China Issues New Non-Compete Compliance Guidelines

Non-compete clauses serve as a critical mechanism for enterprises to safeguard trade secrets and preserve their competitive advantage in China's increasingly dynamic environment. However, excessive or improper use of such clauses has led to frequent disputes in practice. Several enterprises have abused the use of non-compete clauses and have therefore hindered talent mobility.

On September 4, 2025, the General Office of the Ministry of Human Resources and Social Security of China issued the Compliance Guidelines for Enterprises Implementing Non-Compete Agreements (the "Guidelines"). The Guidelines provide practical recommendations on the lawful implementation of non-compete restrictions. Their overarching objective is to strike an appropriate balance between the protection of corporate trade secrets and the legitimate rights and interests of employees.