My non-compete says “the whole industry”: what needs checking?

What the October 2025 analysis emphasises

Morgan Lewis explains that China’s Supreme People’s Court Interpretation II, effective September 1, 2025, focuses on the information the employee actually accessed and the proportionality of restrictions. It distinguishes in-employment and post-employment arrangements, and notes that separate compliance guidelines issued by the Ministry of Human Resources and Social Security are not binding law. Recommendations about percentages or penalties in those guidelines should not be presented as one nationwide compensation formula.

Compare the restriction with your actual role

Keep the clause, restricted work, territory, duration and compensation terms. Record your duties and categories of information accessed without copying the secret itself. Compare the new role’s activities with the claimed restriction. A familiar sector label is less precise than the actual work and information involved. Under Interpretation II, the judicial text addresses a worker’s request that the restriction does not take effect if you did not access trade secrets or IPR-related confidential information, and to invalidate disproportionate parts of a clause.

Keep payments and notices in order

Record compensation received, missed periods, employer notices and your responses. Ask for the claimed scope and basis in writing. Do not assume a missed payment automatically frees you to ignore every obligation, or that a broad clause is necessarily enforceable merely because you signed it.

Before accepting a new role or settling

Take the documents, actual duties and new role description for advice on scope, procedure and applicable local rules. Keep confidentiality obligations distinct from non-compete obligations: joining another business and retaining the former employer’s confidential files are different questions. Do not upload secret documents to public research tools. If you believe the restriction is disproportionate, you may ask a court to confirm that specific portions are invalid, rather than treating the whole clause as void.

Example: sector overlap versus restricted activity

Hypothetical illustration: a clause names a broad industry, while the proposed job has different duties from the old role. Make a comparison of duties, territories, duration, payment and categories of information actually accessed. Ask an adviser: “Which specified activities are restricted, and how do they relate to the information I knew?” Keep the confidential information itself out of the comparison. This tests the claimed scope without declaring the clause void or assuming you can ignore it.

Next steps if the issue is unresolved

If the employer insists on a broad interpretation, ask for a written explanation of the scope and its basis. If you are considering a new role, seek advice with your documents and the new job description. If you believe the clause is unenforceable or disproportionate, you may raise the issue in a legal proceeding. The guidelines suggest that employees may complain to the labor bureau if agreed compensation is not paid, but this does not replace a court challenge on scope.

Need to take the next step?

More from this country