Non-compete litigation Law firm Veat’s strategic response

Law firm Veat received a request from Unicorn company A (hereinafter referred to as "the client") to review legal response to non-compete related litigation.

In a case where an employee who transferred from a competitor to the client was sued for damages based on the non-compete clause agreed upon at the time of departure from the competitor, we prepared a legal opinion on response measures.

Law firm Veat thoroughly reviewed the validity of the non-compete agreement prior to litigation. We analyzed whether the non-compete agreement could be appropriately applied to the client's specific circumstances, and whether the agreement unduly restricted free competition.

A non-compete agreement is an agreement whereby an employee promises not to work for a company in a competitive relationship or to establish and operate a competing business. (Supreme Court Decision of July 16, 2003, 2002 Ma 4380, etc.)

Such agreements are used to protect a company’s trade secrets and interests, but at the same time, they can conflict with the employee's constitutional right to freedom of occupation, and not all non-compete agreements are valid.

Generally, non-compete agreements are valid, but the Supreme Court's position is that they may be deemed invalid if such agreements unduly restrict the employee’s freedom of occupation and right to work guaranteed by the Constitution, or excessively restrict free competition.

Criteria for Judging the Validity of a Non-Compete Agreement

① Interests of the employer that are worthy of protection
② The employee’s former position
③ Period, region, and target industry of the competition restriction
④ Presence or absence of compensation
⑤ Circumstances of departure
⑥ Public interest and other considerations
(Reference to Supreme Court Decision of March 11, 2010, 2009 Da 82244).

Law firm Veat approached strategically to maximize the client’s interests in the non-compete litigation. First, we conducted a detailed legal review to determine whether the agreement met the Supreme Court's criteria and provided the client with advice that would help them make decisions about litigation. We also reviewed the legality of the non-compete clause and the possibility of claiming damages from the employee who violated it, thereby strengthening the client’s legal protection.

Law firm Veat’s thorough pre-review and litigation strategy development played an important role in protecting the client's business interests in important legal issues such as non-compete, and preventing unnecessary legal disputes.

Law firm Veat has outstanding capabilities in providing comprehensive and professional legal advice to a wide range of companies, from startups to large corporations. Law firm Veat particularly excels in corporate advisory services, leveraging deep experience and expertise in various areas to meet the client’s legal requirements.

Law firm Veat operates a regular legal subscription service to provide professional support as a legal partner to companies, providing regular support to help them minimize legal risks and achieve successful businesses.

If you are concerned about a variety of legal issues facing your company, please contact Law firm Veat for information about our regular legal subscription service.

Thank you.

From Law firm Veat