After signing a non-compete agreement, if the employer fails to pay compensation monthly, send a written notice; if payment still doesn’t come after 3 months, you may terminate the agreement. Workers who never handled any trade secrets can request that the clause be declared invalid.

12. After signing a non-compete agreement, if the employer fails to pay compensation monthly, send a written notice; if payment still doesn’t come after 3 months, you may terminate the agreement. Workers who never handled any trade secrets can request that the clause be declared invalid.

Cost: No cost involved. Keep the original non-compete agreement and any proof that the employer didn’t make monthly payments after leaving the job.

In plain terms: A non-compete clause simply means you’re not allowed to work for a competitor for a certain period after leaving your job. This rule is there to protect you. The maximum duration is 2 years, and the employer must pay compensation every month. If the amount isn’t specified, it’s calculated as 30% of your average monthly wage over the previous 12 months, and it can’t be lower than the local minimum wage. If the employer fails to pay for 3 months due to its own reasons, you can ask to end the agreement. Starting in 2025, workers who never learned about or handled any trade secrets at their job can request that the non-compete clause be ruled invalid.

Benefit: Non-compete clauses only apply to senior executives, highly skilled technicians, and anyone with a duty to keep secrets. The maximum term is 2 years, and the employer must provide monthly financial compensation during that time. If the amount isn’t set, it’s 30% of your average monthly wage over the last 12 months, never lower than the local minimum wage. If the employer doesn’t pay for 3 months for reasons on its end, you can ask to cancel the clause. If the employer ends it voluntarily, it must pay an extra 3 months of compensation. From 2025, workers who never knew about or touched any trade secrets can ask to have the clause declared void. Any part of the clause that goes beyond what they actually knew about is also invalid. Official case example: A pharmaceutical firm sued its former CTO, Zheng, seeking 7.1 million yuan in damages. The court ruled that Zheng’s new employer’s products had no overlap with the original firm’s offerings, so the non-compete scope should be limited to what Zheng actually knew. The claim was dismissed in full (nationwide ruling).

Evidence grade: A

Sources: Standing Committee of the National People's Congress (2012). Labor Contract Law (Amended in 2012, Articles 23 and 24). <https://yjglj.fushun.gov.cn/008/20260622/d846d3c2-df3d-4c4c-af16-898ede43e1ee.html> (Reprinted by Fushun Emergency Management Bureau); Supreme People's Court of China (2020). Interpretation of the applicable legal issues in the trial of labor dispute cases (1) (Articles 36 to 40). <https://www.court.gov.cn/zixun/xiangqing/282121.html>; <https://www.court.gov.cn/zixun/xiangqing/472691.html>; Supreme People's Court of China (2025). Typical cases of labor disputes (Case 4). <https://www.court.gov.cn/zixun/xiangqing/472681.html>

Notes: This rule is there to protect you. On the flip side, if the agreement is valid and the employer pays as required, but you still go to work for a competitor, you’ll have to pay the agreed-upon penalty. Even after paying that, you might still be required to serve out the remaining non-compete period. Non-compete terms agreed upon while you’re still employed also count as valid, even if no extra payment is made by the employer.