Infosys noncompete clause sparks complaint from labor rights org A labor rights non-profit has filed a complaint with India's Ministry of Labor alleging IT services giant Infosys has subjected its employees to an illegal noncompete clause. Within the contracts for onboarding employees is a stipulation, according to Nascent Information Technology Employees Senate (NITES), that staff may not …
If it's already illegal, then what's the problem ?
The employee leaving goes to a competitor, Infosys sues alledging the non-compete clause, judge throws it out of court. End of story.
Logically, the lawyer Infosys contacts will say so and not take the job.
Why is this an issue ?
The Indian legal system is very slow, sometimes corrupt at the lowest level of courts and a case in unlikely to be resolved sooner the restriction period expires.
Infosys has the resources and incentive to sue but companies recruiting staff will want an employee not a lawsuit so the threat of legal action may suffice to prevent poaching. The competitors named may have the resources but their appetite for taking on InfoSys will depend on how many Infosys staff they require.
More likely than an individual employee or new entrant to the market challenging the practice would be for a regulatory body taking this on as anti-competitive.
Most likely is that, like most employee rights, the employee is simply not able to challenge the illegality.
The Indian legal system is very slow, sometimes corrupt at the lowest level of courts and a case in unlikely to be resolved sooner the restriction period expires.
Infosys has the resources and incentive to sue but companies recruiting staff will want an employee not a lawsuit so the threat of legal action may suffice to prevent poaching. The competitors named may have the resources but their appetite for taking on InfoSys will depend on how many Infosys staff they require.
More likely than an individual employee or new entrant to the market challenging the practice would be for a regulatory body taking this on as anti-competitive.
Most likely is that, like most employee rights, the employee is simply not able to challenge the illegality.
Here the labour rights organisation may do the job if it has enough resources to fight it through the legal system.
Similar rule in UK that stops contractor from taking up a position with end client or end client's client.
This is even if the Agency has been shown the door, I have rejected a number of contracts with agency's.
As I had previous contracts with the end client already, house phone and a gov department.
These are just illegal anti competition rules, but a small one-man company cannot compete when you need the work.
"Similar rule in UK that stops contractor from taking up a position with end client or end client's client."
Under EU legislation I think that would count as an "unfair restraint of trade" and the clause would be unenforceable. (Not sure after 'Brexit' though.)
The clause as stated in the article does seem extreme. Sounds like if you joined Infosys 15 years ago, spent two days initially working for customer Xyz, then never worked for them again for the next 15 years, you would still be barred from accepting a job there.
When I was 'let go' by one employer, the clause in my contract said that I could not work for ANY of their clients for a year. The company administrator admitted that clause was not enforceable. Had they insisted on enforcing it, I would have demanded a complete list of their clients, and a year's salary to compensate me for not being able to work for a year. They gave me three month's pay and told me to stay home instead. As I was about to resign anyway (they had put me under a 'manager' in whom I had absolutely no faith at all), I reckon I got a good deal.
My first job had a clause like this. After I left, my last payslip included a copy of the contract (that I never signed) with the relevant part highlighted in neon yellow. I could not do any work in the same sector for a period of three years.
I responded by sending her a bill for three years of wages and a rather shirty letter pointing out that if my contact is to be considered still in force, then I expect the appropriate remuneration. Three rather incoherent nasty letters came back, and finally a post card that said "contact terminated, disregard all, goodbye".
It's depressing what employers think they can get away with in the small print.
When I was working on contract for one of the giants in the printer business, about 20 years ago, my contract had a clause about not working for their customers for a year after I left.
I pointed out to them that pretty much most companies will probably have at least one of their old or current printers around, and that will prevent me from working anywhere pretty much.
There were some embarrased looks given when I pointed this out to them.
I did stay there for a couple of years, and yes, my next job was also a customer of theirs. Was waiting to see if there was anything from them, but nothing happened.
My current employer tried to slip a non-compete clause into an "updated" contract that they sent me to sign. Thankfully, I'm not given to signing things that I haven't read at least twice and spotted the new clause. When I queried it, they tried to explain it away as "standard practice", to which my response was "it's also standard practice to include a golden handshake which covers the loss of salary for the non-compete period, and I can't find that in the contract, so I won't sign it".
In the end, they deleted the clause, but the whole thing left me with a nasty taste in my mouth and even less respect for the HR department than I had before their attempt to pull the wool over my eyes.
(Posted as anonymous coward for obvious reasons.)
When I was offered 'voluntary redundancy', it turned out that HR could not find their copy of my contract, but I still had the original in my filing system (in the file marked "Contract"- yes I am a nerd).
Let's just say that I was COMPLETELY HONEST and ABOVE BOARD in my explanation of the details of redundancy payments and notice periods etc. located therein shall we?*
As for heyrick: "contact terminated, disregard all, goodbye", actually you generally have clauses, such as non-disclosure agreements that do survive termination of employment. I would never break one of those, mostly because I cannot actually remember anything, but also because some of those customers have guns, and people who really do know how to use them.
*(Actually I was, but I did get them to acknowledge my notice period was 2 months, not 6 months, so I got a lot of tax back on the non-PILON part of my redundancy payment.)
In the early to mid 90s, I was working for a company in Florida that made smart payphones (acted like a phone, based on a microcontroller).
The technology used was ancient, even by the standards of the time (the microcontroller was based on the 6502) and 2 wire to 4 wire conversion has been around since telephones were invented. There was also some voice playback.
When I left (I was let go), I went to a startup doing much the same but with up to date technology with features not present on the old stuff (2400 bps modem for updates, for example, which is surprisingly difficult to achieve in discrete components) and I received a snottogram from the previous company lawyers (who were actually investors in the company - no conflict of interest there, then).
Basically tried to tell me that the non-compete (which I had signed) prevented me from working within the industry for 2 years. I will always remember the final line "conduct yourself accordingly".
I consulted a friendly lawyer (one of the investors at the startup) and it turned out that (at the time), non-competes could only be enforced for very limited reasons. In the technology area, they would have to show that they taught me some super proprietary knowledge I could not have attained elsewhere, which, given the technology they were using, meant they didn't have a leg to stand on.
So they got a snottogram back from the my lawyer stating that rather the reverse was true; I had brought knowledge to them that they did not previously have, that the technology they were using was decades old and therefore well known in the industry in general and that the fundamental operation of the device was dictated by having to connect to a phone line. Just for good measure, the letter ended "conduct yourself accordingly".
Never heard from them again.
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