Comparative Study Of The Mainland And Hongkong Noncompete System

The Non-compete rules in Mainland China have made certain progress since its accession to WTO. Yet these rules remain over broad and vague for most part thus often get abused, which not only put unreasonable restraints on the disadvantaged employees' legal rights, but also disturbs the orderly and fair market and compromises public interest on the whole.In recent years, as the economic communication between Mainland and Hong Kong has deepened constantly, in particular, the adoption of Quality Migrant Admission Scheme in Hong Kong, frequent cross border labor movement has become common phenomenon. Which has built quite a caseload concerning breaches of non-compete agreement and commercial confidentiality clauses. However, due to the broad Non-compete rules of the Mainland and the divergences in the general legal system and in specific non-compete rules, the courts in two regions may adopt distinct practices when dealing with cross border breaches of non-compete agreement and commercial confidentiality clauses. As we dig deeper in Hong Kong's case law concerning non compete rules, it's not hard to realize that the strict scrutiny test that Hong Kong judges apply when deciding non-compete and commercial confidentiality cases provides us with a reasonable reference to prevent non-compete rules being abused.This dissertation based on the interpretation of the judicial precedents concerning non-compete rules in Hong Kong, attempts to compare the differences in non-compete rules between Hong Kong and Mainland China, gives a thorough analysis on the practices of public interest protection and employee rights protection in Hong Kong's non-compete rules, makes several proposals for the improvement of non-compete rules in Mainland China. This dissertation has five parts:The first chapter gives a brief introduction on non-compete rules in Mainland and Hong Kong. Which includes the illustrations of the origins and developments of the non-compete rules in both regions, the analysis of the economic bases and external environment for the rules to exist, the historical backgrounds in which the rules rose, and a brief conclusion on the necessity and legal value of non-compete rules.The second chapter mainly describes the reforms of Mainland China's non-compete rules before and after its accession to the WTO. This chapter follows the law-making process of commercial confidentiality rules in Mainland before and after its accession to the WTO, compares the roles commercial confidentiality has played in economic development and different evaluations that social circles gave before and after Mainland's accession to the WTO, summarizes the features of Mainland's commercial confidentiality protection before and after its accession to the WTO, and concludes that commercial confidentiality protection is a fundamental step for non-compete rules to exist.The third chapter focuses on the different approaches Hong Kong and Mainland adopted on deciding the validity of non-compete agreements. It mainly analyzes the validity elements of non-compete agreements in Hong Kong and Mainland, which ranges from purposes, scope(subjective, professional and geographical), to public interest protection and compensation. Further, it compares the different scrutiny standards between Hong Kong courts and Mainland courts while deciding the validity of non-compete agreements and evaluating the aforesaid elements. And then gives a succinct conclusion about the divergences on public interest protection and labor rights protection between Hong Kong and Mainland. This conclusion underlies chapter five's topic.The fourth chapter discusses different liabilities for breaching non-compete agreements in Hong Kong and Mainland. It mainly analyzes different liability forms according to the non-compete rules in Hong Kong and Mainland. And then it explains the advantages and shortcomings of liquidated damages, compensation for loss in Mainland and injunction in Hong Kong and concludes that Mainland should borrow experiences from Hong Kong's strict scrutiny procedure for injunction to improve its pre-litigation security rules.The fifth chapter discusses the possibility of borrowing experience from Hong Kong. It first gives a detailed illustration of different value orientation in public interest protection and labor rights protection rules in Hong Kong and Mainland. And then based on the strict scrutiny standards that Hong Kong courts applied while deciding on public interest protection and non-compete agreement cases, it makes several proposals to improve Mainland's non-compete rules. Specifically, it suggests several amendments to article 23 and article 24 of Labor Contract Law and article 22 of Labor Law, hoping to enhance public interest protection and give employee favorable protection in non-compete rules.