Applicable Industry, Time and Area Should be Defined in Non-competition agreement

Recruitment of talents from other corporations keeps prevailing over the high-tech industries.  Enterprises, in order to prevent their trade secrets from leaking out, are used to asking employees to sign non-competition agreements defining that they are prohibited from working for the same businesses after leaving office.  However, in view of the abuse of such agreements, the Council of Labor Affairs scheduled to define in the Employment Contract Act that the non-competition agreement should specify the applicable industries, time and areas, and if employers suffer any loss, they should bear the burden of proof in this regard, and the employers should also prove that employees have access to the trade secrets in case there are any disputes arising therefor, so that enterprises’ trade secrets and labors’ working rights can be satisfied equivalently.

Source: Economic Daily News 06/17/2002