Allen sues 20 former educators for 'breach of contract'

Allen Career Institute has sued 20 of its former educators for alleged breach of employee agreements, sources said, in yet another indication of a fierce fight for offline space between edtech companies and traditional coaching institutes.

In the last week of June, Allen, a leader in test preparation space, filed cases under Section 9 of the Arbitration and Conciliation Act in the Jaipur Commercial Court, alleging a breach of contract as the educators did not serve a notice period after tendering resignations, sources said.

The contract didn’t allow educators to resign for three years from the day of taking up the job, Allen said in its petition, a copy of which was reviewed by Moneycontrol.

If educators disassociated themselves from Allen, they were liable to pay damages—two times their total earnings—to the company, sources cited the company as saying.

Inc 42 reported the development first.

Also read: Poaching and coaching in Kota: Race for $500 million education hub heats up

Educators have denied signing an employment agreement with Allen and said they were not informed about such contracts.  The case will next be heard on July 13.

Unacademy and Allen were yet to respond to queries sent by Moneycontrol.

Sources also told Moneycontrol that two weeks prior to the court summons, more than 40 educators who had quit to join Unacademy were sent multiple notices by Allen, demanding they appear before an internal committee to review the "breach of the agreement".

Moneycontrol reported in June how educators in Kota were getting poached by new-age edtech companies, including SoftBank-backed Unacademy, which had opened physical tuition centers in the town. Forty Allen educators have joined Unacademy.

The entry of these new-age edtech companies threatened the dominance of traditional coaching centres of Kota, the country’s tuition hub, such as Allen, which are concerned about losing market share.

Moneycontrol had also written how Unacademy and the educators it poached were getting threats from Allen. In a video shared with employees, Brajesh Maheshwari, one of the four founders of Allen, warned educators who left recently that they would be blacklisted.

“Aaj se sharafat ki duniya khatam, jaisi duniya waise hum (from today, the world of decency ends, we will behave the way the world behaves,” he said.

Unacademy also sought police protection for its employees and educators, Moneycontrol had reported.

The aggressive poaching of educators in Kota in Rajasthan is happening at a time when edtech companies are laying off thousands of educators to cut costs as demand for online education solutions moderates.

Clarification: Moneycontrol has updated the story as Allen's counsel reached out to us after the publication stating that none of the 20 petitions were dismissed by the Jaipur Commercial Court and all the 20 cases are ongoing. An earlier version of the story said that five of the 20 petitions were dismissed by the court.