Executing aNon-Competence Agreement with Employees

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Our Querist is a Tech Start-up, which is into the field of Artificial Intelligence and Software Development for some big players of different industries. The Querist had employed more than 50 engineering graduates and had around 10 post graduates who were working on different projects. The projects involved complex coding and de-coding of certain techs which are to be delivered to the respective Clients of the Querist, however, their proprietary rights were to remain with the Querist.

The Querist had approached us to ensure that the existing employees should not run away with the clients of the “Querist” and how to prevent the employees from starting same and/or similar business activity. The same can be well achieved only by way of executing a Non-CompetenceAgreement between the employer and the employee. The terms and conditions mentioned in the Non-Competence Agreement clearly envisage the stringent clause which debars the employee from commencing same and/or similar business for a stipulated time period i.e. during the tenure of employment and for the period mentioned thereafter. The employer and the employee are clearly bound by the Non-Competence Agreement as the same carries the penal clauses in case of the violations of any of the terms and conditions. The parties to this agreement can definitely approach the Court in case of any violations.

We hope that the case study would envisage the legal importance and sanctity of the Non-Competence Agreement with Employees to our readers and increase their knowledge about the HR related compliances including that of the business laws and/or corporate laws.