# 21st Century Luddites: Understanding Technology Resistance in the Workplace

## Introduction

The term "Luddite" originated from 19th-century English textile workers who destroyed machinery they believed threatened their livelihoods.

In the 21st century, this term has evolved to describe individuals who resist or oppose new technologies, not necessarily through destructive means, but through reluctance to adopt or embrace technological changes in their work environment.

## Characteristics of Modern Luddites in the Workplace

### Age and Experience Factors
While not exclusively age-related, resistance to technology often correlates with:
- Employees who have established successful work methods over many years
- Individuals who may not have grown up with rapid technological advancement
- Workers who have witnessed previous technology implementations that failed or caused disruption

### Professional Background
- Long-term employees who have mastered traditional ways of working
- Individuals in roles that were traditionally non-technical but are becoming digitized
- Professionals who value proven methods over experimental approaches

# 21st Century Luddites: Understanding Technology Resistance in the Workplace

## Introduction

The term "Luddite" originated from 19th-century English textile workers who destroyed machinery they believed threatened their livelihoods.

Title:

Content: I. BACKGROUND
The second chapter of the Anti-Unfair Competition Law, "Unfair Competition Acts," clearly lists a number of acts that belong to unfair competition and should be regulated by the Anti-Unfair Competition Law, such as market confusion, commercial bribery, false propaganda, infringement of trade secrets, and so on.
However, in the actual operation, the acts involving unfair competition are diverse and varied, and are not limited to the types of acts explicitly listed.
Article 1 of the “Interpretation of the Supreme People ’ s Court on Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People ’ s Republic of China ” stipulates that“ if an operator disrupts the market competition order and damages the legitimate rights and interests of other operators or consumers, and violates Chapter II of the Anti-Unfair Competition Law and the provisions of the Patent Law, Trademark Law and Copyright Law, etc. ” Refers to the following provisions:
"Article 2 In their production and operation activities, operators shall follow the principles of voluntariness, equality, fairness and good faith, and abide by the law and business ethics.
The term "act of unfair competition" as used in this Law refers to the act of a business operator in the course of production and business operation that violates the provisions of this Law, disrupts the order of market competition and harms the legitimate rights and interests of other business operators or consumers.
"Business operators" as used in this Law refer to natural persons, legal persons and unincorporated organizations engaged in the production, operation or provision of services for commodities (hereinafter referred to as commodities, including services). "
This article is a general provision of the anti-unfair competition law referred to in this article, which is used to regulate and protect market behavior that cannot be classified as protected by other special laws and regulations or special provisions.
In the last article of this article, "Caesar 's to Caesar, God' s to God - from the" anchor job-hopping "of the multi-case judgment < Anti-unfair Competition Law > general provisions of the rules of adjudication evolution", introduced three cases involving the live platform anchor job-hopping, poaching of different periods of cases, discussed its different adjudication results and the "anti-unfair competition law" second rule of adjudication. Evolving.
The discussion is limited to only webcasting an industry, because the industry is a new business model that has emerged in recent years, and its business model, recognized business ethics, etc. are gradually stereotyped, with certain particularity, which is a good starting point for discussion.
This article hopes to extend the special industry to the general industry, discuss the unfair competition disputes caused by employees jumping jobs or being poached, and explore the boundary position of fair competition and unfair competition from the perspective of the Anti-Unfair Competition Law, and once again review the general provisions of the Anti-Unfair Competition Law.
Legal issues that may be involved in the employee transition process
After employees leave the former enterprise, whether they start a new enterprise on their own, or actively jump or passively dig into the post enterprise, the legal issues involved are not simple.
For example, there may be contractual disputes with the original enterprise involving the civil code and the labor contract law; may involve disputes over the ownership of intellectual property rights under the copyright law, the trademark law, and the patent law; may also involve various disputes under the anti-unfair competition law, or even the crime of violating trade secrets under the criminal law.
Under the Anti-Unfair Competition Law discussed in this article, the most disputes caused by employees changing jobs are of two types:
The first category is disputes concerning the infringement of trade secrets, in which former companies generally claim that employees take away the company ’ s trade secrets, such as the company ’ s technical secrets, or the company ’ s business secrets, for use in the latter company or in companies where employees start their own businesses.
Since China has not yet enacted separate legislation for the protection of trade secrets, such as copyright, trademark and patent, and there is no single "Trade Secret Protection Law", such disputes are subject to the provisions of Article 9 of the Anti-Unfair Competition Law:
"Article 9 Business operators shall not commit the following acts that infringe on trade secrets:
(1) Obtaining the trade secrets of the right holder by theft, bribery, fraud, coercion, electronic intrusion or other improper means;
(2) Disclosing, using or allowing others to use the trade secrets of the right holders obtained by the means mentioned above;
(3) Disclose, use or allow others to use the trade secrets in their possession, in violation of the duty of confidentiality or in violation of the requirements of the right holder regarding the preservation of trade secrets;
(4) abetting, inducing or aiding others to violate the duty of confidentiality or to obtain, disclose, use or allow others to use the trade secrets of the right holder in violation of the requirements of the right holder.
Any natural person, legal person or unincorporated organization other than the business operator who commits the illegal acts listed in the preceding paragraph shall be deemed to have infringed trade secrets.
A third party who knowingly or should have known that an employee, former employee or other unit or individual of the right holder of a trade secret commits the illegal acts listed in the first paragraph of this Article and still acquires, discloses, uses or allows another person to use the trade secret shall be deemed to infringe the trade secret.
The term "trade secret" as used in this Law refers to commercial information such as technical information and business information that is not known to the public and has commercial value and has been subject to appropriate confidentiality measures by the right holder.
The second category is not involved in the infringement of trade secrets disputes of employees job-hopping cases, such cases, former companies generally advocate that employees job-hopping or poaching in the company take away the trading opportunities and competitive advantages that belong to the former company, resulting in the corresponding losses of the company, and advocating that the employees and the company have engaged in unfair competition.
Since there is no special special provision in the Anti-Unfair Competition Law to regulate such disputes, such disputes are often judged by the general provisions of the Anti-Unfair Competition Law, that is, the provisions of Article 2.
