On 30 Apr. 2024, China’s Supreme People’s Court (SPC) released a batch of typical cases of labor disputes to provide guidance for handling similar cases and to protect workers’ rights and interests.
The batch includes six cases covering common disputes such as the confirmation of labor relations, equal employment, and rest and vacation rights. For example, in Case No. 3, which involved a non-compete agreement dispute between a company and an individual named Li, the court ruled that a non-compete agreement cannot restrict the right to choose employment for workers who do not have confidentiality obligations.
In this case, the defendant, Li, was a massage therapist and trainer at the company and had signed a confidentiality agreement with a non-compete clause upon joining the company. After Li joined a new employer, the former company demanded that Li pay the liquidated damages of at least CNY 5,000 as stipulated in the agreement.
The court found that the information Li accessed during his employment was not core business information, and thus, he did not fall under the category of employees with confidentiality obligations under the Labor Law. Therefore, as an employee who is not obligated to keep confidentiality, even though Li had signed a non-compete agreement, he was not required to abide by its restrictions.
Photo by Eean Chen on Unsplash
Contributors: CJO Staff Contributors Team
