The law firm Cheongchul's Lee Young-gyeong Attorney conducted an interview with ‘Law Issue’ regarding the ‘non-compete agreement’.
Recently, there was a case in which the court upheld an injunction against a former employee who was trying to move from a domestic semiconductor company to a foreign company. Interest in protecting corporate trade secrets and technology is growing, and as a result, more and more employees are entering into non-compete agreements.
Companies may establish legal measures such as non-competition agreements and non-employment agreements to prevent employees from leaking corporate trade secrets when transferring to competitor companies, but these agreements do not always produce valid effects, so it is helpful to have a thorough review by an expert.
From the company's perspective, if an employee who had substantial access to trade secrets leaves and is re-employed by a competitor or starts a new business in the same industry, they can apply for an injunction against employment based on the non-compete agreement.
If this application is granted by the court, the employee's new employment can be prohibited, but if it is drafted too favorably for the company, there is a high possibility that it may be deemed invalid later, so caution is required.
To validate a non-compete agreement, it must meet various criteria, including whether there are legitimate user interests worth protecting, whether adequate compensation has been provided for the employee's non-competition obligation, and whether there is a concern that public interests may be violated if competition is not restricted for a certain period and in a specific area.
Attorney Lee Young-gyeong of Cheongchul Law Firm stated in an interview that “non-compete agreements should be concluded by reflecting individual circumstances, such as specifying the trade secrets to be protected according to the employee's job, and the period of non-competition should also be determined within a reasonable range to be valid. Both companies and employees need to receive comprehensive advice on the specific contents before concluding a non-compete agreement.”
For more details, you can check the published full interview.
