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Vini   20 April 2023

Conflict of interest

Hi,

I own a very small Consulting firm for last few years. My husband recently joined a large Consulting firm at a senior level offering same services as mine.

Can husband's firm take any legal action, if above is interpreted as Conflict of Interest situation? Can it lead to any legal case, claiming damages (although there is no instance of my firm taking any client from husband's firm)?

Pertinent to mention that the Employment Contract does not prohibit above. It does however have standard confidentiality clauses.

I will appreciate your advice on above case. 

Thanks in advance!!



Learning

 6 Replies

T. Kalaiselvan, Advocate (Advocate)     21 April 2023

In certain situations, the work activities of family members can create a conflict of interest. 

This could be a problem if you, or someone who reports to your husband, has business dealings with the company or plays a role in selecting your wife’s company as a supplier. Tell to your husband to inform his  supervisor about this relationship and do not participate in decisions or negotiations with the supplier.

You must be careful to avoid a conflict of interest when you seek business with his company

Dr J C Vashista (Advocate)     21 April 2023

Even if there is no such clause in appointment letter of your husband, it shall create problem for you as well as him.

P. Venu (Advocate)     21 April 2023

Has your disclosed the details of your consultancy before taking up the  employment?

 

Vini   21 April 2023

Thanks! Can you please elaborate on the potential problem - besides termination, can it have any other consequence?

 

T. Kalaiselvan, Advocate (Advocate)     21 April 2023

You can wait and watch the developments if that has any other impact other than his employment getting terminated due to this

P. Venu (Advocate)     21 April 2023

The Firm can claim damages/compensation if they tangible evidence of unfair advantage to your firm vis-a-vis theirs.


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