I had joined a company as a software engineer, but they did not recognize my talent and hard work and paid me less than even my juniors. I was trying to prove my worth and had built a good rapport with the client and colleagues, yet my company was not taking any notice. I started looking for a different job and applied through various job portals. The client found out about my resignation plans and offered me a job. I checked the appointment letter and there was no clause that prohibited me from joining the client company. I accepted the offer and was serving my notice period when my previous company came to know about it. On my last day, they asked me to sign a relieving letter which stated that I cannot join the client company, which I felt was done with bad intentions. I was in a dilemma as I had a family to support. I joined the client company, but my earlier employer found out and sent me a legal notice demanding 2 Crores in compensation. Is it justified to add such clauses in the relieving letter? I believe all the terms and conditions should be mentioned in the appointment/offer letter so that the employee is aware of them beforehand. I do not want to lose my current job as I have a good reputation here and they value my work. Can anyone help me?
This issue has been addressed in this forum on multiple occasions. The Delhi High Court has issued a decision in this regard. You can find the details in the thread titled “Delhi High Court Ruling on Non-Compete Clause in Employment Agreement”. Thank you
Is it possible for a relieving letter to be legally binding if it includes non-solicit and non-compete conditions, even though the appointment letter does not mention them? An employee usually reviews the appointment letter before accepting a job or assignment, so from that perspective, they would be free to go anywhere. The inclusion of non-solicit and non-compete conditions in the relieving letter was unexpected, but the employee has to sign it to ensure the process is completed. Otherwise, the company could influence the client company (the employee’s next employer) to withdraw the job offer. This raises the question of which terms and conditions are applicable – those in the offer letter or those in the relieving letter.
Considering the verdict of the Delhi High Court, the conditions of the relieving letter are legally binding on the employee. Even if the non-compete clause had been included, it would have been rendered invalid in light of the court ruling. I suggest accepting the relieving letter as it is for the time being. Later, contact the Labour Office in the area where your company is located. Explain your situation to the labour officer. Ask them to send a letter to your former employer, requesting them to issue a fresh relieving letter without the non-compete clause. For now, go to the labour office and file a complaint against the previous employer. We will have to wait and see how much help they can provide. Thank you.