For the first category, the employee job-hopping is not the key to the case, and the general infringement of trade secret disputes are not too special, according to the ordinary infringement of trade secret disputes can be handled, generally is through a variety of evidence to investigate whether the information involved is a trade secret, whether the job-hopping employee violated the confidentiality agreement or the confidentiality obligation to disclose the trade secret.
This article mainly examines the second category of cases where the general provisions of the Anti-Unfair Competition Law are applied to adjudicate, that is, employees who do not involve the infringement of trade secrets disputes.
Through these cases, the spirit of the general provisions of the Anti-Unfair Competition Law is again explored – the distinction between Caesar ’ s to Caesar and God ’ s to God, that is, the part that should be left to the laws of the market to adjust, and the part that should be left to the law to adjust.
III. CASE DISCUSSION
1.
Case 1: [(2009) Minshenzi No. 1065] - "kelp quota" case
This case is typical of the annual report of the Supreme People ’ s Court on intellectual property cases (2010), which named the case “kelp quota case ”.
Although it is an old case more than ten years ago, the Anti-Unfair Competition Law has also undergone revision, but the case has still been cited in many similar cases in the judicial documents, and there is little dispute. Justification Judgment of the behavior of departing employees who use their personal skills to work for a company that has a competitive relationship with the original organization.
These rules of adjudication have been used so far, so that when it comes to unfair competition disputes caused by employees changing jobs, it is necessary to introduce this case in detail first.
Ma has worked in the Shandong Food Company for 20 years, mainly engaged in kelp processing and export work.
Japan's Hokkaido Fishery Federation set quotas for Sino-Japanese kelp trade and handed them over to COFCO International for unified management of the kelp quota.
Since 2001 to 2006, COFCO has allocated a quota for the export of kelp to Shandong Food Company, mainly by Madaqing on behalf of Shandong Food Company to sign a contract with the Japanese company.
On April 3, 2007, Japan's Hokkaido Fishery Federation sent a letter to COFCO International, saying that it was uneasy to ensure the quality of the kelp before the loss of Shandong Food Company personnel, and that the Japanese kelp industry had trusted Ma for many years, and asked Beijing COFCO to use the company as a window for Weihai kelp.
Shengkedacheng Company eventually obtained 310 tons of kelp export quota in Weihai, Shandong Food Company once lost all kelp quota.
One of the details is that Ma is not a senior executive of Shandong Food Company, does not have legal competition restrictions obligations, nor has he signed any competition restrictions agreement with Shandong Food Company, that is, does not have the agreed competition restrictions obligations.
More than 400 staff representatives of Shandong Food Company have visited the province several times.
The Ministry of Commerce of the People's Republic of China (CPC) and the China Finance and Trade Union of the People's Republic of China (CPG) have held several meetings to coordinate with the COFCO Group.
It was not until July 2007 that Shandong Food Company obtained the 2007 kelp quota of 320 tons, but by this time the kelp harvest season had passed.
The Shandong Food Company accused Ma and his company of unfair competition by seizing the "life support money" of thousands of retired, retired and working employees of the Shandong Food Company.
The court of first instance upheld the lawsuit filed by Shandong Food Company.
Ma Mou and Shengkedacheng Company filed an appeal, and the second instance judgment of the Shandong Provincial High People's Court quashed the original judgment.
Shandong Food Company refused and applied for retrial.
During the second trial, the retrial applicant, the Shandong Food Company, through the All-China Federation of Trade Unions and two deputies to the National People's Congress, respectively reported to the Supreme People's Court the situation and put forward proposals. Social stability, strongly demand that Ma be determined to constitute unfair competition, and stop it from competing with Shandong Food Company for the export of kelp quotas to Japan.
However, under such pressure, after careful consideration, the Supreme Court still firmly believes that the second instance judgment is not improper, and has reasonable grounds to reject the retrial application of Shandong Food Company.
The retrial judgement stated that:
Although the quota for kelp exports to Japan has remained relatively stable for a long time, it is still a competitive and open business opportunity.
For enterprises that have obtained the quota for a long time, such as Shandong Food Company in this case, obtaining the quota for kelp exports to Japan is a commercial opportunity that can be reasonably expected to be obtained under normal circumstances, and can become a legal benefit protected by law, especially the anti-unfair competition law.
In the first instance, the "competitive advantage" is regarded as the legal benefit protected by the anti-unfair competition law.
It is not unreasonable for employees to plan to set up a new company while they are in office and make proper preparations for their careers after leaving office.
The system of restricting competition is a means of legal protection given to the operators concerned by the law, and the Shandong Food Company has failed to protect itself, and the adverse consequences arising therefrom should be borne by itself, and no blame should be placed on the natural world.
Even if Ma attracted the seaweed business personnel of Shandong Food Company to leave to work for themselves, as long as they did not use improper means, lobbying others or recruiting talents themselves did not violate the law.
As for whether or not Ma left office without authorization, it is a matter for labor disputes to be resolved, and it does not of course constitute unfair competition.
Free competition and fair competition are the two basic principles of market economy, and they have their own emphasis and balance each other.
Free competition will effectively optimize the allocation of market resources, reduce prices, improve quality and promote material progress, thus benefiting the whole society.
However, free competition is not without limits, excessive free competition will not only cause chaos in the competition order, but also harm social and public interests, it is necessary to use fair competition rules to limit and correct free competition, and guide operators to compete for business opportunities through fair, appropriate and legal means of competition.
Therefore, although the people's courts may apply the general provisions of the anti-unfair competition law to safeguard fair competition in the market, they should also pay attention to strictly grasping the applicable conditions to avoid improper interference and obstructing free competition in the market.
Where the law already provides for exhaustive protection through special provisions, it is not appropriate to apply the general provisions of anti - unfair competition law to regulate it;
In the sense of anti-unfair competition law that regulates market competition order, the principle of good faith is more embodied in the form of recognized business ethics.
Business ethics should be judged according to the ethical standards of market transaction participants in a particular business field, which is different from individual morality and can not be equated with general social morality, which embodies a kind of business ethics.
The business ethics required by the anti-unfair competition law must be universally recognized business ethics, which refers to the universally recognized and accepted standard of behavior in a specific business field, which is generally recognized and general, and should be the common and universally recognized standard of behavior of the transaction participants.
