Classification of prohibition of business strife
According to the current laws of our country, it can be divided into two types: statutory non-competition and agreed non-competition.
The statutory prohibition of business strife is based on the direct provisions of the law, and it is a mandatory prohibition of business strife, and the parties may not waive it through consultation. For example, Article 6 1 of China's Company Law stipulates: "Directors and managers shall not engage in business similar to the company they work for themselves or for others, and shall not engage in activities that harm the interests of the company. The income from engaging in the above business or activities shall be owned by the company. Directors and managers are not allowed to enter into contracts or conduct transactions with the Company, unless otherwise stipulated in the Articles of Association or otherwise unexpected in the shareholders' meeting. "In addition, China's Partnership Enterprise Law and Sino-foreign Joint Venture Law also have relevant provisions. The legal prohibition of non-competition in China is common in some commercial laws, mainly aimed at senior managers such as directors, managers and partners of companies and enterprises. The legislative reason is that the directors, managers, partners and other senior managers of companies and enterprises are people who manage the affairs of companies and enterprises, are familiar with the operation of companies, master a large number of business secrets and core competitiveness of companies and enterprises, and can easily use the above resources for huge personal interests, thus seriously affecting the legitimate interests of companies and enterprises. If we let them work for the company on the one hand and engage in similar affairs for themselves or others on the other, we can't rule out their self-interest.
The agreed non-competition is based on the agreement of the parties to the contract. At present, there is no clear legal prohibition of business strife in China, but it is scattered in some administrative regulations and local regulations. The Ministry of Labor (1996) No.355 Document "Notice on Several Issues Concerning the Mobility of Employees in Enterprises" stipulates: "The employer may stipulate that employees who have business information and secrets shall not be directly or indirectly employed by other employers who produce similar products or operate similar businesses and have competitive relations within a certain period (not exceeding three years) after the termination of the labor contract, and shall not disclose the business secrets of the original unit. Employers should pay reasonable compensation to employees who are subject to such employment restrictions. " The Opinions on Strengthening the Management of Technical Secrets in the Flow of Scientific and Technological Personnel issued by the State Science and Technology Commission 1997 in July, the Notice of the Science and Technology Department of the State Building Materials Bureau on the Intellectual Property Protection of the Achievements of National Key Scientific and Technological Projects, the Regulations on the Protection of Technical Secrets of Enterprises in Shenzhen Special Economic Zone and the Regulations on the Protection of Technical Secrets of Enterprises in Zhuhai also stipulate the agreed non-competition restrictions after leaving the company. As can be seen from the above laws and regulations, there is no mandatory non-competition after employees leave their jobs. It's just that the company signed a non-competition contract with employees to prevent employees from leaking business secrets at will, thus damaging their own interests, and agreed on the obligation of non-competition.
Since the statutory non-competition obligation comes from the direct provisions of the law and the agreed non-competition obligation comes from the agreement of both parties, in judicial practice, the determination of the two should be different.
Legal identification of non-competition
The legal prohibition of business strife comes from the direct provisions of the law. In practice, the legal prohibition of business strife should be recognized in strict accordance with the provisions of the current laws in China. Specific attention should be paid to the following issues:
(1) The subject of obligation is specific, and it is the relative person who has the obligation of non-competition according to the law. Generally speaking, people who hold certain positions mainly include the general manager and deputy general manager of Sino-foreign joint ventures; Directors and managers of limited companies and joint stock limited companies; The chairman, vice chairman, directors and manager of a wholly state-owned company; All partners in the partnership. For other employees, there are differences in legislation among countries whether they should bear the statutory obligation of non-competition. For example, Italian law stipulates that employees shall not compete with employers for their own interests or those of third parties, shall not disclose information related to management or production methods to employers, and shall not allow third parties to use the above information in a way that harms employers. However, there is no clear stipulation in our laws. Therefore, in our country, ordinary employees can't become the business subject of legal non-competition.
(2) The object of non-competition is specific, which is the same or similar business as the enterprise where the obligor works, not all business. It mainly includes: not engaging in the same business scope as the company for yourself or a third party; Shall not transfer its own products or other property to the company, nor accept its products or other property; Shall not engage in other acts that compete with the company.
(3) The term of non-competition is fixed, that is, the term of office of the obligor. Our country's law only stipulates that the statutory non-competition obligor should undertake the non-competition obligation during his tenure, and the law does not explicitly prohibit the obligor from undertaking the non-competition obligation after leaving office. According to the principle of "no prohibition without law", under the current circumstances, the obligor will not bear any responsibility for the non-competition behavior after leaving his post. If we want to restrict their non-competition behavior, we can only determine their non-competition obligations through the agreement of both parties.
