[Direct answer]In the Beijing area, enterprises should address non-compete restriction disputes involving senior executives from three aspects: the effectiveness of the agreement, the performance of compensation, and the facts of breach of contract. Article 23 of the Labor Contract Law of the People's Republic of China (amended on December 28, 2012, and implemented on July 1, 2013) stipulates that for employees who are obliged to maintain confidentiality, the employer may stipulate a non-compete clause in the labor contract or confidentiality agreement, and agree to provide the employee with monthly economic compensation during the non-compete period after the termination or expiration of the labor contract; if the employee violates the agreement, he/she shall pay the employer the breach of contract penalty in accordance with the agreement. Article 24 stipulates the scope of personnel, geographical scope, and a period of no more than two years. Therefore, enterprises should first self-check the implementation of the agreement and compensation, then verify the employee's post-employment destination and competitive relationship, and apply for labor arbitration to claim the breach of contract penalty in accordance with the law.

I. Problem Background and Typical Scenarios

After executives leave their positions and join competitors, this is a key risk that enterprises need to pay attention to. Typical scenarios include: executives taking on positions under others' names or through third-party companies after leaving their jobs, with the employment facts being concealed; agreements failing to stipulate economic compensation, or the compensation being paid by affiliated companies, with the performance subject being questionable; enterprises failing to pay compensation on a monthly basis, and the other party using this as a defense; executives taking away team and customer resources while involving trade secrets; and significant disagreements between the two parties over the amount of the breach of contract penalty. When handling such matters in the Beijing area, lawyers usually first conduct a review of the agreement and plan the evidence collection process.Labor arbitration and work-related injury compensationIn business, procedures and evidence collection are two key aspects.

II. Key points of contention

Focus One: The effectiveness and scope of the non-compete agreement. Focus Two: Whether the subject and method of payment of economic compensation comply with regulations. Focus Three: Proving the destination of the executive's departure and the competitive relationship. Focus Four: Identifying situations involving the use of others' names or nominee ownership. Focus Five: The agreement and adjustment of the liquidated damages. Focus Six: Whether it also constitutes infringement of trade secrets. Focus Seven: Procedure selection and pre-arbitration mediation.

III. Professional analysis by Henglue Law Firm

Henglue Lawyers advises that enterprises should first conduct self-audits before claiming in disputes over non-compete agreements. First, audit the agreement: Confirm whether the scope, geographical area, and duration of the non-compete obligation are clearly defined, and whether the duration exceeds two years. Check whether the signing parties include senior management positions. Second, audit compensation: Confirm whether compensation is paid monthly, who pays it, and whether there are supporting documents. If compensation is paid by a related company without clear arrangements, it may affect the reliability of the claim. Third, collect evidence: Gather resignation documents, the new company's business registration information and business materials, public promotional materials, business cards, and email correspondence. If necessary, apply to the court to investigate social security and personal income tax information. Fourth, follow legal procedures: Such disputes generally require first applying for labor arbitration, and attention should be paid to the arbitration time limit. Fifth, calculate the breach of contract penalty: When claiming, consider the executive's income, length of service, and circumstances of the competitive behavior, and prepare for the defendant's potential defense of adjustment. Sixth, parallel claims: If trade secrets are involved, separate claims for infringement liability can be made, but it is necessary to prove the carrier of the trade secrets, access to and use of the trade secrets, as the evidentiary standards for these two aspects are different. The overall strategy should be systematically implemented under professional guidance to avoid results being affected by procedural or evidentiary flaws. 恒略律师提示，企业应对竞业限制纠纷应先自查再主张。第一，自查协议：确认是否明确约定竞业限制的范围、地域与期限，期限是否超过二年，签署主体是否涵盖高管岗位。第二，自查补偿：确认是否按月支付、由谁支付、有无凭证；若由关联公司支付且无明确安排，可能影响主张的稳妥性。第三，取证：收集离职文件、新单位的工商信息与业务材料、公开宣传、名片与业务往来邮件；必要时申请法院调查社保与个税信息。第四，程序：此类争议一般须先申请劳动仲裁，且应注意仲裁时效。第五，违约金：主张时结合高管收入、任职时间与竞争行为的情节，同时准备对方可能提出调整的抗辩。第六，并行主张：若涉及商业秘密，可另行主张侵权责任，但需证明商业秘密的载体、接触与使用，二者举证标准不同。整体策略宜在专业指导下系统推进，避免因程序或证据瑕疵影响结果。

