Non-competition agreement refers to the agreement that employees shall not engage in the same or similar business activities as the original employer within a certain period after leaving the company. According to the Labor Contract Law, the non-competition agreement should generally conform to the principle of rationality, but there are also cases where the non-competition agreement is invalid. Five situations in which the non-competition agreement is invalid include: 1. Restriction conditions are too harsh: the non-competition agreement should restrict the time, region and industry scope, but if these restrictions are too harsh, such as the restriction time is too long or the restriction area and scope are too large, it is easy to be considered as violating the principle of rationality. 2. The agreed term is too long: According to the Labor Contract Law, the term of validity of the non-competition agreement shall not exceed two years at the longest. If the agreed period is too long, it may be deemed invalid. 3. No guarantee of employment right: the non-competition agreement should guarantee the employment right of employees. If it is not clearly stipulated that employees can transfer jobs or provide appropriate vocational training, it may be considered invalid. 4. No compensation or insufficient reasonable compensation: Since the non-competition agreement will limit the employee's right to freedom of employment, the employer generally needs to provide corresponding compensation or other preferential measures. If no compensation is provided or the compensation amount is unreasonable, the non-competition agreement may be invalid. 5. Prohibition by laws and regulations: The non-competition agreement is invalid if it violates the prohibition clauses of laws and regulations, such as infringing upon the personal rights and property rights of workers or impairing public interests.
Can employees be employed freely after the non-competition agreement is invalid? If the non-competition agreement is deemed invalid, that is, the agreement is not binding, employees can still be freely employed. At this time, the employer can't prevent employees from getting employed on the grounds of non-competition agreement, otherwise it may bear the responsibility of illegal employment.
Non-competition agreement is a common employment restriction agreement, but not all non-competition agreements are effective. Before signing the non-competition agreement, both parties should carefully analyze the legality and rationality of the agreement to avoid subsequent disputes.
Legal basis:
Article 44 of the Labor Contract Law of People's Republic of China (PRC), the employer and the employee may agree on non-competition clauses in the labor contract, but they shall meet the following conditions: ... (omitted later) The term of non-competition shall not exceed two years at the longest.