Jump ship to court! CATL claimed millions of dollars for former employees, industry insiders: signed a non-compete agreement can only sell their lives

Source of this article: Times Finance Author: Lin Qian

On February 14, according to media reports, CATL filed a lawsuit against Hive Energy for unfair competition, and the case will be heard this month.

According to a number of court judgments, between 2018 and 2019, a total of nine CATL employees joined Wuxi Tianhong Enterprise Management Consulting Co., Ltd. (hereinafter referred to as Wuxi Tianhong) and Baoding Yixin Consulting Service Co., Ltd. (hereinafter referred to as Baoding Yixin) after leaving their jobs to provide services to Ningde Era's competitor Honeycomb Energy.

According to the data of Tianyancha, the legal representative of Baoding Yixin is Yang Hongxin, general manager of Honeycomb Energy, a power battery company under Great Wall Motor. Baoding Huayi Tourism Development Co., Ltd. was once the controlling shareholder of Wuxi Tianhong, but the contact telephone number of Huayi Tourism is the same as that of Baoding Great Wall Holding Group Co., Ltd. and Baoding Great Wall Real Estate Development and Construction Group Co., Ltd.

Source | Internet

According to reports, according to the evidence presented by the CATL era, the court found that Baoding Yixin had a substantial relationship with The Hive Energy Company. It is reported that CATL and the above-mentioned 9 employees have signed non-compete agreements, and the non-compete period is between 3 months and 24 months, but the above-mentioned employees have joined Baoding Yixin and Wuxi Tianhong respectively when the non-compete period has not passed. CATL therefore believed that the nine people had violated the Confidentiality and Non-Compete Agreement signed with them, so they were required to compensate 1 million yuan in liquidated damages.

According to media reports, the results of the first instance showed that the non-compete compensation received by each employee ranged from about 30,000 to 100,000 yuan. Among them, the employee involved, Y, claimed in the counterclaim that his monthly salary in Ningde New Energy Company was 8,000 yuan, and he received a total of 180,000 yuan in labor remuneration.

As early as 2019, CATL applied to the local labor and personnel dispute arbitration commission for violations of the non-compete agreement by some of the employees involved. Dissatisfied with the arbitration result, some of the employees involved filed an appeal in the Ningde local court in 2020, requesting to revoke the above-mentioned ruling of the Arbitration Commission, but both the first instance and the second instance lost the lawsuit. It is worth noting that Baoding Yixin was deregistered in June 2021, and Baoding Huayi Tourism Development Co., Ltd. also withdrew its shares from Wuxi Tianhong on February 1, 2021.

For the specific circumstances of the incident and the latest developments, on February 15, Times Finance called Baoding Yixin and Wuxi Tianhong respectively, but the phone was not connected. On the same day, Times Finance sent an interview to CATL and Hive Energy, and CATL said that "the case is in the legal process, there is no more response." Hive Energy told Times Finance, "We have paid attention to the media reports, and the company has been operating legally and compliantly." Our relevant departments are actively preparing to respond to the lawsuit in court, and we believe that the law will have a fair judgment."

"Signing non-compete agreements is now a common phenomenon in the industry, and basically core employees and executives are required to make agreements. The non-compete period will be adjusted according to the circumstances of personnel and will not exceed a maximum of 24 months. Insiders of power battery companies told Times Finance that "the scope of restrictions covers power battery companies, downstream vehicle companies, etc."

Some insiders said that employees who master trade secrets and core technologies jump to competing enterprises, which is easy to cause greater loss of interests to the company, so it is reasonable for employees to sign non-compete agreements. However, employees of power battery companies complained to Times Finance that after signing a non-compete agreement, it means that there is no choice but to sell their lives to the current company. After all, lithium battery technology is updated quickly, the non-compete period is long, and once it is missed or not exposed to new knowledge for a long time, it is easy to be left behind by the industry.

"The non-core employees themselves are not involved in the trade secrets and senior management of the enterprise, and they do not enjoy the corresponding salary and treatment of the enterprise during their employment, and there is no reason why they cannot independently choose employment opportunities after leaving." Enterprises should not excessively restrict the freedom of workers, especially ordinary workers, to choose jobs in order to safeguard their own interests. Gu Guohong, deputy dean of the Qingdao Automobile Research Institute of Jilin University, recently wrote an article pointing out, "What is particularly important is that enterprises abusing non-compete restrictions will restrict the flow of talents, and in the long run, it will have a negative impact on social and economic development." In California's Silicon Valley, which denies the validity of the non-compete agreement, a 'culture of talent flow' has long been formed between major factories, which has directly increased the talent density and innovation of the entire Silicon Valley."

At the same time, it is reported that in addition to Hive Energy, CATL has also sued Tafil New Energy and China New Aviation (AVIC Lithium Battery) patent infringement in 2020 and 2021 respectively.

Some headhunters told Times Finance that at present, more than 20 enterprises, including China Innovation Airlines, are on the recruitment blacklist of the Ningde era, and their employees cannot join the Ningde era as soon as they leave. "The reason for this is that many lithium battery companies do not deal with each other and basically do not allow each other to dig." However, some insiders told Times Finance that "I did not hear the situation mentioned by the aforementioned headhunting, and the prohibition of recruitment may only be that the headhunting company is afraid of follow-up trouble and unilaterally set a threshold in advance."

It is worth mentioning that whether it is the "non-compete law" or the "patent stick", behind them is the means taken by the Ningde era to stabilize its own industry position under the background of the white-hot competition in the power battery industry.

According to the South Korean market research institute SNE Research released the 2021 global power battery installed capacity ranking, CATL 2021 installed capacity of 96.7GWh, an increase of 167.13% over 2020, the market share reached 32.6%, ranking first in the world. LG New Energy, Panasonic, BYD, SK On, Samsung SDI, Zhongxin Airlines, Guoxuan Hi-Tech, Vision Power, and Hive Energy ranked second to tenth respectively. Among them, although the installed capacity of Hive Energy in 2021 is only 3.1GWh, which is far from the Ningde era, its growth rate is rapid, and the installed capacity in 2020 is 416.67% year-on-year.