Breach Of Competition Agreement Requires Payment Of Penalty.

The salesmen of three medical device companies signed a labor contract with the company. The two sides expressly agreed on the "competition agreement", confidentiality provisions and liquidated damages clauses. For this reason, the company pays the corresponding confidential wages per month.

However, during the period of work, the three companies opened the same business scope as the company. The company applied for arbitration, and the Arbitration Commission ruled that the laborer needed to pay liquidated damages to the company.

The worker disagrees with the ruling and brings a lawsuit to the court.

Today, the people's Court of Wenzhou District of Zhejiang Province in the Lucheng people's court ordered three employees to pay liquidated damages to the company.

A medical device company in Wenzhou was founded in September 2010, mainly engaged in the sale of medical devices and after-sales service.

In April 2014, 47 year old Wang, 34 year old Zhou Mou, 30 year old Lu Mou entered the company, separately engaged in the distribution and sales work.

In July 2015, three people signed a labor contract with the company for 3 years respectively.

The contract expressly stipulate that the technical information and business information of the company belong to the trade secret, which belongs to confidential matters, and the wage of confidentiality is 300 yuan.

In addition, three people signed the contract with the company.

The agreement clearly stipulate the "competition restriction": three persons should not invest or take part in any other companies competing with the company's business during the service period and 3 years after their departure. They should not engage in activities that are competitive with the company's business.

If a worker violates the obligation of confidentiality and competition agreement, the company shall have the right to terminate the contract immediately and require the worker to pay punitive liquidated damages.

The three party's liquidated damages ranged from 50 thousand yuan to 80 thousand yuan.

Since a contract is established, it is necessary to abide by the promise.

However, in December 10, 2015, Wang Mou, Zhou Mou and Lu Mou invested three people to set up a medical device company, which has the same business scope as their own company.

During his stay, Lu Mou and Zhou were responsible for the sales of medical devices in different areas of Wenzhou, and Wang was responsible for delivering goods.

In 2016, the three workers discontinued labor relations with the company respectively.

In July of the same year, three original medical device companies applied for arbitration to the Arbitration Commission.

According to the Arbitration Commission, the three judges paid 25 thousand yuan to 40 thousand yuan respectively.

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The three refused to accept the case and filed a lawsuit with the Lucheng district court. They believed that they could not touch the company's commercial secrets, and there was no leakage. They requested the court to order three people to pay no penalty.

After hearing the court in Lucheng District, the three party believed that the sales and distribution personnel of the company should know or contact with the business secrets stipulated in the labor contracts and confidentiality agreements such as the company's management know-how, resource intelligence, production and marketing strategy, product and product plan, service, customer information and customer list, enterprise employees' remuneration, etc.

The three party shall perform the obligations of confidentiality and confidentiality in accordance with the terms of the labor contract and confidentiality agreement. However, when the three employees are in service, they set up a medical device company that is in line with the scope of operation of the above-mentioned companies. In carrying out their business activities, they will inevitably involve relevant business secrets, and even if three people do not violate it.

Its behavior also violates the competition restriction agreement in the labor contract.

Although there is no stipulation of compensation for competition in the labor contract, the three party's breach of contract occurs during his tenure, and the worker should pay a penalty according to the contract.

However, because the three person company did not provide evidence of the corresponding loss to the court, the court sentenced three people to pay 25 thousand yuan to 40 thousand yuan of liquidated damages to the company respectively.

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