Non compete agreement
9 months ago
I have signed non compete agreement with a company where i was working.There they have mentioned that i cannot join any competitor or there client company for a period of 2 years after resignation.
They have an arbitration clause in that. If i join any company within 2 years can the agreement will be enforcable by arbitrator or can i challange that in court
A.Dear client,
An arbitration clause is a clause in a contract that requires the parties to resolve their disputes through an arbitration process. Although such a clause may or may not specify that arbitration occur within a specific jurisdiction, it always binds the parties to a type of resolution outside the courts, and is therefore considered a kind of forum selection clause. So you will have to approach the arbitrator
An arbitration clause is a clause in a contract that requires the parties to resolve their disputes through an arbitration process. Although such a clause may or may not specify that arbitration occur within a specific jurisdiction, it always binds the parties to a type of resolution outside the courts, and is therefore considered a kind of forum selection clause. So you will have to approach the arbitrator
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A.Dear Client,
Employers may require employees to sign non-compete agreements to keep their place in the market. Those required to sign these agreements may include employees, contractors, and consultants. A non-compete agreement legally binds a current or former employee from competing with an employer for a specific time after employment ceases for any reason. The “Non-Compete” clause in the contract/agreement of employment, is governed by the codified provisions of Section 27 of the Indian Contract Act, 1872, whereby every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. So, the enforceability of non-compete agreements is overly restrictive on competition — meaning they are only enforceable in certain circumstances or not at all. Indian courts have also consistently refused to enforce post-termination non-compete clauses in employment contracts as restraint of trade is impermissible under section 27 of the Indian Contract Act-1872, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living. So, the “Non-Compete” clause in the contract/agreement of employment being void under section 27 of the Indian Contract Act-1872 cannot be enforceable on cessation of employment even through arbitration. You need to consult with an Advocate for further clarification and steps to be taken in the matter before litigation.
Employers may require employees to sign non-compete agreements to keep their place in the market. Those required to sign these agreements may include employees, contractors, and consultants. A non-compete agreement legally binds a current or former employee from competing with an employer for a specific time after employment ceases for any reason. The “Non-Compete” clause in the contract/agreement of employment, is governed by the codified provisions of Section 27 of the Indian Contract Act, 1872, whereby every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. So, the enforceability of non-compete agreements is overly restrictive on competition — meaning they are only enforceable in certain circumstances or not at all. Indian courts have also consistently refused to enforce post-termination non-compete clauses in employment contracts as restraint of trade is impermissible under section 27 of the Indian Contract Act-1872, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living. So, the “Non-Compete” clause in the contract/agreement of employment being void under section 27 of the Indian Contract Act-1872 cannot be enforceable on cessation of employment even through arbitration. You need to consult with an Advocate for further clarification and steps to be taken in the matter before litigation.
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