If post-employment non-compete compensation stops, demand payment in writing; after three unpaid months, seek termination, and challenge clauses where you never accessed trade secrets
In China, a non-compete can bar work for competitors for up to 2 years, with monthly compensation. If no amount was agreed, compensation is 30% of average wages over the preceding 12 months, at least the local minimum wage. Three months unpaid for reasons attributable to the employer lets you request termination. Since 2025, workers who never knew or accessed trade secrets may ask a court to confirm that the clause has no effect.
What it takes
Free. Keep the original non-compete agreement and evidence of missed monthly payments when leaving.
What you may gain
Non-competes are limited to senior managers, senior technical staff and others subject to confidentiality duties, for at most 2 years. Employers must pay monthly compensation. Without an agreed amount, the default is 30% of average wages over the 12 months before departure, no lower than the local minimum. Three months of nonpayment attributable to the employer lets the worker request termination. If the employer terminates the restriction, another 3 months' compensation is due. From 2025, workers who never knew or accessed trade secrets may seek confirmation that a clause is ineffective; restrictions exceeding the secrets actually known are invalid to that extent. In an official case, a pharmaceutical company sought RMB 7.1 million from former CTO Zheng. The court found the new employer's products were not substitutes for the former employer's products and that restrictions should be limited to secrets actually known, rejecting the claim entirely. These are Chinese rules.
Context & considerations
Conversely, violating a valid, paid restriction by joining a competitor can require agreed damages, and payment may not release you from the remaining term. A non-compete applying during employment can be effective without separate compensation.
Research & references
NPC Standing Committee (2012). Labor Contract Law, 2012 revision, Articles 23 and 24. https://yjglj.fushun.gov.cn/008/20260622/d846d3c2-df3d-4c4c-af16-898ede43e1ee.html (Fushun Emergency Management Bureau reprint); Supreme People's Court (2020). Labor Dispute Judicial Interpretation (I), Articles 36–40. https://www.court.gov.cn/zixun/xiangqing/282121.html; Supreme People's Court (2025). Labor Dispute Judicial Interpretation (II), [2025] No. 12, Articles 13–15. https://www.court.gov.cn/zixun/xiangqing/472691.html; Supreme People's Court (2025). Typical Labor Dispute Cases, case 4. https://www.court.gov.cn/zixun/xiangqing/472681.html