In the market economy environment, anyone can compete with anyone as long as they do not violate the law. The flow of labor or talents is also an inevitable requirement and an important aspect of market competition.
As laborers with learning ability, workers will inevitably master and accumulate knowledge, experience and skills related to their work in the process of enterprise work.
In addition to the case of business secrets belonging to the unit, these knowledge, experience and skills constitute an integral part of the employee's personality, which is the basis of his ability to survive and work, and can be freely used and used, which is obviously different from the job invention-creation or the job work results can become independent property or interests.
If an employee has the freedom to use his or her own knowledge, experience and skills after leaving his or her employment, and wins the trust of customers and forms a competitive advantage by using his or her own knowledge, experience and skills, he or she will not violate the principle of good faith and accepted business ethics except in the case of infringing on the trade secrets of the original enterprise;
In the absence of sufficient evidence to prove that Ma engaged in unfair competition, the investment loss or failure of competition caused by others' normal competition for business opportunities is a normal business risk, and the business opportunity can not be presumed to belong to him only because of historical accumulation and early investment.
In short, the case provides a lot of guidance: Although business opportunities are legal benefits under the Unfair Competition Law, they are not legal rights and can be freely contested; the general provisions of the Unfair Competition Law should be applied to avoid improper interference and hinder market competition. Even if the enterprise and the old owner compete for the market; the failure of competition is common, it can not be automatically presumed that the home is unfair competition, fair competition is protected; business ethics should be recognized by the industry, not only from the standpoint of one side, but also can not be equated with personal integrity; using legal means to attract talents is legitimate, talent flow is conducive to promoting competition.
The judgment in this case also concluded that the application of Article 2 (1) and (2) of the Anti-Unfair Competition Law shall constitute unfair competition under the following conditions:
First, the law does not make special provisions for such competition;
Second, the legitimate rights and interests of other operators have indeed been harmed by the competition.
The third is that this kind of competition behavior is unjustifiable or obligatory because it violates the principle of good faith and the accepted business ethics, which is also the key point of the problem and the key point of judgment.
The above three conditions that constitute unfair competition have been repeatedly invoked in similar cases since then, and none of the three conditions is indispensable.
This can be seen in the case below.
2.
Case 2: [(2023) Humin Shen No. 1501] — — “Jiayue Medical ” v.“ Minimally Invasive Heart ” Case
The original and the defendant in this case are innovative technology enterprises engaged in the research and development and manufacturing of medical devices such as heart valve repair devices, and there is a direct competition between the two.
Li was originally the technical person in charge of the plaintiff "Jiayue Medical" and signed a competition ban agreement.
The plaintiff claims that the defendant "minimally invasive heart" knew that Li had the obligation to prohibit competition, but still maliciously poached Li, so that he engaged in the system research and development work that competed with the plaintiff, and the defendant's malicious poaching caused the plaintiff's huge economic losses.
This case has gone through a first, second and retrial.
First, the court of second instance and the court of retrial both held that it did not constitute unfair competition, of which, the court of retrial held that:
Human resource is an important resource for operators to participate in market competition, and talent flow is the basic form for the market to play the role of resource allocation.
The competition of the operators to the excellent talents leads to the flow of talents, and the outflow of talents loses the competitive advantage and then causes losses, but it cannot be determined that the inflow of talents is unfair competition.
The evaluation of whether the behavior of the operator in the competition of human resources constitutes unfair competition should be considered from the following two aspects: First, whether the behavior of the operator violates the law, violates the principle of good faith and business ethics, and second, whether the behavior of the operator disturbs the normal order of talent flow and then affects the reasonable allocation of human resources in the market.
Whether Li Mou resigns as a director of Jiayue Medical Company has legal effect, and whether Li Mou has a business prohibition obligation on Jiayue Medical Company when he enters the Minimally Invasive Heart Company, all belong to the internal legal relationship between Li Mou and Jiayue Medical Company, and the recruitment behavior of the third-party Minimally Invasive Heart Company is not legally binding.
The commercial ethics standard in the anti-unfair competition law is not the duty of reasonable care, but the standard of behavior generally accepted by market participants in the commercial field, that is, the ethical standard of economic people.
In this case, there is no evidence to show that in the recruitment process, the company clearly knew that Li Mou had the obligation to prohibit competition and deliberately induced and helped Li Mou to violate the obligation to prohibit competition, so it is difficult to say that it violated the principle of good faith and business ethics.
It can be seen that the difference between this case and the "kelp quota" case is that the job-hopping employees have no obligation to prohibit competition in the "kelp quota" case, but in this case the job-hopping employees are prohibited from competing in the business.
However, even so, the court held that the prohibition of competition obligation is the internal legal relationship between the employee and the former company, which is not binding on other parties, and because the company did not intentionally induce and help Li to violate the prohibition of competition obligation, it does not constitute unfair competition.
3.
Case 3: [(2021) Beijing 73 Minzhu 2969] - "Houda" v. "Ruida" case
This case is very similar to Case 2, the job-hopping employees in Case 2 have the obligation to prohibit competition, and the job-hopping employees in this case have an exclusive employment relationship with the company.
In this case, the plaintiff "Houda" company and the defendant "Ruida" company are judicial examination training institutions, have a competitive relationship.
The former "Houda" lecturer Cai Mou and "Houda" company signed a "teacher teaching service agreement", the two agreed on "exclusive teaching relationship"; "Ruida" company knew or should know that Cai Mou and "Houda" company have an exclusive teaching relationship and still employ Cai Mou, resulting in a direct decline in the competitiveness and market share of Houda.
The case went through first and second trials.
The first instance ruled that Ruida company has unfair competition behavior.
However, the court of second instance quashed the judgment of first instance and held that:
The purpose of the Anti-Unfair Competition Law is to punish business operators for disrupting the order of market competition and harming the legitimate rights and interests of other business operators or consumers in their production and operation activities.
In the absence of special provisions by law, article 2 should be applied in strict accordance with the three prerequisites set out in the earlier entry into force judgment, so as not to hinder free competition in the market through improper interference.
