There are the following main differences between a statutory non-compete and a contractual non-competition:
Different applicable entities: the statutory non-compete mainly applies to the directors, managers and other senior management personnel of the company, while the contractual non-compete applies to ordinary employees, especially those employees who have access to the company's trade secrets.
Mandatory differences: a statutory non-compete is an obligation stipulated in a mandatory clause of the law, and the parties cannot choose the application of the norm, while a contractual non-compete is an arbitrary norm that the parties can choose whether to apply or not.
The duration of the restriction is different: the statutory non-compete period is usually applicable to the duration of the company's senior management relationship, and the obligation will cease to exist after leaving office; On the other hand, the non-compete agreement applies to a certain period after the employee leaves the company, and the length of the period is freely agreed upon by both parties.
Different purposes: the purpose of the statutory non-competition is mainly to safeguard the normal operation and interests of the company, and to prevent senior management from taking advantage of their positions to damage the interests of the company; The purpose of the non-compete agreement is mainly to protect the company's trade secrets and core competitiveness, and to prevent employees from leaking or improperly using the company's trade secrets after leaving the company and causing losses to the company.
In general, although statutory non-competition and contractual non-competition are both forms of non-competition, there are obvious differences in terms of applicable subjects, mandatory, restriction periods and purposes. When formulating a non-compete policy, an enterprise should choose an appropriate non-compete method based on the actual situation, ensure compliance with the law, and protect the legitimate rights and interests of employees.
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