What is the non-competition agreement in China?

For the employee who has the obligation of confidentiality, the employer may agree with the employee on the terms of a non-competition agreement in the labor contract or confidentiality agreement and agree to give the employee economic compensation on a monthly basis within the period of the non-competition agreement after the cancellation or termination of the labor contract. If a worker violates the non-competition agreement, he or she shall pay liquidated damages to the employer in accordance with the agreement.

The personnel subject to the non-competition agreement shall be limited to the senior managers, senior technicians, and other personnel with confidentiality obligations of the employer. The scope, region, and term of the non-competition agreement shall be agreed upon between the employer and the employee. The non-competition agreement shall not violate the provisions of laws and regulations.

After the dissolution or termination of the labor contract, the non-competition agreement period for a worker to go to another employer that has a competitive relationship with his company, or engage in similar businesses, or to start his own business to produce or operate similar products or engage in similar businesses shall not exceed two years.

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