(4) the legality of the obligation, that is, without legal provisions, there will be no non-competition obligation of the parties.
Determination of agreed non-competition
The legal effect of non-competition by agreement comes from the agreement of the parties, which embodies the principle of party autonomy. Generally speaking, the agreed non-competition clauses should generally include the specific scope of non-competition, the term of non-competition, the amount of compensation and payment methods, and the liability for breach of contract. For the prohibition of business strife by agreement, based on the principle of autonomy of will in private contract law, as long as the agreement between them does not violate public order and good customs or impose regulations, it is valid in principle. However, the prohibition of business strife involves two conflicts of interest, on the one hand, the economic interests of the employer, on the other hand, the interests of employees' right to exist and work. Therefore, the determination of non-competition should be strictly restricted, so that the interests of both parties can be properly handled to protect the legitimate interests of the employer, but it will not cause improper infringement on the basic rights of employees.
(A) the prohibition of business strife must have a clear object of protection
Employers must have legitimate interests that need to be protected before they can conclude non-competition clauses with employees. In order to prevent employers from signing non-competition clauses with employees without clear protection objects, thus restricting employees' freedom of choosing jobs. The so-called legitimate interests refer to the existence of rights and interests worthy of protection by business owners. It mainly includes the technical secrets and business secrets of the employer. Special training for employees by employers is also a protected legal right. As for whether there are any interests worthy of protection, the burden of proof should be borne by the employer.
The obligation of non-competition should not be too broad.
Since the employer has entered into a non-competition clause with employees in order to prevent the legitimate interests of employees from being damaged, the obligor of non-competition should also be within the scope that the non-competition after leaving the company will cause damage to the enterprise, not to all employees. The subject of obligation of non-competition should be limited to senior managers, technical researchers, financial managers and sales personnel who are in contact with, know or master the technical secrets and business secrets of enterprises. For employees who can't come into contact with any business secrets, business secrets and other valuable information to the employer and its competitors at work, even if they sign a non-competition contract, it should be invalid. Therefore, employers should avoid the phenomenon that employees sign non-competition agreements regardless of their positions, educational background and whether they are exposed to trade secrets.
(3) The term of non-competition shall be reasonable.
Non-competition means that the employer protects its technical and commercial secrets in order to maintain its dominant position. Therefore, the timeliness of technical secrets and commercial secrets is of great significance to the determination of reasonable non-competition period. The nature of technical secrets and commercial secrets determines their limitations. Some technical secrets and business secrets may be lifelong to maintain the competitive advantage of an enterprise, such as the beverage formula of Coca-Cola Company; Some technical secrets and business secrets may be short-lived to keep an enterprise's competitive advantage, such as the computer's Windows operating system, which is updated almost every year. It can be seen that due to different situations in different industries, it is difficult to have an absolute standard for the period of non-competition. Therefore, how to determine a reasonable non-competition period needs further discussion. At present, in the absence of clear provisions in our laws, we can refer to relevant laws and regulations and set the term of non-competition as three years at the longest. Specific to each case, according to the nature of technical secrets and commercial secrets, reasonably determine the non-competition period.
(d) The scope of non-competition should not be too broad.
It is difficult to determine the area where non-competition is prohibited. In practice, the field of non-competition is often determined according to the business scope of the employer. The author believes that this practice lacks certain rationality. In the case of large-scale production and circulation in modern society, the business of a unit, regardless of size, is often spread all over the country, so that employees will lose the opportunity of re-employment because of signing a non-competition treaty. The author believes that it seems more convincing to determine the scope of non-competition by whether the competitive interests of employers are affected and whether the freedom of employment of workers is unreasonably restricted. In practice, it depends on the extent to which the employer is influential and the extent to which the economic benefits of trade secrets exist. If the business volume of employers in a region is small or even non-existent, it means that employees in this region will not compete with the original units and should not be banned.
(5) The obligation of non-competition shall not exceed the employee's employment scope.
