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ARTICLE · 26 JULY 2024

China: Restrictive Covenants

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The only post-employment restrictive covenant explicitly stipulated under the People's Republic of China's (PRC) labour laws is the non-compete restrictive covenant.

ChinaEmployment and HR
Jennifer C. W. Tam
Jennifer C. W. Tam
Hong Tran
Hong Tran
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AT A GLANCE The only post-employment restrictive covenant explicitly stipulated under the People's Republic of China's (PRC) labour laws is the non-compete restrictive covenant. The employer and the employee may agree on other restrictive covenants, such as non-solicitation restrictive covenants.

GENERAL PRINCIPLES

The PRC law does not prohibit an employer and employee from agreeing on restrictive covenants.

With respect to non-compete restrictive covenants, there are statutory requirements on applicable positions, period of restriction, geographical area, non-compete compensation, and termination of non-compete covenants.

NON-COMPETITION

The PRC Labour Contract Law provides the mechanism for non-compete restrictive covenants. Typically, a non-compete covenant is agreed between the employer and the employee at the time they enter into the labour contract.

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