Legal Framework
Non-compete clauses are governed by the Labor Contract Law (Article 23–24). They apply only to senior management, senior技术人员, and employees with access to trade secrets. Non-compete cannot be applied to ordinary employees.
Key Requirements
- Maximum term: 2 years after termination
- Mandatory compensation: At least 30% of average monthly salary for the 12 months prior to termination (per SPC司法解释)
- Geographic scope: Must be reasonable and specified
- Business scope: Limited to the employer's actual business
Enforcement and Remedies
Employers can seek injunctions to enforce valid non-compete clauses and claim liquidated damages for breach. Courts may reduce excessive liquidated damages. If the employer fails to pay compensation for 3 months, the employee can terminate the non-compete obligation.