Exclusive: Amidst Its Battle With Unacademy, Allen Sues Former Teachers For Breach Of Service Agreement

In yet another twist in the ongoing battle between Allen Career Institute and its former faculty members, Allen has filed a plea under Section 9 of the Arbitration and Conciliation Act against its 20 former teachers in Jaipur Commercial Court. 

Allen alleged that the teachers breached the service agreement by not serving the 4-month notice period after the resignation and not completing their service tenure. Besides, it also alleged infringement of some confidential material, as per the plea, which was reviewed by Inc42.

Allen filed at least 20 pleas during the last week of June before the Jaipur court. The plea said that teachers leaving Allen “has led to abandonment of students” in mid-sessions when crucial exams are underway.

It also said that Allen has initiated disciplinary action against the teachers in the light of “illegal and unauthorised absence from the institute” 

Sources informed Inc42 that none of the 20 pleas filed by Allen has been dismissed  and that the  Court has passed a restraining order against all the 20 Respondents.

“The Court has passed an interim order in favour of Allen in all 20 petitions restraining the Respondents from using any IP, trade secret, study material of Allen. Disciplinary Proceedings against the said faculty members are under underway for leaving the students in lurch,”  a source privy to the proceedings said.

During the last hearing on June 30, the teachers contested Allen’s pleas on the grounds of non-enforceability of several clauses in the employment contracts, which according to them are against the basic constitutional right of the employees, the sources told Inc42.

The teachers further told the court that Allen did not give a copy of the contract to them at the time of their appointment.

The next hearing in the matter is scheduled for July 13.

Allen is being represented by Singhania &Co through Rohit Jain, Managing Partner

Inc42 has reached out to Allen for a statement. The story will be updated as and when the company responds.

The Battle For Coaching Supremacy

Notably, Allen’s chief Brajesh Maheswari last month released an emotionally charged video statement, saying that some of the top teachers of the test prep institute were being poached by edtech giant Unacademy in Kota. 

In the video, Maheshwari said that the teachers who join rival Unacademy would be blacklisted and Allen would take strict action against any “rival trying to poach teachers”. He further said that few teachers leaving the institute, which has over 11,000 employees, would not impact its functioning.

Sources privy to the development had earlier told us that Unacademy was in the process of arranging police protection for the newly recruited teachers.

Earlier, Inc42 also reported that after the exodus of at least 40 top educators from Allen to Unacademy, the focus has shifted to enrollment of students in Kota, with some of the teachers facilitating the students in joining Unacademy.

The receding impact of the Covid-19 pandemic led to the reopening of schools, which hit the edtech industry. The edtech startups had received a boost during the pandemic, but the reopening of schools led to a decrease in demand. Consequently, edtech unicorns like BYJU’S and Unacademy have forayed into offline learning, offering teachers 2x-3x pay hikes with annual income in the range of INR 1 Cr–INR 10 Cr.

Conservative estimates by Inc42, based on conversations with industry sources, suggest that Allen’s Kota centre has revenue of INR 1,500 Cr annually, with average enrollments somewhere around 1 lakh. In May 2022, Allen said it had 2 lakh students all over the country, with half of them in Kota alone. 

In May this year, the test prep institute raised INR 4,500 Cr ($600 Mn) from James Murdoch and Uday Shankar-backed Bodhi Tree Systems.