Hi,
I have recently quit a company and have joined a new organization. However, after a month's time, I received a letter from my previous employer stating that I have breached the Non-Solicitation Clause of my Appointment Letter, citing the details of the clause. They have also advised me to refrain from such actions.
Please advise if I am required to respond to this letter or what the next steps I need to take are.
Regards,
Amit
From India, Pune
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I have recently quit a company and have joined a new organization. However, after a month's time, I received a letter from my previous employer stating that I have breached the Non-Solicitation Clause of my Appointment Letter, citing the details of the clause. They have also advised me to refrain from such actions.
Please advise if I am required to respond to this letter or what the next steps I need to take are.
Regards,
Amit
From India, Pune
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Dear Mr. Amit,
It would be great if you could elucidate the clause details to determine whether the indictment is worthwhile. Moreover, the basis of your question is weak without any other details such as your organization type, your role, and department, etc.
Also, please let us know your terms of separating from the company and your point of view for any of our seniors to suggest the point precisely.
Thanks!
From India, Visakhapatnam
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995It would be great if you could elucidate the clause details to determine whether the indictment is worthwhile. Moreover, the basis of your question is weak without any other details such as your organization type, your role, and department, etc.
Also, please let us know your terms of separating from the company and your point of view for any of our seniors to suggest the point precisely.
Thanks!
From India, Visakhapatnam
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Hello Amit,
As Sharmila Das mentioned, please give more details about the clause being referred to – as this aspect can differ from company to company. In principle, the answer to your query ['...do I have to answer this letter'] is a BIG YES. If not, you stand the chance of them going legal, and you spending time, effort, and money on handling it. This is where some of the additional inputs Sharmila Das mentioned come in.
But, prima facie, I think you DIDN'T do the right thing in joining a competitor – especially when you had a Non-Solicitation Clause in your Offer/Appointment Letter. Please let us know your logic/reason(s) for doing so. I only hope it's NOT a 'nothing will happen' sort of thing.
Regards,
TS
From India, Hyderabad
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As Sharmila Das mentioned, please give more details about the clause being referred to – as this aspect can differ from company to company. In principle, the answer to your query ['...do I have to answer this letter'] is a BIG YES. If not, you stand the chance of them going legal, and you spending time, effort, and money on handling it. This is where some of the additional inputs Sharmila Das mentioned come in.
But, prima facie, I think you DIDN'T do the right thing in joining a competitor – especially when you had a Non-Solicitation Clause in your Offer/Appointment Letter. Please let us know your logic/reason(s) for doing so. I only hope it's NOT a 'nothing will happen' sort of thing.
Regards,
TS
From India, Hyderabad
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Dear Amit,
The full text of the "Non-Solicitation clause" and other related clauses is not provided here. However, if it were to be an 'omnibus' clause without restrictions like the number of years for joining any of their competitors, what happens if it is breached, what the separation clause says, etc., the same could be contested. We need to study the whole document before a meaningful opinion can be given.
Kumar S.
From India, Bangalore
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The full text of the "Non-Solicitation clause" and other related clauses is not provided here. However, if it were to be an 'omnibus' clause without restrictions like the number of years for joining any of their competitors, what happens if it is breached, what the separation clause says, etc., the same could be contested. We need to study the whole document before a meaningful opinion can be given.
Kumar S.
From India, Bangalore
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A non-solicitation clause in the appointment letter of an employee has little meaning. It is not likely to withstand the scrutiny of courts of law. Any person working in a company is free to join any other company after they leave. Furthermore, while working in the previous company, they meet various people. No one can tell them they must not speak to these people again as it goes against their fundamental rights.
Misuse of trade secrets would be a separate matter. For example, we have non-disclosure agreements with our employees. The only time a non-compete clause applies is if you have sold your business and have been paid not to compete. You should seek the help of your current employer to navigate this situation in a way that the previous employer understands that going to court is a waste of time. Your current employer will support you as it affects their business.
From India, Mumbai
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Misuse of trade secrets would be a separate matter. For example, we have non-disclosure agreements with our employees. The only time a non-compete clause applies is if you have sold your business and have been paid not to compete. You should seek the help of your current employer to navigate this situation in a way that the previous employer understands that going to court is a waste of time. Your current employer will support you as it affects their business.
From India, Mumbai
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Law doesn't prohibit you from joining a rival company in the same industry, and the company won't pursue something that is still debatable even though there is a contract between you and the company. It will not be unethical if you inform your clients that you have joined a rival company. However, it will be unethical if you are pricing your products lower because of your previous company's pricing knowledge.
Usually, companies take steps to re-quote old tenders. Non-compete clauses are usually seen in business agreements, not in job contracts. Non-solicitation agreements are enforceable, but no company will hassle clients as clients may have to provide testimony in court. Therefore, you can ignore the notice, but I suggest not using copyrighted materials from your previous company to further your tasks as that would be considered fraud and misuse of company materials.
