Recently, the layoffs of major Internet factories have continued, such as Ali's batch of graduates who must graduate at the latest on the 30th, which is said to have N+3. Alibaba Cloud Feitian Academy has 82 fewer people in a week, accounting for 42%; Rookie's research and development is also graduating, and this year's rolling layoffs show no signs of ending. In addition, this year's 618 Ali's war report is not gratifying, and the Tao Department has to graduate some people. Of course, after this batch of graduation, there are other departments whose graduation indicators continue to be completely over. The second wave of meituan graduates is also fast, the ride has begun to talk, and the end of the month that is talked about is gone.
Of course, many of these graduates still belong to excellent graduates, and it is easy to change to a large factory and continue to work. However, in view of the fact that the management of the large factory is still relatively perfect, for some core personnel, when they entered the company, they signed the "Non-Compete Agreement", reminding everyone that if you do not care about this or do not understand, change jobs at will, it is easy to be required by the company to compensate. It is said that a core personnel who left the job of a large factory, the company sent someone to stare at where he went to work, did not expect to find that he went to work in another large factory, violated the "non-compete agreement", the defendant, personally paid 300,000 yuan to the big factory. If not, the people in the big factories still have money.
So, today we will talk about this "non-compete agreement", look down, there are cases.
I. Who signs the non-compete agreement and when?
According to Article 24 of the Employment Contract Law, the personnel subject to non-compete restrictions are limited to the employees of the employer, and there are three main categories:
1. Senior management
Company managers, deputy managers, financial leaders, secretaries of the board of directors of listed companies and other personnel specified in the articles of association.
2. Senior technical personnel
Senior research developers, technicians, employees in key positions, and people with easy access to trade secrets.
3. Other personnel with confidentiality obligations
Other persons who may know the trade secrets of the enterprise, such as marketing and sales personnel, accounting personnel, etc
For non-compete agreements, the law does not stipulate when it is more appropriate to sign them. Since the main purpose of the non-compete agreement is to restrain the employee from competing with the employer after leaving the job, many employers believe that the non-compete agreement can only be signed when the employee leaves the job.
For the signing time of the non-compete agreement, there are three time periods to choose from:
When entering the workforce: For some employees who have just signed a labor contract and know that they will be exposed to the resources and business advantages of the enterprise, and will definitely have a significant impact on the competitive advantage of the enterprise after leaving the company one day in the future, they can negotiate a non-compete agreement with them at the time of entry.
Advantages: If they are unwilling to sign a non-compete agreement when they are not willing to join the company, they can directly consider not recruiting the company, so as not to be unwilling to sign a non-compete agreement when they leave their jobs and cause losses to the unit in the future time (you know, the non-compete agreement needs to be signed through consultation with the employee, not the employee who is required by law).
Defect: It was determined in advance that non-compete severance pay would need to be paid after leaving the company. It is possible that when he leaves his job, he is no longer the talent needed by the unit, and the resources and business advantages he has will no longer affect the competitive advantage of the unit, and if he pays him economic compensation at this time, it is a loss for the unit.
Period of labor relationship: For some ordinary employees with the promotion of the position, they may also slowly come into contact with the company's resources and business advantages, so in order to prevent non-competition with the unit after leaving, you can consider signing a non-compete agreement with them during the existence of the labor relationship.
Advantages: At this time, the employee generally does not have a lot of grasp of the company's resources and business advantages, if it signs a non-compete agreement with it at this time and it is unwilling to sign, then the time left for the employer to negotiate with it and the available methods are relatively more, such as delaying its promotion time to negotiate with it to sign a non-compete agreement, so as not to grasp more resources and commercial advantages of the enterprise after the promotion of its job position.
Defect: Same as when you entered the company.
When an employment contract is terminated or terminated: The third time period for signing is when the employee leaves the employee.
Advantages: You can clearly know the resources and business advantages of the unit that the employee has, and you can choose whether you need to sign a non-compete agreement with him to avoid the company's additional costs.
Defects: Because the signing of a non-compete agreement requires both parties to sign by consensus, and it is likely that the departing employee is unwilling to sign it, it is difficult to restrain it at this time.
In fact, each time period to sign a non-compete agreement has different advantages and disadvantages, the employer's human resources workers, must be based on different positions, different situations comprehensive consideration, to determine who, when to sign, must choose a more favorable time period to sign a non-compete agreement with them.
2. Validity of non-compete agreements
In May 2015, Song and a consulting company signed a labor contract with a term of 3 years, and the contract stipulated that Song was engaged in consulting work with an annual salary of not less than 200,000 yuan. At the same time, the two parties also signed a "non-compete agreement", the agreement stipulated that "Song X, no matter what reasons from the company, will not get a competitive relationship with the company within one year after leaving the company, the contract clearly lists the units with competitive relationship, and the two parties also agree that within 15 days from the date of formally completing the termination of the labor contract with the company, the company will issue a non-compete compensation to Song X, and the compensation standard is 20% of the average monthly salary remuneration of Song X in the previous year." For less than one year, the salary and remuneration of the current year are converted, and the company will pay it to Song on a monthly basis, and it is agreed that if Song does not perform the non-compete obligation, he shall bear the liability for breach of contract, and the liquidated damages shall be 100,000 yuan.
