Tag Archives: non-competition agreement

Application of Laws on Non-Competition Clauses (Part II)

(By Lisa Li) The following is Part II of the topic on application of laws on non-competition clauses from perspective of Chinese employment law.

1.Termination of non-competition agreement

Article 4 of the Judicial Interpretation IV stipulates that if there are non-competition obligations and compensations agreed in the employment contract or confidentiality agreement, the employer’s failure to pay the compensations for three months will entitle the employee to request terminating the non-competition agreement. In accordance with the wording of these provisions, the employee has the right to request terminating the non-competition agreement, however the non-competition agreement shall not end automatically. However, local practice varies from place to place; even the same court rendered different judgments for similar cases according to the search conducted by the author.

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Was Tencent’s Unverified Non-Competition Agreement Illegal?

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(By You Yunting)  Abstract: Many of Tencent’s non-competition contracts, recently reported online are likely not real due to obvious invalidity. If the contracts were genuine, one might wonder about the intelligence and morality of Tencent’s managers and officers. These agreements are arrogant, domineering, selfish and largely ignorant of relevant laws. It is hard to imagine how these contracts could come from a listed company with billions of dollars. Additionally, Tencent could possibly be required to pay large amounts of compensation to departing employees in order to fully comply with the relevant laws.

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