Infosys Bans Ex-Employees To Work With TCS, Wipro, Cognizant, IBM, Accenture; Complaint Filed By NITES

Infosys, one of the top 5 Indian IT firms, has imposed a new rule for all resigned employees: They cannot work with the ‘named competitors’ for 6 months, if their clients are the same as that of Infosys.

Infosys employees who have resigned, or are planning to resign are worried over this new rule, because this curtails their options once they resign. 

Prominent IT Employees union: ??Nascent Information Technology Employees Senate or NITES has filed a complaint against this unfair rule.

Infosys To Resigned Employees: You Can’t Work With Competitors!

In the offer letter for new employees, Infosys has added a new, very strict clause, which states:

“n consideration of the above, I agree that for a period of six (6) months following the termination of my employment with Infosys for any reason, I will not:

a. accept any offer of employment from any Customer, where I had worked in a professional capacity with that Customer in the twelve (12) months immediately preceding the termination of my employment with Infosys;

b. accept any offer of employment from a Named Competitor of Infosys, if my employment with such Named Competitor would involve me having to work with a Customer with whom I had worked in the twelve (12) months immediately preceding the termination of my employment with Infosys.”

Further, the company has named these 5 major IT firms as their named competitors:

TCS, IBM, Cognizant, Wipro and Accenture.

Hence, in layman terms, in case any Infosys employee resigns, then for the next 6 months, they are banned from working for TCS, IBM, Cognizant, Wipro and Accenture, in case they have the same clients as that of the Infosys employees in the last 12 months.

Why Has Infosys Done This?

Entire IT industry is right now experiencing severe attrition, and there is a talent war going on. 

We reported this week that more than 80,000 Infosys employees resigned in the last 3 months, as the attrition rate soared to 27% for them.

Same is the case with other leading IT firms as well.

Infosys wants to stop this, and this imposition of the new rule clearly indicates their desperation to stop employees from resigning.

Complaint Filed By NITES

After receiving complaints from Infosys employees, NITES or Nascent Information Technology Employees Senate has filed a complaint with the Ministry of Labour & Employment.

The complaint has been filed by Harpreet Saluja, President, Nascent Information Technology Employees Senate NITES, which states:

“The restriction contained in the Employment letter which is mentioned above is clearly in restraint of trade and therefore illegal under section 27 of the Contract Act. 

It is not seeking to enforce the negative covenant during the term of   employment of   the employee but after the termination of his service. If the agreement on the part of the employee puts a restraint even though partial, it is void, and, therefore, the contract must be treated as one which cannot be enforced. 

The clause of covenant being imposed is to operate after the termination of services & is too widely worded, & hence the company should be stopped from enforcing it. The employee’s covenants should be carefully scrutinized because there is inequality of bargaining power between the employer & employee, indeed no bargaining power may occur because the employee is presented with a standard form of employment contract to accept or reject. 

At the time of the employment agreement, the employee may have given little thought to the restriction because of his eagerness for a job hence the employment contract of the Infosys Ltd is “tempt improvident persons, for the sake of present gain, to deprive them of the power to make future acquisitions and expose them to imposition and oppression”. 

The contract of employment is likely to affect the employee’s means or procuring a livelihood for himself and his family. The restraint being put on employees is greater than necessary to protect the employer, is unduly harsh and oppressive to the employee. We have submitted an official complaint to the Labour Ministry and Ministry of Corporate Affairs for appropriate actions & issuing necessary orders to Infosys Ltd. for removing such illegal, unethical and arbitrary clause from the employment agreements.”

We will keep you updated, as more details come in.