I have an NDA signed with the present organization which states that I can't join companies with a similar nature of business or products for the next 15 years. Since this NDA was enforced to be signed by the employees, there was no option but to sign it as we were released from the previous employment fully.
Is it legally valid to prohibit employees from joining a similar product company? For instance, a person from Ford Motors cannot join either Hyundai or Nissan Motors and has to join an irrelevant industry?
From India, Chennai
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Is it legally valid to prohibit employees from joining a similar product company? For instance, a person from Ford Motors cannot join either Hyundai or Nissan Motors and has to join an irrelevant industry?
From India, Chennai
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The period of 15 years for a non-compete clause is really unreasonable and onerous. Such a clause will not be upheld by the courts. Indeed, there is a Delhi High Court judgment in M/S STELLAR INFORMATION TECHNOLOGY PRIVATE LTD versus MR RAKESH KUMAR & ORS decided on 29.08.2016 which clearly sums up the law on the subject. In fact, it will be impossible for any employer to keep track of its employees for the next 15 years after the termination of service.
From India, Mumbai
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1656From India, Mumbai
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In the Indian context, we cannot precisely say that a Non-Disclosure Agreement or Non-Compete Agreement between an employer and his employee is completely invalid as it is violative of sec. 27 of the Indian Contract Act, 1872. Many factors like the position held by such an employee, the amount of time and money invested by the employer to impart specialized training to the employee, the length of time, and the extent of geographical limits in which the employee can hire out his services to similar industries or start his own venture of similar or same business after his separation have to be looked into in this regard.
However, I agree with Mr. KK!HR that a 15-year ban on reemployment in a similar industry is too long a period and it can raise the question of adequate compensation by the employer commensurate with the length of the ban.
From India, Salem
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However, I agree with Mr. KK!HR that a 15-year ban on reemployment in a similar industry is too long a period and it can raise the question of adequate compensation by the employer commensurate with the length of the ban.
From India, Salem
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Non Disclosure Agreement by employees- Validity -Interpretation of NDA.docx
Nda-employee_17 0.pdf