From India, Bangalore
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Usually, companies take steps to re-quote old tenders. Non-compete clauses are usually seen in business agreements, not in job contracts. Non-solicitation agreements are enforceable, but no company will hassle clients as clients may have to provide testimony in court. Therefore, you can ignore the notice, but I suggest not using copyrighted materials from your previous company to further your tasks as that would be considered fraud and misuse of company materials.
From India, Bangalore
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Hi,
In continuation of my query i would like to quote some text from the recieved letter as below:
“We would like to highlight in case of joining the above mentioned organisation, you would be breaching your obligations relating to Non Solicitation clause of your Appointment letter.
Clause 9 of you Appointment letter provides:
“Non solicitation: You shall not any time during the term of your employment with the company or thereafter, under any circumstances, directly or indirectly solicit the company’s and/or any of its subsidiaries and/or affiliates personnel to leave the employment of the company and/or any of its subsidiaries and/or affiliates or apply for employment with any third party or encourage such personnel of the company to take any action or inaction that may adversely impact the performance by the company of its obligations under this letter and/or any other contract adversely impact the ability of the company to carry out its normal business activities. You further agree that you shall not engage in soliciting business or allied business that is in any way similar, identical or competitive with the business, activities, services of the company, or with those customers of the company with whom you had any contact, during your employment with the company and for a period of one year after you employment ceases with the company.”
In view of the above, we would like to refrain that you shall not breach the obligations, including non-solicitation and confidentiality mentioned in you Appointment Letter for a period of one year after you employment ceases with the company.
Please be informed that this letter is without prejudice to any other rights/actions which the company may be entitled to under law.”
I was working a executive level at my prvious employment.
Please advice.
Aegards,
Amit
From India, Pune
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In continuation of my query i would like to quote some text from the recieved letter as below:
“We would like to highlight in case of joining the above mentioned organisation, you would be breaching your obligations relating to Non Solicitation clause of your Appointment letter.
Clause 9 of you Appointment letter provides:
“Non solicitation: You shall not any time during the term of your employment with the company or thereafter, under any circumstances, directly or indirectly solicit the company’s and/or any of its subsidiaries and/or affiliates personnel to leave the employment of the company and/or any of its subsidiaries and/or affiliates or apply for employment with any third party or encourage such personnel of the company to take any action or inaction that may adversely impact the performance by the company of its obligations under this letter and/or any other contract adversely impact the ability of the company to carry out its normal business activities. You further agree that you shall not engage in soliciting business or allied business that is in any way similar, identical or competitive with the business, activities, services of the company, or with those customers of the company with whom you had any contact, during your employment with the company and for a period of one year after you employment ceases with the company.”
In view of the above, we would like to refrain that you shall not breach the obligations, including non-solicitation and confidentiality mentioned in you Appointment Letter for a period of one year after you employment ceases with the company.
Please be informed that this letter is without prejudice to any other rights/actions which the company may be entitled to under law.”
I was working a executive level at my prvious employment.
Please advice.
Aegards,
Amit
From India, Pune
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Dear Amit,
I have observed such conditions in many companies where appointment letters are issued to employees. This condition goes against the constitution of India and is not enforceable as it violates fundamental rights. Therefore, do not worry. You can respond to this issue with the help of your current employer or a legal advocate.
Regards,
kumar.s.
From India, Bangalore
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I have observed such conditions in many companies where appointment letters are issued to employees. This condition goes against the constitution of India and is not enforceable as it violates fundamental rights. Therefore, do not worry. You can respond to this issue with the help of your current employer or a legal advocate.
Regards,
kumar.s.
From India, Bangalore
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Mr. Amit and all others;
Please read the SC judgment in the case Superintendence Co India (P) Ltd vs. Krishna Murgai (AIR 1980 SC 1717), in which the court held that such restraining clause is against the Indian Contract Act. As such, you can ignore the notices. You can join any firm of your choice. But you should not divulge confidential matters of your previous company.
Varghese Mathew
9961266966
From India, Thiruvananthapuram
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Please read the SC judgment in the case Superintendence Co India (P) Ltd vs. Krishna Murgai (AIR 1980 SC 1717), in which the court held that such restraining clause is against the Indian Contract Act. As such, you can ignore the notices. You can join any firm of your choice. But you should not divulge confidential matters of your previous company.
Varghese Mathew
9961266966
From India, Thiruvananthapuram
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Hi,
Thank you for your suggestions and explanations. However, my full and final settlement has not been completed with my previous employer yet. My relieving letter, experience letter, and salary are still pending with them. Could you please advise me on how to proceed with this matter?
Regards,
Amit
From India, Pune
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Thank you for your suggestions and explanations. However, my full and final settlement has not been completed with my previous employer yet. My relieving letter, experience letter, and salary are still pending with them. Could you please advise me on how to proceed with this matter?
Regards,
Amit
From India, Pune
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Legal Clarification on Negative Covenants in Employment Agreements.pdf