Key Points
MUMBAI : Recent weeks have seen the Indian IT services industry raking up no-poach clauses when it came to senior employee exits..
The two leading IT services exporters alleged breach of contract when their senior talent joined rival company Cognizant..
This is because Section 27 of the Indian Contract Act, 1872, forbids any agreement that restrains anyone from practising a lawful profession or trade, and such clauses in employment contracts are not legally enforceable..
According to recruiters who are working on similar contracts, companies may hold back phantom stocks or restricted stocks if these agreements are broken but cannot withhold full and final settlements...
According to a search firm head, foreign courts, in some cases, have passed restraining orders on senior executives who join a rival firmthey are restrained from hiring from their former employer...