In essence, this case is a dispute between the “Houda ” company and its lecturers in the performance of the relevant teaching agreement, and if any party has violated the contract, it should be bound by the labor contract law or the employment contract, and not the scope of anti-unfair competition regulations.
For the "Ruida" company to Cai and other lecturers, because the judicial examination (or legal professional qualification examination) training industry basically adopts a commercial operation mode, so by providing better development space or welfare treatment to attract talents is the operator usually take the means of competition, in line with the objective law of market competition.
Therefore, in the absence of evidence to prove that the "Ruida" company hired lecturer Cai Mou behavior is not in line with the actual situation of the industry, and violates the principle of good faith and recognized business ethics, "Ruida" company hired Cai Mou and other lecturers behavior is not improper or responsible.
The first is that the law does not make special provision for such competition, the second is that the legitimate rights and interests of other operators are actually harmed by such competition, and the third is that such competition is unjustifiable or liable because it violates the principle of good faith and generally accepted business ethics. It is also the key to the problem and the point of judgment.
It can be seen that the judgment ideas in this case and the judgment ideas of the first and second cases are in the same line, that is, the flow of talents is an objective law in market competition, and the use of legal means to attract talents, even if the attracted talents have exclusive teaching agreements, it is also subject to labor contract law, not the scope of anti-unfair competition regulations, and does not have irregularity or accountability.
4.
Case 4: [(2020) Beijing 73 Minzhi No. 1501] - "Faith Interaction" v. "Hot Hand Culture" Case
The case involved star hopping.
"Faith Interaction" and "Hot Hand Culture" are both performing arts economic companies, and the three-person singer group "Sunshine" was originally an artist group signed by Faith Interaction and signed exclusive contracts with the company.
"Faith Interactive" company advocates "hot hand culture" company maliciously instigated the three artists to constitute unfair competition.
The case went through one or two trials.
First, the court of second instance held that the "hot hand culture" company did not constitute unfair competition, which the court of second instance held:
"Faith Interactive" company and three artists signed an exclusive contract, the contractual legal relationship between the three should be subject to the relevant laws such as contract law, because the economic benefits arising from the signing of the contract obviously should not apply the provisions of the general provisions of article 2 of the anti-unfair competition law;
In the market economy, the three people as entertainers choose or replace the brokerage company according to their own situation, seek more and better resources for development, and pursue the maximization of their own economic interests. The hiring of a lawyer is not prohibited by law.
The court even pointed out that the legal interests protected by the anti-unfair competition law are free and fair market competition order.
Market competition is a kind of competition for market opportunities, the result of competition will inevitably involve the gain and loss of market opportunities or market interests between different operators, so market competition has the nature of harming others and benefiting oneself.
In addition to legal rights, it will create a "right of competitive advantage" artificially, and competitive advantage in free competition is always in a state of diminishing one another. The purpose of competition is also to compete for market resources and competitive advantage. Impropriety of competitive conduct.
From the above, it can be seen that this case has reexamined the concept of "economic man" in the "[Case 1] kelp quota case" to judge whether it violates business ethics.
In addition, although this case and case two and case three are related to the "kelp quota" case, but the case of this case is different from case two and case three, in case two and case three, there is no evidence that the process of changing employees was induced and helped by the post company. It is not against business ethics to intentionally induce or help the employee to violate the obligation to prohibit competition.
If you look at the wording of the judgment in case 2, does it mean that it is against business ethics if the company helps employees change jobs? At least in this case, the answer is no.
In this case, the company not only clearly knew that the three artists had exclusive contracts, but also took the initiative to hire lawyers for the three artists to help them terminate the contract while promising benefits.
But even then, the court still held that the post-corporate means were lawful and not unfair in the sense of anti-unfair competition law.
It can be seen that the judgment in this case has adopted a relatively more market-biased view, holding that the bottom line of legal protection should not be too high.
5.
Case 5: 【 (2020) E 01 Minjun No. 636 】 — — “Fast and Happy Movement ” v.“ Yo Ka Yo ” Case
In this case, "fast happy move" and "friends" are fitness service companies, the official once worked in the "fast happy move" office, responsible for the company's new store location in the Wuhan area, license management, customer development, etc.
Later, the official left, and created his own fitness brand "Yo Ka Yo", the gym was set up a few hundred meters from the original company, and in turn dug up the original company "fast happy movement" of a number of fitness coaches.
It is worth noting that the official and the original company "fast happy move" signed a competition ban agreement, but after leaving office, "fast happy move" did not pay compensation to the official.
The case went through first and second trials.
The court ruled that the use of other people's fitness coaches, in essence, is to directly seize the fruits of other people's competition - not only the high-quality fitness coach resources that enterprises spend a lot of human and financial resources, but also the customers that enterprises have accumulated through fierce competition and long-term management.
After reading the previous article of this article, "Caesar's to Caesar, God's to God - from the" anchor job-hopping "of the multi-case judgment < Anti-Unfair Competition Law > general provisions of the rules of adjudication evolution" readers may be impressed, the wording and views of the first trial judgment in this case are very similar to the wording and views in the case 1 introduced in the previous article, the result is naturally the same, all companies that implement poaching. Correctly snatched the fruits of talents cultivated by the original company, and the behavior constituted unfair competition.
In fact, the two cases came from the same court.
However, the first sentence was quashed in the second instance.
The Court of Second Instance held that:
For market subjects, the freedom of competition is the foundation, the maintenance of free competition can ensure the optimal allocation of resources and the maximum efficiency of the market, and only those acts that constitute unfair competition require the intervention of the anti-unfair competition law.
Therefore, when applying the general provisions of Article 2 of the Anti-Unfair Competition Law to regulate the market behavior of business entities, it is necessary to carefully delineate the legal boundary between unfair competition and freedom of competition to prevent excessive interference with freedom of competition;
In order to make its internal human resources optimization, fitness services and fitness products more competitive in the market, but also more attractive to consumers, recruit other companies and store fitness professors, this fierce competition is itself the embodiment of the fitness industry market free competition.
