Nowadays all competition is essentially a battle for talent. In practice, however, it is very tough to strike a balance between the legitimate interests of employers to protect their competitiveness on the one side, and the freedom of employees to choose/change their jobs. Based on his relevant experience the author summarizes below some basic issues for reference when drafting or negotiating a non-competition agreement under Chinese employment law regime.

I. Definition of non-competition agreement

• An employer may conclude a written non-competition agreement with an employee under a duty of confidentiality such that after the termination of his/her employment contract the employee shall
  • neither work for another employer who produces or operates the same kind of products or engages in the same kind of business as his/her former employer in a competitive manner,
  • nor start his/her own business to produce or operate the same kind of products or engage in the same kind of business.

II. Qualified employees

• An employer may only enter into a non-competition agreement with its senior managers, senior technicians and other employees under a duty of confidentiality.
• As the Chinese laws and regulations rarely define the qualified employees in individual cases, the employer has to save the relevant evidence to prove that the employee concerned is a qualified employee with whom a non-competition agreement may be concluded. As evidence the employer may for instance consider...

Read Full Story: https://news.google.com/__i/rss/rd/articles/CBMiU2h0dHBzOi8vd3d3LmxleG9sb2d5L...