee can hire out their services to similar industries or start their own venture of a similar or the same business after separation have to be considered in this regard.
However, I agree with Mr. KK!HR that a 15-year ban on reemployment in a similar industry is too long a period, and it can raise the question of adequate compensation by the employer commensurate with the length of the ban.
From India, Salem
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In the Indian context, we cannot precisely say that a Non-Disclosure Agreement or Non-Compete Agreement between an employer and an employee is completely invalid as it is violative of Section 27 of the Indian Contract Act, 1872. Many factors like the position held by the employee, the amount of time and money invested by the employer to impart specialized training to the employee, the length of time, and the extent of geographical limits in which the employee can hire out their services to similar industries or start their own venture of a similar or the same business after separation have to be considered in this regard.
However, I agree with Mr. KK!HR that a 15-year ban on reemployment in a similar industry is too long a period, and it can raise the question of adequate compensation by the employer commensurate with the length of the ban.
From India, Salem
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Non-compete clause in service contracts.pdf
Non-compete Clause of Infy.jpg
Employee agreement.doc