Which court should have jurisdiction over shareholder defect capital reduction?
Case Description
Zhang is the Deputy General Manager of Company A, and as a senior management member of the company, Company A has signed a non compete clause with Zhang. In 2022, Zhang resigned. Shortly after Zhang's resignation, Company A discovered that several employees of Zhang's previous work team had resigned one after another. One day, Company A accidentally saw a report from competitor Company B in an internal magazine in the industry. The accompanying pictures and interview content in the report showed that Zhang resigned and joined Company B, bringing all the R&D teams from Company A to work at Company B. Company A filed a lawsuit in anger, demanding that Zhang bear the responsibility for breach of contract. The final court found that Zhang violated the non compete obligation, but as both parties did not agree on the prohibition of solicitation obligation, they did not support the company's claim.
Lawyer Analysis
In the past, in order to protect the stability of company talent and customer resources, companies often maintained their interests through confidentiality agreements or non competition agreements. In recent years, clauses prohibiting solicitation have also frequently appeared in relevant cases.
1、 The concept of non solicitation clauses, confidentiality clauses, and non competition clauses
1. Prohibition of Solicitation Clause: It is a restrictive agreement by the unit that prohibits resigned employees from using methods such as solicitation and persuasion to cause other employees to resign and join the new company where the resigned employee is located. Simply put, this clause is an agreement to prevent departing employees from coming back and "digging into the wall".
3. Non compete clause: refers to an employee's inability to engage in the same or similar business as their original employer for a certain period of time after resignation. Simply put, it is an agreement that prohibits employees from "switching jobs" to competitor companies.
2、 Differences between Prohibited Solicitation Clause, Confidentiality Clause, and Non compete Clause
1. Regarding whether the unit pays compensation
According to relevant regulations, if a company has agreed on a non compete clause with an employee who has confidentiality obligations, the company is required to provide economic compensation to the employee on a monthly basis during the non compete period (i.e. during the period during which the employee's employment is restricted) after the employee's labor contract is terminated or terminated. Otherwise, the employee may terminate the non compete clause and not fulfill this obligation. For the prohibition of solicitation, there is no legal requirement for units to pay economic compensation to employees.
2. Whether to pay liquidated damages for employee breach of contract
According to regulations, if an employee violates the non competition agreement, they shall pay a penalty to the unit in accordance with the agreement. For violations of the prohibition of recruitment agreement, as the Labor Contract Law does not stipulate that the unit can require employees to pay a penalty for breach of contract, even if both parties agree on a penalty for prohibition of recruitment, in practice, it usually does not receive support from the court.
3、 Legal risk prevention of solicitation behavior
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