Non Compete Agreement Hong Kong

As we often remind our customers in the United States, employers in the Asia-Pacific region should also avoid agreements without any non-competition clauses and instead enter into agreements tailored to existing legislation and relevant facts. If an employer has reason to believe that a violation of a non-compete agreement has occurred or is imminent, action must be taken without delay, because, as in the United States, delays in implementation efforts may give a court a pause when assessing whether a restrictive contract is actually necessary to protect a legitimate business interest. Non-competitive agreements generally involve significant compensation for the worker during the restriction phase. If the worker`s skills are sector-specific and it would be difficult to find a different job than a competitor, higher pay would be warranted during the non-competition clause. Geographic restriction also affects the size of optimal compensation. If z.B. geographic restriction is very important, which limits the worker`s ability to find a job, but offers generous compensation during the restriction period, a court will be more likely to impose it, because everything else is the same. If the restriction is too widespread, it is generally considered unst swarmed and therefore ineffective. What is considered “unreasonable” or “too broad” is not everyone.

It is likely that a restrictive standard association, used in all groups of workers, will be questioned as to its suitability. This is because important factors such as seniority, time of service or the position the former employee held in the company are not taken into account. The facts of each situation must be considered in light of what is appropriate for this type of worker. For example, a non-compete clause for a period of six months, which operates in a given sector across Hong Kong, is unlikely to be maintained for a younger person. However, if this limitation were placed on a sales manager who has close ties to a company`s business contacts, it is more likely to be maintained. If the employee is particularly old and plays a central role within the company, a non-competitive agreement may be more applicable. Nevertheless, it is unlikely that the seniority of a worker is in itself a sufficient justification for a non-compete clause. A company presents this situation in conjunction with a demonstration of the risks to the business interests of the company if the manager was working for a direct competitor (or working for himself, in direct competition with the employer).