Employee Joins Competitor With Same Job Profile

Dear yogita
you can't put legally such a clause. If you put such clasue of baaring an employee to seek employment from competitors, courts will not entertain. It reminds me of a court case where one of financial compny executive have joined the competitor. the first employer filed a case in the court saying that the resigned employee has knowledge of his customers and various accounts of his customers and sought the court to bar the employee to take employement from his competitor. However court has dismissed the plea stating that an employee can join any employer as per his wish.
The second aspect is regarding data theft , you can file complaint with police regarding the same if you have concrete evidence of theft of such data.
regards
ravi

Section 27 of Indian Contract Act, 1872 clearly states this principle; “Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, to that extent, is void.”
Employment agreements can only restrict an employees' activities during the tenure of their employment. Thus rules prohibiting part-time work (moonlighting) are upholdable, but any restraint purporting to be effective after the termination / retirement is invalid in the eyes of the law. There is ample case law upholding the right of an employee to pretty much do what he/she wants after leaving his current employer. So one-sided appointment letters, bonds, or whatever are pretty much useless pieces of scrap paper when presented in court.
Proving male-fide intent of the employee in joining a competitive concern is very, very difficult; so good luck with that.
Hope that helps.

Dear yogita
if employee has not right to join any comp. company after resignation. then
is the right of employeer to join new candidate for same post.
i think your comp. apponited letter is one sided, have your comp. mention they are also not joined any one after her regisnation for same post.
regards
nimesh

yogita...... by tring to punish the employee who has already left you will be sending a wrong signal spiralling across the orgn culture......its an orgn not a jail....... mk sure the leaving formalities r complied with...
i read someone commenting "yeh india hai, yaha rules regulations follow nahi hota hai".....thts really nt a professional way to go about...
kane

Dear Yogitha,
Most of the agreements employees are made to sign when they join a company have been invariably found unilateral.
Such agreements generally fail in terms of bonafide when it come to court cases.
I think there is hardly anything that can be done to undone the damage.
As a preventive measure you can:
1. Track the mails of employees working on sensitive data. (As already suggested by Ravi)
2. Carry out surprise checks of the pen drives used by the employees. (You can impose some fine, or take other punitive action)
3. But the most important thing is to develop a positive mentoring with a focus on building trust and loyalty. (The toughest thing to do....ha ha..)

Dear Yogita,

By writing wrong conditions in your organization’s appointment letter, don’t show the weakness that you are feeling scared for coming into the fair competition. This is market. It happens and it’s traditional.

Just think if your organization is selling Robots, would you appoint any personnel, who have an experience in selling lingerie’s. No!!! The CV will go directly in dustbin. But you will highly consider the personnel from your own trade, from some of your competitor.

What is more important is to design good policies so that candidates don’t leave organization and maintain the name and quality of your product in market.

At last I would like to suggest you to forget it and delete the said condition from your organization’s appointment letter.

Regards,

Farhat Parveen
Falah Recruitment Consultants
Cell : 9811224748
Mail : [Login to view]

“Express yourself through your work”

Hi Yogita,

These are the common thing which are preveling across the globe these days with all sectors. I work with an IT company and we are have our own products with the copyright. We have NDA(Non Disclosure Agreement) which we get it signed from each employee whosoever is joining our company and this paper they sign it on Rs. 100 stamp paper where it is mentioned whatever work they do with our organization and our customer databse they can not share and use the same thing with the competitor's company in future if they join any competitior company.

We recently had a similar case wherein one of our employee has joined a competitor's company and he has used our customer databse for converting our curtomer to their customer. We came to know about this what we have done we have informed this thing to our ex employee we have made him aware of this fact and we have proved also that he has used our database. At the same time we have also filed a case against that employee and his current employer. And he is still suffering from that stuff because now he has a case against him which is not good for his career and his current company has also warned him because they are MNC and they do not get involved in such legal crime affairs.

I do not agree with Ashok and Ravi that legal papers do not work in india , it does work if it is done in a right way. We all agree that we all use our past experiences or data in our current job but it should not harm the ex company with whom you have worked. Implementing the HR policy is fine because it is not having direct impact on business which ultimately everyone does but using customer database which has direct impact on business is wrong thing to do which one should not do.

Yogita i would suggest you to talk to your ex employee make him aware of the situation and tell him if he keep ion doing such things you will file a case against him, this communication itself will resolve your problem. Even after this communication if he continue to use your database you can actually file a legal case against him, he would be in real trouble and his carrer can be at sake. Which i am sure he would not like to do. Your company can fight a case but for him it would be dificult to fight a case and if this happens his current job would be in trouble as well as his career would be in big trouble.

I hope this post will help you.

Regards,
Surendra

Hi Yogita,

I agree with surendra regarding the NDA, it works with most of the employees when the person has signed on a stamp paper and its notorized, the document has a legal standing in the court of law and this would also help you to target the competitor who encourages such approach. Also you have to ensure that any documentation you have done in such manner is taken seriously, the ex employee has to be invited to office and be warned officially, this discussion can be recorded by the HR department and this can be used by you if you have to go ahead with the case. Once you set examples regarding such issues new cases wont follow.

The alternate solution would be not to have all the eggs in one basket, keep a rotation policy in your office especially in sales(by rotation policy I mean let the person go from sales to service to customer service etc...), if thats not possible then arrange atleast two people to service the same client, so that even if one person leaves you have the other person as backup and he shares all the contacts. Also if you can ensure the same level of service or auality to the same client I dont think he would have reasons to change your product.

Thanks & Regards,

AJ

Dear Yogita,
In my opinion, your oirganisation have no right to act against the said employee. It is his/her personal choice to resign from the services of your company. All he needs to do is to settle his account from the company and do his full & final settlement of his account.
I have gone thru one similar case law in some legal journal, where the Hon'ble court has disallowed the organisation to act against the departed employee b'coz he has joined their competitor on the same profile and responsibilities as might he will be getting increased salary and other perks and privileges.
All you need to do is to draw sound HR policies (Competitive Salary Structure, Better Facilities, Recognition, Respect to employees, perks etc) in order to retain your experienced employee and facilitate attraction to the serving employees of your competitor.
Hope it will settle your query.
Regards
Amit Anand Gera

JOINING COMPETITOR-CAN'T BE RESTRAINED

An agreement whereby an employee is restrained to join the competitor will be violative of public policy as stipulated in section 27 of the Contract Act,1872.
In matters relating to employment, the employee and employer both enjoy certain rights but they can never be used against the detriment of any one. The employee cannot be forced to remain fastened with the loyalty to the employer if that is not properly enumerated in consonance with the existing Acts. No employee can be compelled or forced to remain in employment at the cost of his/her betterment or progress. If the employee is getting the chance of better employment, he/she cannot be prevented from leaving the job on the pretext that it would amount to huge benefit to the rival organisation.

Hope this clarifies any doubt.

Regards
Tapan Pandit
HRD