Is there any legal protection against employee poaching by vendors and distributors?
VINAYA
— The Indian constitution considers the right to earn one’s livelihood a fundamental right, hence there is no law in the country that can prevent a professional from joining and working for another company. The question of legal protection therefore does not exist.
However, as a precautionary measure, companies sign up contractual agreements with employees that require them to serve a certain notice period or pay a penalty in case the employee is not in a position to serve the agreed notice period. Many companies also put in a non-compete clause that prevents their employees from joining a competing organization for a certain period.
However, these employee contracts don’t usually stand the test of law simply because the law believes that no employment contract can put any kind of restraint on individuals (employees) to earn their livelihood.
Despite this, it’s prudent to sign such contracts with employees. They may not be very effective legally, but they do serve as a psychological barrier. The agreement must clearly mention the notice period, and the penalty in case of premature exit.
With respect to poaching by vendors and customers, it is wise to have non-poaching clauses as part of the standard agreements you sign with them while initiating a partner or customer contract. In cases where there is a non-poaching agreement, you could claim material damages against the party that breaches the agreement.
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