Research On The Judicial Application Of Non-competition System In Labor Contract Law

In order to protect commercial secrets, part of employers sign the non-competition agreement with their employees. The flow of talent are increasingly frequent with the market economy developing, and divisions in china’s job market naturally emerged. In 2008, the non-competition system has officially signed into the Labor Contract Law. In the interest of labor, the Supreme People’s Court published the judicial interpretation to improve the inadequate non-competition system. However, the rules still remains in the level of principle and lack of careful consideration. The defect of legislative technology made incomplete expression of the idea of legislation which made non-competition system remains some problems, especially in the aspect of economic compensation, liquidated damages, and the scope of restriction of competition. Firstly, force of agreement is still in suspense if there is no compensation in the non-competition agreement. Also there is no compensation standard or mode of payment. Secondly, the uncharted nature of liquidated damages made some court confuse the relationship between trade secrets and protect method. Last but not least, the Labor Contract Law didn’t set boundaries of the scope of restriction of competition which would lead employer abuse their right.We should protect the basic rights of employees, at the same time, maintain the public interests and orderly market competition. Non-competition agreement should be regard as invalid if there is no economic compensation or below the minimum standard. Define the compensatory liquidated damages is also important to juridical practice. Non-competition range setting should take into account a number of factors so that we can balance the interests of enterprise, worker and society.