Non-Compete Clauses: How To Enforce Or Cancel

According to the PRC law, employers may prohibit employees, who have access to and are obliged to keep confidential the employers' business secrets, from working for competitors or running competing business within no more than 2 years after the termination of their employment relationship, by entering into a non-compete agreement with such employees; in consideration for the employees' fulfilling such obligations, the employers should pay the employees non-compete compensation on a monthly basis. Such obligations of the employees are known as the “non-compete obligations” under the PRC law.

In dealing with non-compete disputes, we found the following common misunderstandings among employers about how to enforce and cancel employees' non-compete obligations.