I have already stated, and I will repeat :
Sec 27 of Indian Contract Act specifically disallows any contract in restraint of trade or profession except in case of sale of goodwill of a business. So the clause is not enforceable
Second, no such clause can be inserted after the person has left. If it was introduced while he was working, it would any way need his consent in writing. But even then, the clause is unenforceable.
The fact that the company is new, old or startup, does not matter in the above context.
He needs to engage a lawyer who will send out a legal notice and if necessary, file a case against the company for recovery of his money. I hope he understands that such a course is generally expensive. One additional point, his PF, Gratuity, etc is not subject to any deduction for this or any other clause.
From India, Mumbai
2388Sec 27 of Indian Contract Act specifically disallows any contract in restraint of trade or profession except in case of sale of goodwill of a business. So the clause is not enforceable
Second, no such clause can be inserted after the person has left. If it was introduced while he was working, it would any way need his consent in writing. But even then, the clause is unenforceable.
The fact that the company is new, old or startup, does not matter in the above context.
He needs to engage a lawyer who will send out a legal notice and if necessary, file a case against the company for recovery of his money. I hope he understands that such a course is generally expensive. One additional point, his PF, Gratuity, etc is not subject to any deduction for this or any other clause.
From India, Mumbai
Dear colleagues,
Let me understand this point clear: Rakhi stated this in the query-
...." Now his ex-company has added a non-compete clause of 5 lacs in his FNF. He should be getting 2.1 lacs after all adjustments but after the 5 lacs clause they are demanding 3 lacs."
What is now given to understand here ? . This 'non-compete clause of 5 lakhs' was not there 'originally' but 'now introduced a fresh' on resignation ^ FNF settlement. Is my understanding correct ?
If so, the question arises, insistence of 5 lakhs is an afterthought and probably didn't form part of terms of appointment at the time of joining but only introduced now, whether agreed, signed as a doc is not known. I would ask Rakhi to clarify this fact first before we freeze our opinions about the acceptability of Rs.5 Ldemand.
From India, Bangalore
Let me understand this point clear: Rakhi stated this in the query-
...." Now his ex-company has added a non-compete clause of 5 lacs in his FNF. He should be getting 2.1 lacs after all adjustments but after the 5 lacs clause they are demanding 3 lacs."
What is now given to understand here ? . This 'non-compete clause of 5 lakhs' was not there 'originally' but 'now introduced a fresh' on resignation ^ FNF settlement. Is my understanding correct ?
If so, the question arises, insistence of 5 lakhs is an afterthought and probably didn't form part of terms of appointment at the time of joining but only introduced now, whether agreed, signed as a doc is not known. I would ask Rakhi to clarify this fact first before we freeze our opinions about the acceptability of Rs.5 Ldemand.
From India, Bangalore
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