Prohibited Or Not Prohibited, This Is A Problem

Convents not to compete usually restrict former employee from seeking a new employment that is competitive with the former employer. It's one of the main ways used by enterprise to protect its business secret. With the increasingly close economic exchanges and the flow of talents in great number, convent not to compete begins to play an important role in China's market economy, but, at the same time brings problems with it. Through the way of case study, this paper points out difficulties met by the enterprises of China when signing covenants not to compete. Then from the standpoints of protecting business secret, this paper carries out a comparison among business secret, tangible assets and other intangible assets, and draws the conclusion that it is reasonable to protect business secret with convent not to compete. But every coin has two sides; it is the same with convents not compete. If let enterprises enter into non-competition agreement with employees at will, the rights of employees will be sacrificed and the public will have to pay the bill for enterprises. So it is necessary to restrict the use of convent not to compete. By summarizing the theories of U.S., the author lists seven criterions to judge the reasonableness of a convent not to compete. Those criterions are the pre-condition for convent not to compete, subjects who shall bear the responsibility in convent not to compete, scope of convent not to compete, time limit of convent not to compete, geographic scope of convent not to compete, compensation for employees and the form of the convent not to compete. Furthermore, in order to increase the certainty of law and provide helpful instruction for parties of the convent, the author suggests clear requirements on convent not to compete shall be articulated in pertinent laws or regulations. At the same time, in view of balancing the two parties of the covenant, judges shall examine the validity of the convent with a strict attitude.