Identification Of The Effectiveness Of The Non-competition Restrictive Covenant

The competition between enterprises and countries today is centered on talent competition.Signing a non-competition restrictive covenant with workers is an important means for enterprises to protect their commercial secrets and resources.If the business secrets and commercial resources of the employer's party protected by the non-competition restrictive covenant system exceeds a certain limit,the balance of the interests of employers and employees would be broken,which may greatly harm equal employment rights,break market economic order and cause the loss of social public interest.If workers' interests are favored,employees may arbitrarily violate the non-competition restrictive covenant whereas the business secrets that are the core competitiveness of the enterprise will be infringed.In addition,the legal benefits protected by the non-competition restrictive covenant system shall also include social public interests.Therefore,when determining the effectiveness of a non-competition restrictive covenant,the public interest should be maximized while coordinating the interests of employers and employees.However,China's non-competition restrictive covenant system has begun relatively late and thereby theoretical research is not deep,relevant legislation is not perfect and the core problems in the system are neglected,which also leads to the imperfect judicial practice,and even the same type of cases of different judgments.This article studies the core issue of the non-competitionrestrictive covenant system——the identification of effectiveness of the non-competition restrictive covenant,finds out the problems in legislation and judicial system,discusses the problems and tries to provide a solution to improve the current situation.This article is divided into four parts.The first part is about the theoretical level of identification of the effectiveness of the non-competition restrictive covenant.It mainly introduces that the essence of the identification is in accordance with the balance of its effectiveness and discusses that the essence of the non-competition restrictive covenant is the interest coordination mechanism from analyzing the three parties which are original employers,workers and new employers.It also specifically analyzes the game and conflict among employers' right to commercial secrets,workers' equal employment rights,and the public interest.The second part analyzes the "Labor Law","Labor Contract Law","Interpretation of Several Issues Concerning the Application of Law in the Trial of Labor Dispute Cases(4)"(hereinafter referred to as " Interpretation of the Application of Law in Labor Dispute Cases(4)"),the provisions on non-competition restrictive covenant system in regional laws and regulations,judicial documents and the problems arising in the identification of non-competition restrictive covenants from a legislation level as well as the effectiveness of non-competition restrictive covenants when different regions have not agreed on the financial compensation.The third part is the focus of this article.It analyzes and studies the factors affecting the effectiveness of the non-competition restrictive covenants.More specifically,it analyzes from six factors which are subject,object,region,occupation scope,reasons for the termination of labor contract and economic compensation and provide solutions regarding problems arising from these factors to attempt to solve the problems in the identification of non-competition restrictive covenants.In addition,given that the Labor Contract Law and Interpretation of the Application of Law in Labor Dispute Cases(4)have not regulated the relationship between the financial compensation and the effectiveness of the non-competition restrictive covenant.Thisarticle also sums and analyzes the discrepancy between the financial compensation and the effectiveness of the non-competition restrictive covenant which is divided into“invalid theory” and “valid theory” from a theoretical perspective and thereby raises the author's view,analyzes the problems of the determination and payment of financial compensation,and attempts to propose corresponding solutions.The fourth part is the conclusion.According to the previous discussion,it provides some suggestions for improving the identification of the effectiveness of the non-competition restrictive covenant,including the unified scrutiny criteria for the identification and a confirmation that the non-competition restrictive covenant without an agreement regarding financial compensation is valid.