What can I do to stop my competitors from poaching my employees?

There is no PRC law or regulation prohibiting a company from poaching the employee of its competitor.

While little can be done to stop a competitor from poaching your employees, you may consider taking the following steps to protect yourself, as your competitor may incidentally obtain your trade secrets by poaching your employees:

  • Put in place a proper confidentiality policy and enter into a confidentiality agreement with the relevant employee to make sure that your confidential information and trade secrets are all properly protected;
  • Retain your employees by keeping them happy;
  • Enter into a non-competition covenant with the relevant employees. Please refer to the Bitesize article dated 10 December 2009 for details of a non-competition covenant.

If our company does not have a non-competition covenant with an employee, and the employee refuses to sign such covenant following his resignation, can we put such an employee on "garden leave"?

The PRC law is silent on the issue of "garden leave" (which generally means that the employee will be provided with an agreed period of leave with full pay prior to the cessation date of his employment).

Garden leave arrangements are viable if both the employer and employee agree to it. However, if the employee does not agree to such an arrangement, the employer cannot unilaterally put him on "garden leave", as legally speaking, the employee is entitled to resign and work out his 30-days notice period.

If you are interested in receiving our "PRC Labour Law - Bitesize" articles, or if you have any questions on PRC employment law, please email to bitesize@mayerbrown.com to register.