Second, the knowledge, experience and skills acquired and accumulated by laborers in the course of their work, except in the case of trade secrets belonging to the unit, constitute an integral part of their personality, and laborers have the freedom to use them independently after leaving their jobs.
As a fitness coach, the knowledge, experience and skills acquired by the former employees through learning, training and practice in the course of the work of the company, in addition to the situation of the business secrets of the company, is the reflection of their own ability accumulation, and belongs to the internalized personality component of the employees.
Therefore, it is their right and freedom to use the knowledge, experience and skills they have learned in the company to serve the competing company, and their normal work behavior in the company to provide fitness services meets the industry requirements; and
Although the job-hopping employees signed a competition restriction agreement with the original company, the effectiveness of the agreement is doubtful because the original company did not pay compensation.
In this case, the Court of Second Instance adopted the view that the knowledge, experience and skills accumulated by employees in the course of work constitute an integral part of personality except in the case of trade secrets of the unit, and that employees have the freedom to use this part in their future work.
IV. CONCLUSIONS AND RECOMMENDATIONS
In recent years, with the vigorous development of new industries and new formats and the intensification of "internal volume (competition)" in some industries, the market's desire for talent has gradually increased, and "people-oriented" enterprises have also seen more and more high-value employees.
At the same time, the legal awareness of various enterprises has gradually increased, and the unfair competition disputes between employers caused by the talent flow of such employees have naturally increased.
The five cases in this article, in addition to the typical case in the early years of the "kelp quota" case, are the final adjudication cases of various courts in the past three years, in these cases, the case is not the same, the adjudication process also has twists and turns, for example, some cases of first and second instance judgment results are different.
However, in the end, the court ruled that the employee's move to the new company or being poached into the new company did not constitute unfair competition.
This is not the result of a deliberate selection.
In the pure job-hopping disputes that do not involve the infringement of trade secrets, the trend of adjudication in recent years is indeed more inclined to protect the talent market of free competition.
It can be seen that in the case of the latter employer not using illegal means, but only promising benefits and even helping to cancel the contract, even if it is not very in line with the traditional virtue from the perspective of traditional morality, it will not be judged as violating business ethics and thus has the sense of "Anti-Unfair Competition Law".
For example, in many cases, from the perspective of traditional moral values, employees are trained by enterprises to accumulate skills, but in order to pay high wages and jump to competitors, the behavior of the original owner may not be in line with personal ethics, but in line with the so-called "economic man" choice.
In fact, if we change perspective, from the perspective of the entire market, the employee's job-hopping behavior is a fatal blow to the original owner, but the talent flow for the entire industry is conducive to breaking the monopoly pattern and promoting new good things.
On the one hand, when other laws such as the Civil Code, the Labor Contract Law and the Company Law can be applied to regulate the relationship between the two parties, or other provisions of the Anti-Unfair Competition Law, such as the provisions of Chapter II, can be applied. On the other hand, carefully define the height of business ethics, define business ethics from the perspective of all market participants, avoid looking at business ethics from the injured party, and distinguish it from "traditional virtue" and "personal morality" to prevent excessive interference in the free competition of the talent market, and create a relaxed legal environment for the flow of talents and free competition of operators.
After all, Article 1 of the Anti-Unfair Competition Law clearly states that the purpose of the law is not to stop competition, but on the contrary, to promote the healthy development of the socialist market economy and to encourage and protect fair competition.
In fact, the application of the general provisions of the Anti-Unfair Competition Law should uphold the principle of prudence and humility, which has become the consensus in judicial practice in recent years, even if this article and the previous case were revoked in the first instance judgment, it has also stated that the principle of prudence and humility should be upheld, but the specific application of time scales are different.
In such a legal environment, how should companies respond?
On the one hand, as an enterprise that hires high-value employees in important positions, if evaluated, the employee will bring unacceptable losses to the enterprise, then it is still necessary to sign a competition ban agreement with employees in a timely manner to avoid unacceptable losses at a certain predictable cost.
Although in the above case, the court will not judge unfair competition in the post-enterprise because of the existence of a competition prohibition agreement between the employee and the original enterprise, this does not mean that the economic loss of the original enterprise can not be compensated.
If a non-competition agreement is signed, and the original enterprise pays compensation according to the agreement after the employee leaves office (it is important to pay compensation on time, see Case 5), then the original enterprise can completely claim the employee who violated the agreement according to the non-competition agreement, so that on the one hand, the employee will not violate the non-competition agreement at will.
In the case of "kelp quota" introduced above, Ma, who has worked in Shandong Food Company for 20 years and has rich kelp export experience, once left can cause the loss of all kelp export quota of the company, but was not valued by the company, did not sign a trade ban agreement, making such employees jump without pressure. The lesson.
On the other hand, as an enterprise that wants to hire employees with work experience, the act of "poaching" by legitimate means is protected by law, whether it is aware of the existence of a non-competition agreement between the employee and the original enterprise, because the agreement is signed by the employee and the original enterprise, and has internal relativity, and cannot be bound as a third person in the company.
"Legitimate means" here refers to legal means, including regular promise of benefits (high wages), promise of development opportunities (jobs), pay for job hopping costs (help pay for breach of contract), etc. These are the normal conditions of market competition.
However, we should pay attention to avoiding the use of illegal means, such as threats, coercion of employees to leave their jobs, etc., and the use of illegal means to poach corners is obviously not in line with business ethics to disrupt the order of market competition, which will be regulated by Article 2 of the Anti-Unfair Competition Law.
In addition, in addition to the issue of Article 2 of the Anti-Unfair Competition Law discussed in this article, other possible legal risks should not be ignored when hiring employees, such as trade secrets and other intellectual property disputes caused by employee turnover.
If possible, we will continue to discuss these issues in subsequent articles.
The content of this article is intended to provide a general guide to the subject matter.
Specialist advice should be sought about your specific circumstances.

