Recent interpretations by the PRC Supreme People's Court
clarify a number of issues on implementation of Chinese labor laws.
Arguably the most important clarifications are related to the
compensation for and termination of non-competition clauses.
Companies are strongly advised to review whether they have taken
all necessary measures to ensure compliance and protection under
the law.
The Judicial Interpretation IV of the Supreme People's
Court on Several Issues Concerning the Application of Law in
Hearing Labour Dispute Cases ("Interpretation IV")
are effective as of 1 February 2013.
Under the Chinese Labor Contract Law, employers can sign
non-compete clauses with key employees (legally limited to the
employer's senior management, senior technicians and other
personnel with a confidentiality obligation). In such a clause, for
a maximum period of 2 years as of termination of the employment
relationship (for whatever reason), the former employee cannot work
for a
