Allen sues 20 former educators for alleged '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 34 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.

On July 1, the Jaipur Commercial Court, however, dismissed Allen's plea against five of the 20 educators. The five contested Allen's claims, saying the clauses were against the basic rights of employees.

They also denied signing an employment agreement with Allen and said they were not informed about such contracts. These five educators joined rival Unacademy after leaving Allen.

The case will next be heard on July 13.

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.

"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.

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 is moderates.