In March 2017, Song submitted a resignation report to the company, saying that he was not adapted to the company's working environment and asked for resignation. The company agreed to Song's resignation request, at the end of July, after the two sides completed the handover procedures, the company issued a certificate of termination of labor relationship to Song and paid him the non-compete compensation fee for the month (calculated according to every 20% of the monthly salary actually received by Song), and then the compensation fee was credited to Song's bank account on a monthly basis, and then Song went to a competitor company to apply for employment and was hired to continue to engage in consulting and consulting work. After obtaining the relevant evidence, the company immediately applied to the labor arbitration department for arbitration, requiring Song to pay a liquidated damages of 100,000 yuan.
Case analysis:
In fact, the Employment Contract Law already has clear provisions on non-compete restrictions, and Article 23 stipulates that employers and employees may stipulate in the labor contract to keep the employer's trade secrets and confidentiality matters related to intellectual property rights. For employees who have the obligation of confidentiality, the employer may stipulate a non-compete clause with the employee in the labor contract or confidentiality agreement, and stipulate that after the termination or termination of the labor contract, the employee shall be given economic compensation on a monthly basis during the non-compete period. Where an employee violates the non-compete agreement, he shall pay liquidated damages to the employer in accordance with the agreement. Article 24: The personnel subject to non-compete restrictions are limited to the senior management personnel, senior technical personnel and other persons with confidentiality obligations of the Employer. The scope, region and time limit of the non-compete restriction shall be agreed upon by the employer and the employee, and the agreement on the non-compete restriction shall not violate the provisions of laws and regulations. After the termination or termination of the labor contract, the non-compete period for the personnel provided for in the preceding paragraph to go to other employers that have a competitive relationship with the unit that produces or operates similar products or engages in similar business, or who opens their own business to produce or operate similar products or engage in similar business, shall not exceed two years.
The key to the validity of the non-compete agreement lies in whether the employer pays the employee severance payment on a monthly basis during the non-compete period. In practice, there is more controversy over the "standard" issue of compensation, that is, whether the non-compete agreement is valid when the severance payment paid by the employer to the employee is significantly too low compared with the labor remuneration received by the employee during the normal working period of the employer.
In this case, the enterprise and Song signed a non-compete agreement, from the main point of view, although Song is not a senior management personnel, but the consulting company itself is a knowledge-intensive enterprise, Song must have a considerable understanding of the company's consulting model and consulting system, and the subject is in line with "other confidential personnel"; Judging from the content of the agreement, the two parties also agreed to pay the non-compete agreement fees on a monthly basis, and the enterprise also paid the fees on time; From the standard point of view, the payment is 20% of Song's average monthly wage, which is basically reasonable, so the unit requires Song to pay liquidated damages, which is completely legal.
III. How is the economic compensation standard for non-compete restrictions defined?
Non-compete restriction is a means of protecting trade secrets by restricting the right of workers to freely choose a job to a certain extent, including active employees and former employees. For employees, non-compete is an implicit legal obligation, for departing employees, it must come from the setting of a non-compete agreement, the employee loses the right to choose a job freely for a certain period of time, and the employer will inevitably need to pay a certain amount of compensation to the employee as a price.
The payment of non-compete economic compensation is not only mandatory by law, but also has the content of agreement as the mainstay and statutory supplementation. Specifically, it can be summarized from the following three aspects:
The law already has clear provisions on the time of payment, that is, the payment of non-compete compensation is after the termination or rescission of the labor contract. Paragraph 2 of Article 32 of the Labor Contract Law stipulates that for employees who have a confidentiality obligation, the employer may stipulate a non-compete clause with the employee in the labor contract or confidentiality agreement, and stipulate that after the termination or termination of the labor contract, the employee shall be given monthly economic compensation within the non-compete period. Therefore, the law has given a mandatory definition of the payment time agreed by the parties to the economic compensation, that is, "monthly payment".
Regarding payment standards and forms of payment: Mainland laws and regulations on labor do not clearly stipulate the compensation standards and payment methods for non-compete restrictions, and are only supported by judicial interpretations. Therefore, the parties may agree on the standard and form of payment of economic compensation, and if there is no agreement or the agreement is unclear, the judicial interpretation shall apply.
According to the relevant judicial interpretations of the mainland on the trial of labor dispute cases, the parties agreed on a non-compete restriction in the labor contract or confidentiality agreement, but did not agree to give the employee economic compensation after the termination or termination of the labor contract, and the employee fulfilled the obligation of the non-compete restriction and required the employer to pay monthly economic compensation according to 30% of the employee's average wage in the twelve months before the termination or termination of the labor contract. Some provinces and cities have made supplementary provisions on the minimum standards from the perspective of protecting the legitimate rights and interests of workers, but the highest standards have not yet seen any provisions.