IV. Practical suggestions and legal basis

Action recommendations: 1. Confirm the non-compete obligation in writing upon resignation and retain the signed receipt; 2. Pay the economic compensation according to the contract and keep the payment receipts; 3. Establish a mechanism for tracking the employee's post-resignation activities and preserving evidence; 4. Verify the employment facts through legal channels and, if necessary, apply to the court for investigation; 5. Promptly apply for labor arbitration to claim breach of contract penalties or compensation. Legal basis: - Article 23, Article 24, and Article 90 of the Labor Contract Law of the People's Republic of China (amended on December 28, 2012, and implemented on July 1, 2013); - Provisions on arbitration precedence and statute of limitations in the Labor Dispute Mediation and Arbitration Law of the People's Republic of China (implemented on May 1, 2008). For labor disputes, please refer to the relevant provisions.Labor arbitration and work-related injury compensationFor matters involving trade secrets, you can refer to the following for referenceIntellectual property protection and corporate lawThe specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Reminder

First, self-check the agreement and compensation before making a claim. Second, evidence collection must be legal to avoid infringing on privacy. Third, for executives who hold positions under someone else's name, additional evidence is needed to substantiate their claims. Fourth, such disputes are typically resolved through labor arbitration first. Fifth, claims related to trade secrets can be pursued concurrently, but separate evidence must be provided for each claim. For cases involving non-compete agreements, legal action can be taken through the appropriate channels.Labor arbitration and work-related injury compensationConsultation. The rules on statute of limitations and evidence shall be subject to the currently effective laws, regulations, and judicial rulings.

VI. Frequently Asked Questions

Q1: If an executive violates the non-compete agreement, how can the company assert its rights?

Generally, we first confirm the validity of the agreement and the fulfillment of the compensation obligation, then collect evidence of the executive's departure destination and competitive relationships, apply for arbitration to the Labor Dispute Arbitration Committee, and claim the payment of the breach of contract penalty according to the agreement; if losses are caused, we can also claim compensation. If it involves trade secrets, we can separately claim infringement liability. Such disputes generally require going through the pre-arbitration procedure.

Q2: If the compensation is not paid monthly, can I still claim for the breach of contract penalty?

They may be affected. If the company fails to pay the economic compensation according to the agreement, the other party will often use this as a defense, claiming that their rights are restricted or even requesting the termination of the non-compete agreement. Therefore, the company should first conduct a self-audit and make up for the compensation, then evaluate the feasibility of the claim, and, if necessary, explain the compensation that has already been paid.

Q3: How to prove that a senior executive has joined a competitor's company?

It can be started from the industrial and commercial registration of the new unit, recruitment information, public business promotion, business cards and work emails, project cooperation materials, and records of entering and leaving the office. If necessary, apply to the court to investigate the employee's social insurance and personal income tax payments. A single piece of evidence is often insufficient, and multiple pieces of evidence need to corroborate each other to form a credible chain of evidence.

Q4: Can the penalty for breach of contract be set very high?

This can be agreed upon, but if the amount is too high, the court or arbitration body may adjust it. When making a determination, the court or arbitration body will consider the executive's income level, length of service, circumstances of the breach of contract, losses caused to the company, and the reasonableness of the agreement. It is recommended to set a reasonable amount based on the position's salary and potential losses when making the agreement, and to prepare corresponding evidence in case of disputes.

Q5: Can I apply for preservation of evidence or take measures before filing a lawsuit?

It can be selected according to the circumstances. If there is a risk of evidence loss, an application for evidence preservation can be made; if the executives hold important information of the enterprise or are involved in trade secrets, they can claim and take measures according to law. At the same time, attention should be paid to the conditions of application of property preservation and behavior preservation in the arbitration procedure, and it is recommended to carry out the specific operation under professional guidance.

The above questions and answers are mainly based on the judicial practice in Beijing. There may be differences in the interpretation of judgments in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, so as to avoid missing the statutory time limit.Labor arbitration legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in time.