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. For an updated article on this issue from 2023 please see: Non-Compete Clauses in Korean Employment Agreements.
The primary factors courts utilize in determining whether to enforce a non-compete agreement are:
- if compensation was paid in exchange for the covenant not to compete;
- if the interest being sought protection over includes valuable trade secrets and other valuable intellectual property;
- if the position of the employee was such that the employee would be able damage the future of the employer;
- if the employee was terminated for justifiable reasons;
- if the industry practice is to enforce covenants not to compete; and
- if the employee is harmed by the covenant not to compete (i.e. an inability to find alternative employment).
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- Non-Compete Restrictive Covenant in Employment Contracts in Korea
- Enforcement of Covenants Not to Compete in Employment Agreements in Korea: Restrictive Covenants in Korea
- Non-Compete Clauses in Employment Agreements in Korea
- Non-Compete Clauses in Korean Employment Agreements and Korean Business Sales Agreements
- Protecting Trade Secrets in Korea: Top 5 Things to Know Before Subjecting your Business Secrets to the Korean Market
- Must I grant Male Employees Maternity/Paternity Leave in Korea?: Korean Labor/Employment Law Updates
- Restrictive Covenants in Korean Employment Agreements and the Lawyers in Korea that Draft Them
- Wrongful Termination in South Korea
- Require a Injunction in a Korean Court Against your Former Korean Franchisee for Competing Against your New Korean Franchisee?
- Contracts Necessary for Doing Business with a Korean Company?