The Research On Rules Governing Reduction Of The Liquidated Damages For Violation Of Non-competition Agreements

Excessive liquidated damages in a non-competition agreement between an employer and an employee not only violate the principle of reasonable restriction and the goal of substantive fairness in the system of non-competition,but also infringe the rights of the employee who has left the employer to choose a job freely,to work and to subsist.The liquidated damages reduction rule is to adjust the excessive level to an appropriate one with the objective of restoring substantive fairness of the law.While the number of judgements that reduced the liquidated damages for violation of the non-competition agreements is significant and has been increasing in China' s judicial practice of recent years,there is a lack of rules governing reduction of excessive liquidated damages in China's labor law system.Therefore,this article intends to discuss the basis and guiding principles of the non-competition system,examine historical evolution of laws and regulations regarding the liquidated damages for violating non-competition agreements,compare the categories,functions and characteristics of the liquidated damages under the legal framework of civil law and analyze the categories,functions,characteristics and practical patterns of the liquidated damages for violating non-competition agreements.Furthermore,this article aims at establishing an actual legal framework and applicable legal application system of liquidated damages for violating non-competition agreements by learning from valuable experience of Taiwan in the same field.