A Study Of Non-Competition After Demission In Trade Secret Protection

The rapid development of knowledge-based economy brings about the accelerative fluxion of factors of production. In recent years in China, as economic restructuring, quickly changing the mode of development, as well as industrial upgrading after acceding the World Trade Organization, the emerging enterprises, especially high-tech enterprises mushroom. The inter-enterprise competition for human resources intensified. The flow of competent people is the inevitable result of social and economic development. In turn, it is conducive to rational allocation of resources and it promotes economic development. The complementary virtuous cycle between talents and the social development is an important symbol of the modern social progress.However, opportunity is always accompanied by challenges. The "quit" behavior of personnel also brings the crisis to the enterprise and the fair market competition order. The history of developed countries and the reality of our country remind us that the most important channel of the loss of trade secrets is"job-hopping". The ex-spouse takes away trade secrets; either creates his own company or joins in the competitors'company with them. Therefore, the trade secrets which have agglomerated the core competitiveness of the company have been leaked.A typical court case of Shandong Food v. Ma Daqing, which is about the original company accused that the ex-spouse had deprived its business opportunities, arouses the author's interest in considering the problem of how to protect enterprises'trade secrets after core employees leaving. In this paper, this case is a key clue for the author to analyze the major disputes arising from this case and the theoretical issues behind the dispute. First of all, based on the followed two main contentions of the case, using the method of combining theoretical analysis and reviewing the case, the author will analyze the theoretical issues of trade secrets and the principle and legal regulation of non-competition after demission,. And then, according to the practical problems exposing from the case, the author will make some suggestions on how to improve non-competition after demission system in trade secret protection in our country. The paper is divided into five parts:In the first part, the author will review the typical case of Shandong Food v. Ma Daqing, so that to summarize main points of the judgment and point out two main controversial points from the first and second trials which are the identification of trade secret and how to protect commercial confidentiality after employees leaving. Moreover, it will further analyze the dispute between trade secrets and employment rights behind the case and will indicate that an effective way of coordinating the conflict of the two legitimate rights and interests after the employees leaving is non-competition after demission system.Following the first contention of the case, in the second part, it will describe the basic issues of the trade secrets theory. Firstly, it will analyze the legal connotation of trade secrets and explain the definition, constitutive requirements and the scope of the commercial secrets. Secondly, it will indicate a few de jure issues about the legal protection of trade secrets. Thirdly, based on the theory discussed above, the author will give his own view about the identification of trade secrets in the case of Shandong Food v. Ma Daqing.The third part follows the second contention and the author will discuss the theory of trade secret protection after employees leaving (ie. the system of non-competition after demission). In this section, firstly, it will describe the general principle of non-competition. And then, it will explore the legitimacy and institutional value of non-competition after demission. After that, according to the functional characteristics of the system, it will further consider the restrictions of this system. And finally, the author will indicate the basic theoretical issues of non-competition after demission based on the typical case. The fourth part will describe the expression of non-competition after demission in the substantive law. Specifically, it will firstly compare this system in different countries on comparative law. Further, it will generalize and study the provisions of non-competition after demission in our current laws and regulations, especially the relevant stipulations in the"Labor Contract Law". Finally, it will point out the situation and problems of this system in our country.The fifth part will discuss how to solve and improve the existing problems of the non-competition after demission in China which is exposed in this typical case. The author will give his own recommendations.