• Company's client wants to hire me

I work in IT industry in an MNC and my company's client has offered me a job at their location. They have asked to start the process unofficially and have ruled out the idea of buying us out from the current organization as they cannot do that..
One of the management person knows about this and has informed the management as well about this.
As per the company's policy, we cannot work at the client eveb after one year of separation from the current orgnaization.

I am willing to join the client as it is a huge opportunity for me which i wont get again in a lifetime but i don't want any legal proceedings against me. Also i want to have a clean background for my furutre career prospects as well. Please suggest if i have any option so that i can join the client without any legal proceedings against me.

Also if any legal case is filed against me, will this effect my future constraints for initiating a work visa in foreign countries or my future prospects while switching a job.

Thanks in advance!
Asked 7 years ago in Labour

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13 Answers

I am sure there would be confidentiality clause in the job contract whereby you can't join the competitor or client of your employer. This is often essential to stop poaching and stop sharing confidential information of the employer.

So if any such contract is existing between you and your employer you can be restrained from joining the client office by way of suit for injunction.

However if its found out that you were not in charge of confidential information then chances of restraint are less.

Since violation of such contract would be civil wrong you should take the decision after considering all merits and demerits.

Devajyoti Barman
Advocate, Kolkata
23300 Answers
520 Consultations

1) you are at liberty to resign

2) serve the notice period and join the client

3) any agreement in restraint of trade is void under section 27 of contract act

4) even if any case is filed by your employer you can take the defence that you cannot be restrained from joining any organisation after you leave the job

Ajay Sethi
Advocate, Mumbai
97332 Answers
7864 Consultations

If any stay is granted by court it would affect your career prospects but chances of court grating any reliefs to your current employer are bleak

Ajay Sethi
Advocate, Mumbai
97332 Answers
7864 Consultations

Since no employer would like any of its employee to join its competitor or clients , your doing thus breach of agreement may cause serious concern about your loyalty to the employer.

Devajyoti Barman
Advocate, Kolkata
23300 Answers
520 Consultations

Yes, if you happen to do so that will for sure affect your future as by doing this you would be knowing for professional misconduct, and no body would show their trust on you.

I suggest you to if possible join after one year as per your company policy or join as a part time employee without knowing else drop the idea.

Good Luck...!

Sanjay Baniwal
Advocate, South Delhi
5477 Answers
13 Consultations

You can't do this, if you signed a non compete Agreement with your employer, or this client of your employer, singed a non poaching Agreement.

However, to give you a concrete response, you are requested to quote the relevant clauses from your non compete Agreement/clause.

Vibhanshu Srivastava
Advocate, Lucknow
9680 Answers
312 Consultations

Doing this might create Legal complications for you, however, this won't mar your chances to obtain visa etc and travel abroad.

If you're willing to undertake this risk, you are free to join this client company.

Vibhanshu Srivastava
Advocate, Lucknow
9680 Answers
312 Consultations

If you join the client's company then your ex company management will be at the liberty to file a case against you. Though you can defend the same by saying that you were not in possession of any confidential information and that you can not be stopped to carry on any trade or business .

Regards

Anilesh Tewari
Advocate, New Delhi
18090 Answers
377 Consultations

But if however, a case is filed then it will have a negative impact on your career.

During pendency of the case it will also have an impact on your future foreign prospects.

Regards

Anilesh Tewari
Advocate, New Delhi
18090 Answers
377 Consultations

All the things are depends on the terms and conditions mentioned in non-disclosure agreement. As you said there is no such kind of information, then there is no need to worry.

On the other hand, it wont affect your career as well because, this is a chain, it has no end.

Laksheyender Kumar
Advocate, Delhi
734 Answers
2 Consultations

You cannot over rule the companies rules and regulations in which your working as you signed and obey the rules and regulations of your working company.

P V Reddy
Advocate, Hyderabad
422 Answers
3 Consultations

A non-compete clause (commonly referred to as a “covenant not to compete”) is defined by state contract law, and refers to situations where one party to the contract (usually an employee or independent contractor) agrees to not enter into or start a similar profession or offer the same or similar services.

n India such a clause is governed by the codified provisions of section 27 of the Indian Contract Act, 1872 ("Contract Act"), whereby every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. The Indian courts have more or less adhered to the letter of the law and have given a consistent view treating such clauses more as a concept of equity than a contract.

Therefore any legal action taken in this regard ca be challenged properly in court of law.

T Kalaiselvan
Advocate, Vellore
87534 Answers
2349 Consultations

If confidentiality defines any information of my current company which will be of benefit to client., then there is no such information. Also, Will this hamper my future jobs and will this be visible in my background verification by future prospective employers?

“It is well settled that such post termination restraint, under Indian Law, is in violation of Section 27 of the Contract Act. Such contracts are unenforceable, void and against the public policy. What is prohibited by law cannot be permitted by Court's injunction.”

The judgment of the Supreme Court in Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan and Anr. sheds some light on the legality of such clauses. The Apex Court observed,

“Under Section 27 of the Contract Act (a) a restrictive covenant extending beyond the term of the contract is void and not enforceable. (b) The doctrine of restraint of trade does not apply during the continuance of the contract for employment and it applied only when the contract comes to an end. (c) As held by this Court in Gujarat Bottling v. Coca Cola (supra), this doctrine is not confined only to contracts of employment, but is also applicable to all other contracts.”

In view of the aforesaid observations, it can be inferred that while dealing with disputes relating to such non-compete clause under an employment agreement, the Indian courts have considered the pre-termination period of the employment distinct from the post termination period of the employment. Whilst the courts have been tolerant about the application of the non-compete clause, they have walked an extra mile to ensure that such clause do not have an effect after the cessation of employment and have held that such clause would fall within the mischief of section 27 of the Contract Act.

T Kalaiselvan
Advocate, Vellore
87534 Answers
2349 Consultations

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