Mudduswami 19 January 2016

Company asking to give an under-taking

Dear All,

My current employer has sponserd my PhD (2007 - 2012). I was already a PhD student with central Govt. (MHRD) fellowship. But, for their name, they have sponsered a fellowship on their name and selected me for that position. Even without their sponsorship, I might have got the fellowship from the Institute.

One of the clause in the contract that time was, " You shouldn't engage into similar work for a period of 5 years from the date of commenecement of agreement" - which means it is completed by Sep' 2012.

After that, I joined as an employee in the same organization and worked for more than 3.5 years. In the employement offer given in 2012 (July), in standard terms and conditions, one clause says " I shouldn't take up any employement in a competitor company for 24 months from the date of relieving".

Now, when I resigned (three months of period - which I agreed to serve), the HR is asking for an under-taking on and INR.100 stamp paper saying that " I will not work in the competitor organization for 24 months".

I denied to do that, saying that it was never told at the beginning or during the course of employement.

As I denied, the employer has gone to court seeking an injuction on me not to join a competitor otherwise an undertaking as mentioned (You shouldn't join a competitior for 24 months).

I come across "Non - compete clause in India". Which says "It stipulates that an agreement, which restrains anyone from carrying on a lawful profession, trade or business, is void to that extent. Under section 27 of the Indian Contract Act, 1872 agreements in restraint of trade are void"

Can anyone suggest on how should I proceed. I dont want to sign this under-taking as it is against the above mentioned Act.

Thanks

Mudduswami

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1 Replies

(Guest)

you have already accepted the employment offer that says that you cannot work for competitor for 24 months from the date of your relieving. then i don't understand why the stamp paper ?

first of all the undertaking is not a contract. it is a promise engagement, or stipulation considered independantly and not mutually. it means that if you sign that undertaking, you are making a promise yourself voluntarily to not do some act. it may not be mutually agreed between you and your employer. therefore non competence clause won't work here.

you challenge the injunction on the ground that it violates your constitutional right of freedom to choose trade or profession. the employer has no right to prohibit you from choosing jobs. the court will dismiss it.