Non-Compete Restrictive Covenant in Employment Contracts in Korea

Korean courts have invalidated numerous, non-compete agreements, reduced the amount of time of the non-compete period and/or have reduced liquidated damage amounts for violation of non-compete agreements.  Courts typically balance the freedom to work (an ability to work outside the specific field) with the significance of the interest in the employer to enforce the covenant not to compete.  The primary factors courts utilize in determining whether to enforce a non-compete agreement are:

  1. if compensation was paid in exchange for the covenant not to compete;
  2. if the interest being sought protection over includes valuable trade secrets and other valuable intellectual property;
  3. if the position of the employee was such that the employee would be able damage the future of the employer;
  4. if the employee was terminated for justifiable reasons;
  5. if the industry practice is to enforce covenants not to compete; and
  6. if the employee is harmed by the covenant not to compete (i.e. an inability to find alternative employment).

For more information on Non-Compete Clauses please see: Restrictive Covenants in Employment Agreements in Korea

Sean Hayes

Known for his street-smart advice & proactive advocacy. Sean works with senior retired Korean judges and leading attorneys in contentious and transactional matters. First non-Korean lawyer (NY) to work at Korean Courts and one of the first non-Korean law professors. Rated a top lawyer in Korea by major rating agencies.

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