Enterprise Trade Secret Protection System and Employee Non-Compete Restrictions

Trade secrets are a critical component of enterprise core competitiveness. Establishing a robust confidentiality system and non-compete mechanism is key to preventing leakage of technology and customer information.

1. Trade Secret Constituent Elements

A trade secret must simultaneously satisfy: not known to the public (secrecy), having commercial value (value), and the rights holder having adopted corresponding confidentiality measures (confidentiality). It includes technical information (designs, programs, formulas, processes) and business information (customer lists, supply sources, pricing strategies, bid bottoms).

2. Confidentiality Measure Requirements

Enterprises must adopt confidentiality measures commensurate with the value of the trade secret, including: signing confidentiality agreements, limiting access to confidential information, encrypting or locking confidential information carriers, restricting access to confidential premises, establishing confidentiality policies and training, and managing declassification periods for departing employees. The reasonableness of measures is key to judicial recognition.

3. Non-Compete Agreements

For workers with confidentiality obligations, employers may include non-compete clauses in employment contracts or confidentiality agreements. The non-compete period must not exceed 2 years, during which monthly economic compensation must be paid (standard: 30%–60% of the worker's average wage in the 12 months before departure, varying by region). Non-compete applies only to senior management, senior technical personnel, and other personnel with confidentiality obligations.

4. Infringement Enforcement Paths

Trade secret infringement may be pursued through: reporting to market regulation authorities (administrative penalties), filing civil litigation (cessation of infringement + damages), and reporting to public security organs (crime of trade secret infringement). The difficulty lies inevidence submission. Enterprises are advised to retain evidence of confidentiality measures and infringement leads in daily management, and apply for court evidence preservation when necessary.