Non-compete Restriction Breach Dispute Involving a Technology Company in Fujian

Case Summary

The Plaintiff, a technology company based in Fujian Province, entered into a written labor contract and a Non-Compete Agreement with the Defendant, Li Mou. The agreement stipulates that within 2 years following the termination or dissolution of the labor contract, Li Mou shall not be employed by any company in the same industry that competes with the Plaintiff. In the event of a breach, Li Mou shall pay liquidated damages of 20 yuan to the Plaintiff. On 2023 year 10 month 31 day, the labor contract between Li Mou and the Plaintiff expired and was terminated. Pursuant to the agreement, the Plaintiff paid Li Mou monthly non-compete compensation of 3600 yuan. In 2024 year 3 month, the Plaintiff discovered that Li Mou was employed as a Research & Development Engineer at another technology company that directly competes with the Plaintiff, constituting a violation of the non-compete obligation. Despite multiple requests from the Plaintiff for Li Mou to cease the breach, Li Mou refused. Consequently, the Plaintiff filed a lawsuit demanding that Li Mou pay liquidated damages for breach of the non-compete agreement amounting to 20 yuan.

Key Dispute

1.Is the Non-Compete Agreement signed by both parties legal and valid?

2.Has the plaintiff paid the non-compete compensation as agreed in the agreement?

3.Whether the defendant violated the non-compete obligation

4.Is the amount of liquidated damages claimed by the plaintiff reasonable?

Case Strategy

1.Fixed-term written labor contract, Non-Compete Agreement, wage payment records, non-compete compensation payment vouchers, defendant's employment records, and communication records between both parties as core evidence.

2.Provide evidence that the Non-Compete Agreement signed by both parties reflects their true intentions, does not violate mandatory provisions of laws or administrative regulations, and is legal and valid.

3.Demonstrate that the plaintiff has paid the non-compete compensation to the defendant monthly after the defendant's resignation, in accordance with the agreement, thereby fully fulfilling its contractual obligations.

4.Prove that the defendant, during the non-compete period, was employed by a company in the same industry that directly competes with the plaintiff, thereby breaching their non-compete obligations and incurring liability for breach of contract.

5.The liquidated damages of 20 ten thousand yuan claimed by the plaintiff are in accordance with the agreement, correspond to the defendant's breach and the plaintiff's actual losses, and are reasonable.

Processing Result

The court ruled that Defendant Li shall pay the plaintiff, Fujian Certain Technology Co., Ltd., a liquidated damages of 20 ten thousand yuan for breach of non-compete obligation within 10 days from the effective date of this judgment. Defendant Li shall bear all litigation costs.

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