Onboarding compliances

It is legal to get the bond signed from employees for not working in competitor companies for a particular time period ?

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I think incorporating such a clause in an appointment order for many roles is in practice in various industries. Hope you are looking at sort of commitment like “no engagement with competitors after exit for a definite period”. No need to put this as a bond but could be added as a non-compete clause.

Debate is still going on whether bond is legal or illegal and many times, the content can push it to illegal. Also Bonds can drag the contract to court easily and the court may ask whether the employer spend considerable amount of money to develop the person, and also probe the reasonability of the bond.

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Hi @sagarg

I would say post the Exit from current company, mentioning You cannot join as Employee in Competitor company is not morally right.

You should have Non-Compete, Non-Poach & Confidentiality clause as below:-

This agreement is amendment to your Employment Terms & Conditions with XYZ Company and is valid till 3 Years after the termination of your employment contract with Company.

EXECUTIVE & PROFESSIONAL NON-COMPETE AGREEMENT

You agree not to compete with XYZ Company for a period of Three (03) years after the separation from your employment contract with the company.

The term “Non-Compete” as used herein shall mean that the undersigned employee shall not, without the prior written consent of the Company,

(i) Directly or indirectly, own, purchase, organize or take preparatory steps for the organization of, or

(ii) build, design, finance, acquire, lease, invest in any business in competition with or otherwise in any geographic area or market where the company or any of the sister concerns or subsidiaries are conducting any business until Three (03) year from the date of termination of your services with the Company.

CONFIDENTIALITY CLAUSE

You may have access to records and other information [available in Soft Copy (viz Email, Saved Document, etc.); Hard Copy (viz Printouts, Files, etc.); or any other format] about customers, employees and other IP’s including proprietary information, trade secrets, and intellectual property to which company holds rights. You agree to keep all such information strictly confidential and to refrain from discussing this information with anyone else without proper authority. This includes, but is not limited to, information on the strategy, sales, client lists, trade secrets, or financial aspects of company’s business. You agree to respect the confidentiality of company’s trade secrets, trademarks, and patents, and not to disclose them to anyone.

COMPANY PROPERTY

You may be given electronic gadgets like Computers, Laptop, USB Data Card, Telephone, Smart-phone, Sim Card or any other electronic device. It is your responsibility to use these equipments only for the official purpose and are also expected to handle them with care. You should understand the importance of using the office equipment economically and ensure that you handle the machines smoothly & carefully as rough handling may cause damages that my end up spoiling the system. Failure to do so will invite the damages to be recovered from concerned employee.

NON-POACH

You agree that you will not solicit, either directly or indirectly, employees from, or of company for a period of Three (03) years thereafter.

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