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Dear Client,
In India, Non-Disclosure Agreements (NDAs) and Non-Compete Clauses are contractual tools used by employers to protect their business interests. However, their enforceability is subject to the provisions of the Indian Contract Act, 1872, particularly Section 27, which prohibits any agreement in restraint of trade and profession. As per the mandate of Section 27 of the Indian Contract Act,1872, any terms and conditions of an agreement that directly or indirectly compel the employee to serve the employer or put a restriction on them joining the competitor or other employer are not valid. The employee has the right to resign from employment even if he has agreed to the employment bond to serve the employer for a specific period. In the case where the employer can prove that the employee is joining the competitor to disclose the trade secret, then the court may issue an injunction order restricting the employee from joining the competitor. Further, Section 73 of the Indian Contract Act,1872 makes provision for unliquidated damages (not stipulated in a contract), Section 74 of the Act deals with liquidated damages (stipulated in a contract), and no compensation is attracted for mere breach of contract under Sections 73 and 74 of the Act. There is no overarching law that prohibits a person from doing multiple jobs. But, before joining another Company, you are required to tender your resignation from the earlier company and obtain a relieving letter that eventually causes the dual employment or overlapping of service. Background verification (BGV) check is a process many organizations carry out to verify the information provided by the candidate during hiring. Verification of EPFO records through UAN is critical for conducting employee background checks because it allows employers to confirm that their employees are not using false or stolen identities to gain employment. In case of a negative background verification check, an employer can even reject/terminate the employment of the candidate, following the service rules of the establishment, and that may potentially damage your service career.
Posted On 03-May-2025
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