How to structure non-compete clauses
October 18, 2012 | BY
clpstaff &clp articlesDespite China's Employment Contract Law offering uniform rules over non-compete clauses, employers are still unsure of the best way to structure these agreements and how to deal with rules that vary from province to province
The PRC Employment Contract Law (中华人民共和国劳动合同法) was released in 2007 and became effective in 2008. For the first time, the Law offered employers in China the chance to use non-compete agreements with their employees.
The Law has strict requirements, however, and employers are often reluctant to take notice of these requirements or ensure their agreements fully comply. For example, non-compete agreements can only be negotiated with certain employees like senior management or technicians.
Employers also have to provide compensation and the non-compete period after termination of employment can be no longer than two years. Companies can require employees to pay damages for breaching the non-compete agreement.
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