Study On The Economic Compensation System Of Competition Restriction

The optimal allocation of human resources brings great benefits to modern enterprises,but it is also inevitable to bear the risk of leakage of trade secrets caused by the employee’s job-hopping.It is one of the effective means to prevent this situation from signing non-compete agreement between the enterprise and the employee.Non-compete agreement gradually spread to various industries in recent years,not only limited to high-tech industries,and no matter what kind of job,laborer is these companies will require workers to sign the non-compete agreement.They are always requested to sign the post-employment covenants not to compete by their employers.However,if the laborer has the duty to restrict his employment,the knowledge and skills acquired in his original work will have no chance of exerting his ability,which is contrary to the protection of the worker’s right to freedom of work as stipulated in the Constitution.The compensation for non-compete agreement makes up for the losses suffered by employee also relieve the contradictions of the interests between employees and employers.However,because of the deviation in understanding the mechanism of compensation for non-compete agreement,the local regulations are quite different and there is often a phenomenon of different judgments in the same case.The system of non-compete agreement in China has a started relatively late The Labor contract Law which came into effect in 2008 has stipulated the mechanism of compensation of non-compete agreement for the first time.However,the regulation of mechanism of compensation for non-compete agreement is very simple.A lot of problems did not make specific provisions.After that,though the ’No.4 Labor contract Law judicial interpretation’ has provided further provisions for the mechanism of compensation.It is still sketchy.And many of the issues which have a risen in practice have not been resolved.In particular,the question of whether the non-compete agreement on compensation clauses is effective has a great difference in practice and theory.This paper based on practical cases and theories of domestic and foreign theories study the system of economic mechanism of compensation for non-competition in order to find a reasonable solution.The first introduces the concept,properties and characteristics of mechanism of c ompensation for non-compete.Analysis of the theory of mechanism of compensation f or non-compete The second the paper outside mechanism of compensation for non-compete to contrast the shortage of the mechanism of compensation for non-compete in China.The validity of the economic compensation package is not clear.The standard of economic compensation is unreasonable.The payment method of economic compensation is not clear.The third through the analysis of case study in several key problems in mechanism of compensation for non-compete.The proportion of compensation and liquidated damages is not reasonable.Finally,it analyses the rationality of the law in combination with judicial practice and puts forward suggestions for perfecting the problems existing in the mechanism of compensation for non-compete.