Employee Issue - Legal Action

Hi..Friends,
One of my company's Sr. Manager resign without following the one month notice period clause and instantly joined the competitor company. Their is a restriction clause also in the appointment letter that not to work with the competitor for a period of 24 months after leaving the service.
Kindly Suggest me what legal action we have to adopt.
Nitesh Sharma
HR-Head
Manlift india pvt.ltd.

As per contract act you cant contract on humans life.
The only solution you have is to blacklist the employee and send his data to your burisness union.
Consult a lawyer if any action can be taken

Hi Nitesh,

In such cases you have to take a pragmatic view.

Apart from withholding the balance of his dues, there is actually little else you can do.

The clause in his contract relating to not working with another competitor for 24 months is not enforceable in any court. It is far too long a restriction.

His argument (which would be considered very reasonable) is that he is restricted from earning a living; particularly as he is a senior manager he knows nothing else, apart from this line of work. Taking this to court will result in a huge cost and you will gain little if anything. In other words you must consider the economics involved.

However, you should try to find out the cause of his resignation, and take steps to ensure that such causes are negated.

If you value him then, consider if you would take him back. If so, then I suggest you write a polite letter asking his reasons, but leave the door open for him to return either now in the future (when he has even more experience).

Blacklisting a person in most circumstances does no good to anyone especially as you run the risk of getting a reputation as an aggressive employer, in which case good candidates will not want to work for you. So in the long run you will lose.

I hope the above helps and gives you some food for thought.

Regards,

Harsh

Hello Nitesh,
I would like to add my personal views
This kind of action from senior manager is not acceptable as they are supposed to be responsible person. We should always maintain good relation with ex employer.
In India its citizen are free to choose professional across India. So you cannot restrict him from joining competitor as this will be the violation of fundamental right.
You can take legal action against him on the ground that he has not served the notice period as per the employment contract that you can recover notice pay.
We need to be broad in our imagination and action, rather should work on the root cause what compel him to act so and action to be taken to stop this is in future.

Hello
No use. Unless patents and trade secrets are violated. be prepared that this trend will continue. Do not go to court. This just benefits lawyers.
Regards
Rajesh

Mr. Nitesh,
You can have a tacit understanding in your trade association not to poach others' employees. If one company does not honour that, play the same game with them!
While selecting / promoting persons, you have to be careful that they would be reliable. On this count, recommendations from trust-worthy people with help.
Senior Managers leaving can take away many of the company secrets and it can harm the company.
You may review the steps the company takes in promoting loyalty. There can be also incentives like escalating rates of incentives, superannuation fund available only after certain number of years of work, etc. They should be made to feel wanted and treated in a friendly manner by the top management. They should feel as if it is their own company.
R Ramamurthy

Hi
Every employer wants a loyal employee and every employee wants a safe employer. In reality this two are not absolute and has no finality in terms of getting it. If the wishes of the employee or employer not match with what available the shift takes place and this is the current scenario compared to 25 years back. Hence it is always to move forward while try to look back why this happened is the best way for every organisation until the employee had committed some criminal act.

First get a legal notice issued through a lawyer referring to the clause(s) that are violated. Depending on your terms of the contract you can approach the civil court to claim restraint or damages. When a Sr. employee leaves and joins a competitor it is detrimental to your company business and cannot be taken lightly, and that is the very reason why that restraint clause is there in his contract. By and large it is a settled law that such restraint is valid and justified until 3 years but not beyond.
Regards,

Dear Mr. Hansi,

This is applicable on the posts related to management positions not to Managerial Positions. The Employee in question is a Sr. Manager. The best the compay can recover is the Notice Period Salary not more. For that too the Company will have to go to Civil Court. It is true that such restriction are valid but on certain positions. Generally on the positions who have the policy making power of the company or the positions who have the knowledge of future projects of the company or positions involving the knowledge of confidential information which if leaked could adversely effect the Business of the Company to a great extent.

For example: if a person is involved in preparing the tenders for the company. Such person if leaves the company and instantly joins other competitor company can leakout the tender bid amount. Such person can be stopped from joining the Competitor Company but a sufficiant amount should be given to sustain himself during the period of such non employement otherwise he may argue that how will he sustain during the non joining restriction period. Because if a person has worked in a specialized area he cannot do any other job.

Dear Nitesh,
Greetings!!!
Legal route shall be a long road. You can definitely catch him for not serving notice period and take appropriate action , in accordance with your company's policies and procedures.
As far as joining competitor's company is concerned, there is little that you can do. You will have to prove misuse of confidential data, violation of patents etc. which is practically very difficult. Please keep in mind that the expertise and contacts gained by employee during his/her employment period with your organization belongs to the person and not to your organization, as established by a court judgement; so you can't have that as a basis of your legal argument.
My suggestion will be to let it go, frame a proper exit policy and try to foster a culture of ownership in your organization.