Beijing Non-Compete Compensation Standard
Article 39 of the Minutes of the Seminar of the Beijing Municipal Labor Bureau and the Beijing Municipal Higher People's Court on the Application of Law in Labor Dispute Cases stipulates that if the employer and the employee have agreed on a non-compete clause in the labor contract or confidentiality agreement, but have not agreed on the payment of compensation fees or the specific payment standards, the non-compete clause shall not be found to be invalid on this basis, and the two parties may make amends through consultation, and if they cannot reach an agreement through consultation, they may pay compensation fees according to 20%-60% of the employee's wages in the same year before and after the termination of the labor relationship between the two parties. If the employer expressly states that it will not pay compensation fees, the non-compete clause shall not be binding on the employee.
Shanghai Non-Compete Compensation Standard
Article 13 of the Opinions of the Shanghai Higher People's Court on Several Issues Concerning the Application of the Employment Contract Law (Shanghai Gao Fa [2009] No. 73) stipulates that the parties to a labor contract only stipulate that the employee shall perform the non-compete obligation, but have not agreed whether to pay compensation to the employee, or whether to pay compensation to the employee but have not clearly agreed on the specific payment standard, based on the parties' unanimous intention on the non-compete restriction, it may be considered that the non-compete clause is still binding on both parties. If the amount of compensation is unknown, the two parties may continue to negotiate on the standard of compensation; If no agreement can be reached through consultation, the employer shall pay 20-50% of the employee's previous normal wages. If no agreement can be reached through consultation, the duration of the restriction period shall not exceed two years.
Article 24 of the Regulations on the Protection of Technical Secrets of Enterprises in the Shenzhen Special Economic Zone stipulates that the compensation fee stipulated in the non-compete agreement shall not be less than one-half of the average monthly salary of the employee in the last twelve months before leaving the enterprise on a monthly basis. If the agreed compensation fee is less than the above standard or there is no agreed compensation fee, the compensation fee shall be calculated according to one-half of the average monthly wage of the employee in the last twelve months before leaving the enterprise.
Article 15 of the Measures for the Protection of Technical Secrets of Zhejiang Province stipulates that "the standard of compensation fees for non-compete restrictions shall be determined by the right holder and relevant personnel through consultation." If it is not determined, the annual compensation fee shall be calculated on the basis of two-thirds of the total remuneration received by the relevant person from the right holder in the last year prior to the termination of the contract. The Opinions of the Shanghai Higher People's Court on Several Issues Concerning the Application of the Labor Contract Law stipulate that if the parties to a labor contract only stipulate that the employee shall perform the non-compete obligation, but do not agree on whether to pay compensation to the employee, or whether to pay compensation to the employee but do not explicitly agree on the specific payment standard, based on the parties' unanimous intention on the non-compete restriction, it can be considered that the non-compete clause is still binding on both parties. If the amount of compensation is unknown, the two parties may continue to negotiate on the standard of compensation; If no agreement can be reached through consultation, the employer shall pay 20-50% of the employee's previous normal wages. If no agreement can be reached through consultation, the maximum restriction period shall not exceed two years.
There are two controversial views in judicial practice on whether the non-compete compensation is too low or not: one view is that if the parties have not agreed on the non-compete compensation fee or the agreed amount, term and payment method do not conform to the relevant laws and regulations, it is an invalid clause. Another view is that it should be treated differently, and if the non-compete compensation is not agreed upon or the agreed amount is too low, it is equivalent to excluding the employee's right to compensation, and according to article 26 (2) of the Employment Contract Law, "if the employer exempts itself from its statutory responsibilities and excludes the employee's rights, the contract is invalid", it should be an invalid clause. If the compensation is agreed, but the agreed payment method does not conform to the provisions of the Labor Contract Law, it should also be divided into two situations: First, if it is more beneficial to the employee, it is a valid agreement; Second, if the rights of the employee are actually reduced or excluded, the agreement is invalid. In arbitration practice, it depends on specific matters.
If there is no agreement on the economic compensation of the non-compete restriction, must the non-compete restriction be invalid? According to the Opinions of the Shanghai Higher People's Court on Several Issues Concerning the Application, the parties only agreed that the employee should perform the non-compete obligation, but did not agree on whether to pay compensation to the employee, or although they agreed to pay compensation to the employee but did not explicitly agree on the specific payment standard, based on the parties' unanimous intention on the non-compete, it can be considered that the non-compete clause is still binding on both parties. If the amount of compensation is unknown, the two parties may continue to negotiate on the standard of compensation; If no agreement can be reached through consultation, the employer shall pay 20% to 50% of the employee's previous normal wages.
It can be seen that the non-compete restriction is not naturally invalid without agreeing on compensation, and the parties may supplement the agreement or decide through arbitration and adjudication bodies, the fundamental purpose of which is to protect the intellectual property rights of enterprises by maintaining the validity of the non-compete agreement.
Have you and your company signed a Non-Compete Agreement?