[4] Compiled from: Red Star News
 
[2] Baidu Online Network Technology (Beijing) Co., Ltd. (hereinafter referred to as "Baidu"), in order to prove that former employee Pan Mouting went to work for competitor Beijing ByteDance Technology Co., Ltd. (hereinafter referred to as "ByteDance") after resigning, not only sent a package addressed to Pan Mouting to ByteDance's office address, but also provided the court with multiple video recordings showing Pan Mouting appearing in ByteDance's office area and parking her car in ByteDance's underground garage, staging a real-life "spy thriller."

 

[3] In the end, Baidu won the lawsuit. However, the judgment document did not mention how Baidu obtained these video recordings.
 
Case review
[4] Pan Mouting joined Baidu on April 8, 2011, and served as a senior manager. On June 30, 2017, the two parties signed an open-ended labor contract. The contract stipulated that within one year after the termination or expiration of the employee's labor contract with Baidu, Baidu would pay the employee half of the basic salary from the year before resignation as economic compensation. If the employee violated the non-compete obligation, they would need to return all economic compensation already paid by Baidu and pay a penalty of three times the total economic compensation. Additionally, if the employee breached the confidentiality obligations stipulated in the contract, they would also pay Baidu 50,000 yuan in damages.

[5] On April 2, 2020, Pan Mouting resigned for personal reasons. Baidu served her with a "Notice of Confidentiality and Non-Compete Obligations." The notice reminded that from April 3, 2020, to April 2, 2021, Baidu would pay Pan Mouting a monthly non-compete compensation of 35,800 yuan. During this period, Pan Mouting was prohibited from engaging in any business that Baidu or its affiliates were or planned to pursue, including but not limited to Jinri Toutiao, ByteDance, and their affiliates. Violations would result in corresponding liability for breach and compensation.

 

[6] From April to October 2020, Baidu paid Pan Mouting the full monthly non-compete compensation. Later, after discovering that Pan Mouting had secretly taken a job at ByteDance, Baidu suspended the payment of non-compete compensation. Subsequently, Baidu sued Pan Mouting in court.
 
After trial, the court found that both parties had signed the "Confidentiality and Non-Compete Obligation Notice" and should consciously and fully perform it. Pan Ting parked her car multiple times in ByteDance's underground garage from July to August 2020 and frequently entered ByteDance during workdays. Although she claimed to have met friends or visited acquaintances, she failed to provide evidence to support this. Therefore, Pan Ting must pay Baidu liquidated damages for violating the non-compete obligation as agreed.

The court ruled: Pan Ting must return Baidu's non-compete compensation of 214,800 yuan; Pan Ting must pay Baidu liquidated damages of 859,200 yuan for violating the non-compete obligation; Pan Ting must continue to fulfill her confidentiality obligations to Baidu.
 
Labor Contract Law of the People's Republic of China
Article 23
Employers and employees may agree in the labor contract on matters concerning the protection of the employer's trade secrets and intellectual property-related confidential information. For employees with confidentiality obligations, employers may include non-compete clauses in the labor contract or confidentiality agreement, and agree to provide monthly economic compensation during the non-compete period after the termination or dissolution of the labor contract. If an employee violates the non-compete agreement, they must pay liquidated damages to the employer as agreed.
 
Article 24
Non-compete restrictions apply to senior management, senior technical personnel, and other employees with confidentiality obligations. The scope, territory, and duration of non-compete restrictions are agreed upon by the employer and employee, and such agreements must not violate laws or regulations. After the termination or dissolution of the labor contract, the non-compete period for the aforementioned personnel to work for competitors producing or operating similar products or engaging in similar businesses, or to start their own business producing or operating similar products or engaging in similar businesses, shall not exceed two years.

 
 

 
[1] The author's perspective
Non-compete is a legal method used by employers to protect their trade secrets. Based on legal provisions or mutual agreements, it restricts employees from engaging in business that competes with the employer after leaving, including not working for other business units that produce similar products or operate similar businesses with competitive or other conflicting interests, not establishing enterprises with the same business scope as the employer, and not producing or operating similar products or businesses that compete with the employer. Notably, such non-compete restrictions must be accompanied by certain compensation to the employee.

In practice, when investigating non-compete disputes, some companies, in addition to common methods, may inquire about former employees' whereabouts from the competitor's front desk and secretly record, or hire private investigators to track and record. Some companies even check the competitor's temperature registration records to prove that employees are indeed working there after switching jobs. In this case, Baidu's evidence significantly contributed to its lawsuit victory, but does this evidence itself infringe on others' privacy rights? The author believes that while some employees' failure to comply with non-compete agreements constitutes a breach of contract, the legality and reasonableness of such evidence-gathering methods remain debatable.