IT executive exodus: a primer on breach of contract, lawsuits

economictimes.indiatimes.com:

non-compete clauses as part of employment contracts by employers while making top management employee appointments. Yet lawsuits against employees for contract violations are not a frequent phenomenon in India.

What happened?

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IT major Wipro has filed at least two legal complaints against its former senior executives including former senior vice president Mohd Haque and former CFO Jatin Dalal, who has already joined Cognizant this month, for breach of his employment contract with Wipro and violation of rules. Meanwhile, Infosys sent an official communication to Cognizant accusing the company of unethical poaching tactics. The US-based Cognizant has been hiring several top executives from its competitors, especially Wipro and Infosys.

What do experts say?

Four legal experts told ET that while several companies have sued even lower-level employees, the enforceability of non-compete agreements is not very strong in India. Such an agreement violates Section 27 of the Indian Contract Act due to the possibility of depriving someone of their fundamental right to earn a living. Further, an employee's fundamental right to life and personal freedom guaranteed by Article 21 of the Indian Constitution are frequently upheld above the terms of the employment agreement. “Typically, judgements in non-compete clauses are largely in favour of employees. In general, individuals win 70% of the time while employers win about 30%,” said Hyderabad-based lawyer Dishit