If the employee violates the provisions on non-competition, the employer may claim liquidated damages from the employee, and the amount of liquidated damages shall be paid according to the non-competition agreement.
Non-competition means that after the termination or rescission of the labor contract with the employer, the workers in specific positions who know the business secrets of the employer can't work in a new employer that has a competitive relationship with the original employer within a certain period of time, nor can they carry out business activities that have a competitive relationship with the original employer;
Compensation standard for liquidated damages: liquidated damages are generally negotiated by both parties. If negotiation fails, the contract shall prevail. If there is no agreement or the agreement is unclear, it shall be calculated according to the actual loss, but generally it shall not exceed 30%. If the parties claim that the agreed liquidated damages are too high and request an appropriate reduction, the people's court shall take the actual losses as the basis and give consideration to the performance of the contract.
The applicable conditions of the liability for liquidated damages are as follows:
1. As a subordinate contract clause, the effective liquidated damages of the contract are attached to the main contract. Only when the main contract is valid can the liquidated damages take effect. Although a penalty clause cannot be declared invalid separately, if the whole contract is invalid or revocable, the penalty clause will also be invalid after the whole contract is declared invalid or revocable.
2. The application of liquidated damages shall be based on the prior agreement of both parties. In principle, liquidated damages must be agreed by the parties in advance. From the commercial trial practice, due to the different conditions for the parties to conclude and perform the contract, the parties have different understandings and requirements on the consequences of the same breach of contract. The losses caused by the same breach of contract are only the parties themselves. Therefore, it is impossible and unnecessary for the law to stipulate the issue of liquidated damages in various contractual relationships. Fully allowing the parties to agree on liquidated damages is actually fully respecting the right of the parties to freely agree on the terms of the contract and the right to choose the remedy when the breach occurs, which is exactly what commercial activities themselves need;
3. The existence of breach of contract Only when one party breaches the contract, the other party has the right to demand payment of liquidated damages. Generally speaking, various forms of breach of contract, such as non-performance, improper performance, delayed performance, etc. , which may lead to the payment of liquidated damages. However, if the parties only stipulate the liquidated damages for specific breach of contract in the contract, if they only stipulate the liquidated damages for overdue payment, the occurrence of specific breach of contract shall be taken as the condition for payment of liquidated damages. If there is no such specific breach of contract, liquidated damages will be paid.
To sum up, the effective liquidated damages are attached to the main contract as the terms of the contract, and only when the main contract is effective can the liquidated damages take effect. Although a single penalty clause cannot be declared invalid, if the whole contract is invalid or revocable, the penalty clause will also be invalid after the whole contract is declared invalid or revocable.
Legal basis:
Article 585 of the Civil Code of People's Republic of China (PRC)
The parties may agree that when one party breaches the contract, it shall pay a certain amount of liquidated damages to the other party according to the situation of breach of contract, and may also agree on the calculation method of the amount of compensation for breach of contract. If the agreed liquidated damages are lower than the losses caused, the people's court or arbitration institution may increase the liquidated damages at the request of the parties; If the agreed liquidated damages are excessively higher than the losses caused, the people's court or arbitration institution may appropriately reduce them at the request of the parties. If the parties concerned pay liquidated damages for delayed performance, the breaching party shall also perform the debt after paying the liquidated damages.