Title:

Content: Today's Events (November 7)
The federal government made concessions to controversial labor relations legislation.
Labor Relations Minister Tony Burke has agreed to amend the Labor Relations Act.
Source: SBS
Government changes labour relations legislation to establish fairer corporate bargaining system
The federal government made concessions to controversial labor relations legislation.
In an attempt to pass the legislation in parliament before Christmas, Labor Relations Minister Tony Burke agreed to amend it.
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However, the business sector is of the view that the changes have not fully allayed their concerns.
The Labor Party believes the changes will help raise wages and establish a fairer corporate bargaining system.
In an interview with Sky News, Bock said the amended bill would prevent small businesses from entering multi-employer negotiations when a majority of employees voted against it.
He said that the amended bill could end the debate over the workplace, and that employers would not be forced to join together when they ultimately did not want to include the workplace in the agreement, or if someone did not want to participate in the processing industry action or voted against it at any stage.
Members call for more time to review the bill
Minority parties and independent lawmakers are calling for more time for lawmakers to review the federal government ’ s controversial Labor Relations Act, which seeks to raise wages.
The government has made concessions to the bill, hoping it can be passed before Christmas, but it still needs the support of some minority parties and independent lawmakers to pass it in the Senate.
Independent Senator Jacqui Lambie told Channel Nine that Workplace Minister Tony Burke only wanted to speed up the passage of the bill.
Lambie believes that most of the bill is very good, and he bluntly said that if Bock wants to pass before Christmas, he should split the bill.
He said it would be awkward for unions and big business representatives to attend the committee meeting on Friday because they didn ’ t have time to see the bill.
Cyber-attack or disclosure of personal data of technology companies working with the government
A tech company used by the Victorian government has been hit by a cyber attack and authorities are investigating.
The tech companies that were attacked worked with multiple Victorian departments, including the Department of Education and Training, which was hacked on Saturday.
Almost all families in Victoria have completed an enrollment health questionnaire, and medical records and information can be leaked.
Victorian Governor Daniel Andrews said an investigation was underway to determine if any personal data had been compromised.
Andrews said there is a possibility of a leak, authorities are investigating around the clock, and it is progressing well, he said, noting that the governor of Victoria is coordinating with the cabinet.
Once it is confirmed that someone ’ s information has been compromised, a statement will be issued and further action taken.
Australians lose $4 billion due to fraud this year, nearly twice as much as last year
The federal government has warned that Australians could lose $4 billion this year as a result of fraud, almost twice as much as in 2021.
Between January and August this year, nearly 140,000 damage reports were received, costing consumers, businesses and the economy hundreds of millions of dollars.
Financial Services Minister Stephen Jones has announced that Labor will establish a new anti-fraud centre within the Australian Consumer and Competition Commission in line with its election pledge.
He told Network Seven that the government is also planning to introduce new industry codes to stop scammers from extorting Australians.
Jones said that he would start with prevention, and then look at what can be done after the detection of a fraud bureau, and if there is a problem, then make sure that there are some remedial measures, such as personal status repair, and how to recover the money that people have been cheated, which he said requires the whole government department to do together.
COP27 climate compensation for the first time on the agenda
The United Nations Climate Change Conference in Sharm el-Sheikh, Egypt, was attended by nearly 40,000 people, including 120 heads of state.
Climate compensation is the first item on the agenda to discuss whether rich countries should compensate poor countries for the impact of climate change.
The leaders of India and China, the world ’ s two largest polluters, were not present, so there are doubts about what the conference will achieve.
For more than a decade, rich countries have refused to discuss funding for poor countries to help deal with the effects of global warming.
President Sameh Shoukry wants countries to move forward through more transparent negotiations.
He said that since the beginning of this year, there has been a special feeling among the delegations that had reservations in the past, and their position has changed.
He attributed it to the fact that, since the Paris Conference, it had been agreed that results could be achieved only with fairness, confidence and trust.
Xie Zhenhua, China ’ s special envoy for climate change, said at the thematic side of the Climate Change Conference that China has actively implemented the Paris Agreement, achieved remarkable results around the goal of carbon neutrality, established a “1 + N ” policy system, formulated a medium- and long-term greenhouse gas emission control strategy, promoted the construction of a national carbon trading market, and compiled and implemented a national strategy for adaptation to climate change.
According to preliminary calculations, last year's GDP carbon dioxide emissions were 3.8% lower than in 2020 and 50.8% lower than in 2005.
Xie Zhenhua said that China will work with all parties to contribute wisdom and strength to building a fair and reasonable global climate governance system with win-win cooperation.
Sri Lankan international cricketer arrested for rape
Sri Lankan international cricketer Danushka Gunathilaka, suspected of raping a 29-year-old woman in Sydney's Eastern District, was arrested by police at a hotel yesterday.
Gunasilaka, 31, came to Australia for the T20 World Cup with Sri Lanka but was unable to play due to a hamstring tear.
He was charged with four counts of sexual intercourse without consent, and his case was heard at Waverley Court in Sydney today.
Experts call on Reserve Bank of Australia to play bigger role in managing climate
Policy experts have called on the Reserve Bank of Australia to play a bigger role in managing climate risks.
In a review of the Reserve Bank ’ s paper, the Policy Development Center stated that the central focus of policy development would be to lead the shift to a net-zero economy and limit the impact on the financial system.
This demand for climate response and environmental sustainability is consistent with and does not conflict with the Reserve Bank ’ s legal obligation to make the best decisions on interest rates and payment systems.
This is the first extensive review of the Reserve Bank since the beginning of current monetary policy in the 1990s, and the report will be reported to Treasurer Jim Chalmers in March next year.
Missing bodies of two men found in Bevendale, NSW
The bodies of two men who went missing in the floods in Bevendale, NSW, have been recovered.
They were driving through a dam in Prestons Creek on the southern plateau last Monday when the dam was flooded and the two people were missing with their car.
Police divers first found the body of one of the men on Thursday afternoon while the body of the second man was recovered yesterday morning.
Although the body has not been formally identified, the police believe that it is the two men who are missing and are awaiting a forensic report.
In addition, as the flooding slowly recedes, large-scale clean-up work will be carried out in areas affected by flooding in NSW this week.
About 101 flood warnings were issued last night, with Forbes and Wagga Wagga the worst affected areas.
River levels in both areas have peaked in recent days, with residents returning to their homes to count losses.
But the NSW Department of Emergency Services said it was too early to assess the damage.
Ukraine and EU discuss future macro-financial aid to Ukraine
Ukrainian President Volodymyr Zelenskyy spoke by phone with European Commission President Ursula von der Leyen yesterday to discuss the EU ’ s current and future macro-financial assistance to Ukraine.
Meanwhile, the emergency department of Ukraine ’ s Krzysztof, which is controlled by the Russian army, said the Ukrainian army fired six Haimas rockets at a hydropower station, one of which hit the dam and caused damage.
The other five were shot down by anti-aircraft systems, and the Russian army accused the Ukrainian military of trying to create a humanitarian disaster.
In addition, the local administrative agency said that Ukrainian saboteurs damaged three high-voltage power towers, resulting in the interruption of water and electricity supply throughout the territory of Herzon Oblast, and the authorities are rushing to repair it.
China 's new crown number in the past six months, the highest emphasis on dynamic zero is completely correct
China recorded its highest number of new coronavirus infections in six months, with 4,610 cases recorded on Saturday, the highest since May 6.
At a press conference, health officials stressed that dynamic zeroing is “completely correct and the most cost-effective ” outbreak response policy.
Analysts expect the Chinese government to significantly relax the restrictions after the National People's Congress (NPC) meeting in March next year.
The Beijing Marathon was held again yesterday after two years of suspension, with 26,000 people participating. However, the athletes and staff must report their personal health conditions for 7 consecutive days before the race, complete the full vaccination, 48 hours after the race, the athletes can only obtain the race results certificate, and all the participants must abide by the anti-epidemic regulations such as no gathering within 7 days after the race.
Plane crashes into Tanzania, at least 19 dead
A small passenger plane carrying 43 people crashed on Lake Victoria, killing at least 19 people.
Tanzania ’ s prime minister said the two pilots were initially still alive and spoke to local people in the cockpit, but the two may have died after the call.
The cause of the crash is not yet known, but the Tanzanian Broadcasting Corporation reported that the plane crashed in a violent storm.
Kagera Police Commissioner William Mwampaghale said rescue efforts were ongoing.
He said the plane suffered problems and bad weather at about 100 meters in mid-air.
It was raining and the plane crashed into the water.
At present, the head of the army's rescue mission and the firefighters of Kagera province are on the scene, fully equipped, carrying out rescue work and trying to recover the plane.
The deputy governor of the People's Bank of China is under state investigation for serious violations of the law.
Fan Yifei, deputy governor of the People's Bank of China, is suspected of serious violations of discipline and is under investigation by the Central Disciplinary Commission.
Fan Yifei, 58, became a member of the Party Committee of the People's Bank of China from January 2015, and later became one of the six vice presidents.
The People's Bank convened a meeting and unanimously agreed that it fully embodies the strong determination and firm will of the Party Central Committee to deepen the comprehensive management of the Party and punish corruption with a zero-tolerance attitude.
The meeting requested that the party organizations at all levels of the People's Bank system and all party cadres deeply reflect, take the case as a guide, comprehensively strengthen the political construction of the party, and conduct politics in a clean and honest manner.
Sports News
T20 Cricket World Cup, this Thursday India will face England in the semi-finals in Adelaide, India beat Zimbabwe yesterday, coach David de la Veda believes will continue to win Thursday's match.
Pakistan will play New Zealand in the semi-final at Sydney Cricket Ground on Wednesday night.
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Published 7 November 2022 at 9: 33am, updated 15 minutes ago at 9: 51am
By Elsa Tsang, Timothy Wu, Hiu Ching Lam
Source: SBS