The so-called non-competition obligation refers to the business or work that employees are not allowed to engage in after leaving their jobs. In this regard, it has been suggested that in order to facilitate practical operation, the industry engaged by the employer as determined in the employer's business license shall prevail. The author believes that determining the business scope approved by the employer will cause unreasonable competition for employees. Because the business actually operated by the employer is often less than the declared business scope, it is unfair to require employees to undertake the obligation of non-competition for the business that the employer does not actually operate. In this regard, it has also been proposed to take the actual business of the employer as the scope. The author believes that this scope will also expand the obligation of non-competition to an unreasonable scope. Under normal circumstances, it is impossible for employees to come into contact with all industries operated by employers, so it is unreasonable for employees to undertake non-competition obligations for industries that are not involved. Therefore, the obligation of non-competition cannot exceed the employment scope of employees. However, this does not mean that the obligation of non-competition is the employment scope of employees, but should be less than or equal to the employment scope of employees. This scope should be limited to employees who have studied or been exposed to special and specialized businesses because of their service in enterprises, otherwise the non-competition will lose its causal relationship. Of course, whether it belongs to protected proprietary knowledge or not, the enterprise owner should bear the burden of proof.
(six) shall pay the compensation fee for non-competition.
The employer's economic compensation for employees is the basic requirement for the entry into force of the non-competition agreement. After all, the prohibition of business strife limits employees' right to survive and choose their jobs freely. Because employees can't work in related enterprises, their income and quality of life will be reduced to varying degrees. If employees can't get corresponding compensation, it will cause new interest imbalance. Through the payment of compensation, it can not only make up for the damage of employees, but also be worthwhile for employers to pay some money to protect their greater interests. At present, the administrative regulations only stipulate the amount of compensation in principle, but the actual performance is that employers often stipulate lower standards. In this regard, it has been suggested that it should not be lower than the minimum living standard controlled by the employee's location. Some people refer to the standards stipulated by Shenzhen or Zhuhai, and propose that the average annual compensation fee should not be less than 2/3 or 1/2 of the total annual salary. The author believes that the amount of compensation should not only meet the living standards of employees, but also fully reflect the regulatory function of non-competition. In the specific operation, the minimum standard is not less than 1/2 of the total wages of employees in the year before resignation, and it is increased year by year, 2/3 of the total wages in the second year and 3 years. In this way, the longer the fixed number of years, the greater the burden of the employer, and the employer will consider the competition period and make the competition period more reasonable by adjusting the amount of compensation.
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Several problems about prohibition of business strife
(a) whether employees should bear the obligation of non-competition for their non-post skills.
Non-post technical achievements refer to those who have completed technical achievements, mainly by their own research, not by using the material conditions of their units. The right to use and transfer non-post technological achievements belongs to the person who completed the technological achievements. After the non-post technical achievements are transferred to our company, should they bear the obligation of non-competition after leaving the company? In this regard, the author believes that non-post technological achievements do not bear the obligation of non-competition. Because the right of non-post technological achievements belongs to the person who completed it, he has the right to deal with his own technological achievements. After he transferred his own technological achievements to this unit, he established a technology transfer contract relationship with this unit, and the rights and obligations of both parties should be determined according to the contract. If either party fails to perform the contract correctly, it will only bear the liability for breach of the technology transfer contract. This is essentially different from the liability for breach of contract in the nature of labor contract.
(2) Whether the obligor for statutory prohibition should pay compensation.
Statutory non-competition obligors are directors, managers and partners of the company, and their interests are closely related to those of the company. According to the law, the direct purpose of non-competition between the company and the non-competition obligor is to safeguard the company's interests, and the ultimate beneficiary is the non-competition obligor. Therefore, the statutory non-competition obligor does not need compensation. Moreover, the law does not stipulate that statutory non-competition obligations should be compensated. Therefore, the obligor prohibited by law should not be compensated.
(3) Procedural issues concerning dispute settlement of non-competition
Disputes arising from the violation of statutory non-competition obligations belong to disputes in which the parties violate the legal provisions and infringe on the rights and interests of the company. The parties may bring a lawsuit directly to the people's court and demand the settlement of the dispute. The agreed prohibition of business strife should be treated differently. If there is a non-competition clause in the labor contract and the parties violate the non-competition agreement, it shall be determined that the disputes arising from the violation of the labor contract shall be arbitrated by the arbitration department in advance according to the existing legal arrangements. If the prohibition of competition is stipulated in a separate agreement (such as confidentiality agreement), the dispute should not be submitted to arbitration first. Because the confidentiality agreement concluded between the employee and the employer after the establishment of labor relations does not belong to the scope of the labor contract, the labor dispute handling procedure is not applicable to the dispute of non-competition, and the lawsuit should be brought directly to the court. This is consistent with the provisions of the State Science and Technology Commission.