Research On Prohibition Of Business Strife Clause In The Labor Contract

In order to protect commercial secrets of enterprises and to prevent it from beingdisclosed because of the flow of employees, the Labor Contract Law stipulates theprohibition of business strife clause which was put into effect in2008. According tothe provisions of this clause, employers can sign the non-competition agreement (orsecrecy agreement) with their employees who may get to or master commercialsecrets. The agreement includes the range of secret、the non-competition period、thescope of restriction of competition、economic compensation、liquidated damages andso on. Certainly, this is a great progress in the way that our country searches forprotection methods of commercial secrets of enterprises, but we have to see thedefects non-competition clause exists.In the implementation process of this clause, it exhibits defects in the followingthree aspects: Firstly, the scope of restriction of competition consists of limitation ofarea and limitation of industry, but Labor Contract Law doesn’t set boundaries forthem, this kind of defect easy to impel employers to abuse right and set beyondreasonable range of prohibition of business strife for workers, employees’ right ofchoosing job is affected severely; Secondly, this clause doesn’t set the minimum ofeconomic compensation, employees may not be able to obtain the reasonableeconomic compensation, their lives also may become difficult; Lastly, there is noconcrete standard about liquidated damages. The employer may set a high amount ofliquidated damages which employee is unable to bear. Based on the consideration ofprotection of employees’ labor right and right live, at the same time, in order tomaintain the normal market competition order and social public interests, this paperproposes improvement suggestion on the limited business clause through the study ofrelevant laws at home and abroad. Non-competition range setting should be limited tothe area and industry where the employer has competing interests, the employer hasobligation to proof it. As for the issue of economic compensation, Labor ContractLaw should set the minimum standard for it. The amount of economic compensation paid by the employer must be higher than that standard; otherwise the competitionrestriction agreement will be regarded as invalid. The last problem about liquidateddamages should also be solved. On the one hand, we must make a series of rationaljudgment standards; on the other hand, the law should give the laborer the right toadjust the amount of liquidated damages. If employers don’t follow the aboverequests, the agreement also is regarded as invalid. In fact，at some times, althoughthe amount of liquidated damages is reasonable, but it is also too high for laborer, atthis time, the laborer can claim his right to adjust the amount.