Title:

Content: Discussion on Equity Incentive Series Disputes and Suggestions for Related Disputes - Part II
AB
AnJie Broad Law Firm
Contributor
AnJie Law Firm is a full - service law firm providing commercial legal services on an international basis.
Our highly experienced lawyers have substantial skills and serve a broad base of practice areas including insurance & insurance, intellectual property, antitrust & competition, private equity, dispute resolution, mergers & acquisitions, capital markets, banking &; finance, energy and natural resources and real estate.
In the previous article in this series, we focused on the two types of disputes that are attributed to labor disputes or ordinary civil disputes in the current judicial practice.
China Employment and HR
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Introduction
In this series of articles, we focus on the current judicial practice due to the existence of two types of disputes attributed to labor disputes or ordinary civil disputes, so as to deal with specific disputes in the trial procedures, jurisdiction, application of the law, burden of proof allocation, trial caliber, etc. And...
In general, the cause, purpose, realization conditions, unlocking conditions and legal nature of employees' access to restricted shares are the main factors that distinguish the two types of disputes, and if the employee's access to equity incentives has the typical characteristics of labor relations that workers accept management, restraint and incentives by the employer, it is more inclined to belong to the category of labor disputes.
On the contrary, if the income obtained by employees through equity incentives is compared with labor remuneration, whether it is in bargaining power, the amount of incentives or the way of obtaining them, the relevant disputes are more likely to be recognized as civil and commercial disputes between equal subjects.
The Supreme People 's Court' s Interpretation on the Applicable Law in Labor Dispute Cases (2) (Draft for Solicitation of Comments) issued by the Supreme People 's Court on December 12, 2023 stipulates in Article 1: "[Acceptance of Equity Incentive Disputes] In the future, the qualitative problem of such disputes will have a clear basic guiding role.
According to the types of disputes contacted and handled, the author focuses on the relationship between jurisdiction, the application of law, the relationship between equity incentives and competition restrictions, and the handling of equity incentives when the labor contract is terminated. Involved in tax disputes and other common high-frequency equity incentive dispute categories are discussed.
III. Main types of disputes in equity incentive disputes
(i) Effect of Jurisdictional Clauses
If the dispute is based on the performance of specific terms of the equity incentive agreement, the judicial organs will generally determine that it is a contract dispute, then the relevant legal provisions of the contract dispute concerning the jurisdiction court shall apply. The value of the claim shall be determined in accordance with the jurisdictional provisions of the corresponding cause.
Specifically:
1. Jurisdiction as a labour contract dispute
Labor contract disputes do not apply to the agreed jurisdiction, but must apply the rules of jurisdiction of labor dispute cases.
This is not only because labor disputes have obvious personal attributes, and the scope of the agreement in the Civil Procedure Law is clearly different from that of "parties to disputes over contracts or other property rights and interests"; it is also because if labor disputes can be agreed to jurisdiction, it is very likely that in practice, the employer will exclude the right of the laborer to choose the court of jurisdiction by stipulating jurisdiction in the labor contract.
According to the Law on Mediation and Arbitration of Labor Disputes, if the place where the labor contract is performed or the place where the employer is located has jurisdiction, the arbitration stage may be given priority to the jurisdiction of the basic people's court at the place where the labor contract is performed.
If one of the parties is not satisfied with the outcome of the arbitration, he may bring a suit in the basic people's court where the arbitration commission is
2. Jurisdiction as a Contract Dispute
(1) Jurisdiction may be agreed
[1] Choice of Mainland Court Jurisdiction
According to Article 35 of the Civil Procedure Law, parties to disputes over contracts or other property rights and interests may, by written agreement, choose the jurisdiction of the people's court of the place where the defendant resides, the place where the contract is performed, the place where the contract is signed, the place where the plaintiff resides, and the place where the subject matter is actually connected with the dispute.
In view of the fact that the tendency of courts in different parts of China to adjudicate disputes on equity incentive has not yet been unified, the prosecution can choose the court of the place where the dispute has actual connection with the dispute to agree on jurisdiction.
[2] Jurisdiction of foreign courts may be agreed
According to Article 529 [1] of the Interpretation of the Civil Procedure Law (2022 Amendment), foreign-related contracts may choose in writing the jurisdiction of foreign courts where the defendant ’ s domicile, the place of performance of the contract, the place of conclusion of the contract, the place of the plaintiff ’ s domicile, the place of the subject matter, the place of infringement, etc.
Because equity incentive disputes do not belong to the exclusive jurisdiction of the court, the parties may agree to be governed by an overseas court with which the dispute has an actual connection, and in the case of such agreement, the Chinese court shall not accept such disputes.
If the agreed foreign court is the court with no actual contact place with the case, then the agreed jurisdiction clause is generally difficult to get the support of Chinese judicial organs.
(2) No court of jurisdiction
According to Article 23 of the Civil Procedure Law, litigation arising out of contract disputes shall be under the jurisdiction of the people's court at the defendant's domicile or the place where the contract is performed.
Article 18 (2) of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China further stipulates that the place of performance of the contract is not agreed or is not clear.
If the contract is settled immediately, the transaction act shall be the place of performance of the contract.
