An Empirical Study On The Identification Of The Validity Of The Non-competition Agreement

The Non-Competition Agreement(NCA)is to balance the conflicts between the employer’s trade secret right and employee’s liberal employment right.The basis of the balance depends on the consideration agreed by two parties,which is in the premise of the trade secret shall have an insurable interest and the employee shall be obligated to protect it.Under this,two parties agree on the consideration,the basis of which is that the employer is entitled to ask the employee to perform non-competition obligations and relatively the employee is entitled to ask for the economic compensation stipulated by the agreement and law,making the NCA legitimate and binding.However,according to the statistical results,the interest of the consideration agreed by two parties is imbalance.In the cases that the employees were sued by the employers because of their breach of agreement,almost no employer lost the case.The only defeated ones are due to the payment of the economic compensation,leading to the fact that the the economic compensation has been already difficult to affect the effectiveness of the agreement.This paper engages in empirical research on the basis of case statistics and finds out the NCA validity problem by analyzing the labor contract’s attribute of the NCA and the foundation of the consideration,providing solutions for its validity.This paper consists of three parts: introduction,main body and conclusion.The introduction discusses the current situation and realistic problems of the NCA,introducing research present situation,significance,techniques and inadequacies.The main body is divided into five parts.The first part presents the current situation of the judgements about the NCA in the form of data,through the case statistics.Fistly,there is a high proportion to affirm the agreement effective.Secondly,the employees have a high default rate.Finally,as one of the foundation of the consideration,the payment of economic is extremely unfavorable to the employees.The second part is the reasons of the current situation of the NCA.The main reason is the current judicial interpretations are inclined to the separation of economic compensation and the effectiveness of the NCA,considering that the effectiveness shall have the base of claim right,which is more beneficial to employees but leads to the mechanical application of the current law by the judges,resulting in the economic compensation can not become the justifications of the employees.Under this,the foundation of the consideration is absent and the employees fall into the NCA system dilemma.The third part identifies the value basis of the validity of the NCA and analyzes the differences between the NCA and the general civil contract.It shall be a supplement to the labor contract,reflecting the value of the labor contract law.The fourth part clarifies the nature of the NCA and the foundation of consideration,as well as the the identification of its validity.The nature of the NCA is the supplementary provision of the labor contract,emphasizing the autonomy of will under the public power,tending to protect the employees,substantially reviewing the contents of the agreement.So we should be cautious and strict with the validity of it.The fifth part is the solutions of the identification of its validity.Firstly,We need to restore the consideration function of economic compensation.As the foundation of the consideration,economic compensation is closely related to the validity but not separated.Secondly,we need to give unbalanced protection to the employees and distinguish the NCA from the general civil contract,judging the validity by the value of the labor contract law and restricting its validity and application.Finally,the conclusion reiterates the institutional function of the NCA,that is to balance the interest of both employers and employees.It is necessary to apply it carefully and do not abuse it as a legitimate tool against the employees.