Regarding the determination of the place of execution of the equity incentive contract, the final judgment of the Beijing Minzhu No. 6 (2021) holds that when the transferee of equity is the plaintiff, the purpose of the equity transfer lawsuit is to transfer the ownership of equity, so the obligation to deliver equity is the specific obligation of the equity transfer contract, and the party that has the obligation to deliver equity is the place of the contract.
3. Jurisdiction as Other Disputes
(1) Jurisdiction may be agreed
At this time, as with the jurisdictional rules defined as contract disputes, the parties may exercise jurisdiction according to the people's court of the place where the defendant's domicile, the place of performance of the contract, the place where the contract was signed, the place where the plaintiff's domicile, the location of the subject matter, etc., has an actual connection with the dispute.
(2) No court of jurisdiction
Article 27 of the Civil Procedure Law stipulates that “lawsuits brought in disputes concerning the establishment of a company, the recognition of the qualifications of shareholders, the distribution of profits, and the dissolution of the company shall be under the jurisdiction of the people ’ s court in the place where the company resides ”.
Article 22 of the Civil Procedure Law stipulates that "litigation brought due to disputes such as the registration of shareholders, the request for change of company registration, the right of shareholders to know, the company resolution, the company merger, the company division, the company's capital reduction, and the company's capital increase shall be determined according to the provisions of Article 27 of the Civil Procedure Law." It is a lawsuit for distribution of profits filed by employees after they have acquired equity, etc., and such cases are subject to the jurisdiction of the people's court in the company's domicile.
(2) Applicable law
The law applicable to the adjudication of equity incentive disputes is also different due to different types of cases: in the case of contracts and companies, the adjudicator often applies only the general civil law, not the labor law; and in the case of labor dispute, the adjudicator often only applies the labor law, excluding the application of the general civil law.
1. As a contract dispute, it is allowed to apply foreign law to jurisdiction
For foreign-related commercial disputes, according to Article 41 of the Law on the Application of the Law on Foreign-related Civil Relations, "the parties may choose the law applicable to the contract by agreement."
If the parties have not chosen, the law of the habitual residence of the party whose performance best embodies the characteristics of the contract or other law most closely related to the contract shall apply. "
Therefore, the two sides can negotiate and choose to apply Chinese law or foreign law.
Employment contract disputes shall not be subject to foreign law
According to Article 4 [3] of the Law on the Application of the Law on Foreign-related Civil Relations and Article 8 (1) [4] of the Judicial Interpretation of the Law on the Application of the Law on Foreign-related Civil Relations, disputes involving the protection of workers' rights and interests shall be directly applicable to mandatory provisions under Chinese law, and the parties cannot be excluded by agreement.
In such cases, although the parties agree to apply foreign laws, the court may impose Chinese laws on the protection of workers' rights and interests in the case.
For example, in case No. 33956 of the People ’ s Republic of China (2018), although it was agreed in the equity incentive plan signed by the laborer and the employer that the notice, plan and entire agreement of the equity incentive agreement should be interpreted and governed by the laws of California, and the agreement also explicitly excluded the application of laws outside the laws of California.
However, the court still held that the option dispute in this case involves the protection of workers' rights and interests, and belongs to the situation where the law of the People's Republic of China has mandatory provisions on foreign-related civil relations, and should be directly applied to the Chinese law by using the mandatory provisions.
(3) Disputes related to equity incentives and competition restrictions
As the author emphasized in the last part of the series of articles, because the current practice of equity incentive disputes is basically based on the labor relationship between the incentive subject and the incentive object or the equity incentive agreement signed by the two parties, so although the legal relationship of equity incentive is different from the labor contract relationship, there is a close relationship between the two.
For example, in the relevant equity agreements and incentive plans, it is often explicitly agreed that employees will assume specific responsibilities under the labor contract, complete certain performance goals, and fulfill certain service periods as conditions for constituting the right to exercise equity.
In this regard, whether from the angle of labor contract relationship or from the angle of ordinary contract, it can be understood as a kind of consideration for employees to obtain equity incentive.
However, compared with the agreement on the right to travel conditions, some equity plans, the employee after leaving the competition [5] obligation is also agreed to be one of the conditions for the employee to obtain the right to exercise, that is, if the employee violates the obligation of competition, shall bear the corresponding breach of contract, one of the consequences is to lose the right to exercise.
In such disputes, it is usually the former employee who acts as the plaintiff to sue the company to confirm the validity of his right of action and then confirm the equity corresponding to the right of the company, and the company as the respondent to the previous employee violates the relevant agreement on the restriction of competition and thus refuses the exercise of the right of the former employee or negates the equity interest that he has obtained.
For such disputes, whether it is characterized as labor disputes or ordinary contract disputes, the key is whether the company as the operating entity and the employees who have a certain degree of understanding and benefit from the equity incentive plan have a clear agreement on the adverse consequences of the restriction obligation on the equity incentive exercise rights and whether they are willing to accept the agreement.
If it is clearly agreed that the employee ’ s obligation to limit competition and the adverse consequences of violating this obligation on the exercise of the right of stock incentive, if the employee who has not yet exercised the right of rights is disqualified, the company that has exercised the right can cancel or negate the rights that have been exercised and taken effect before, then if the employee does have a breach of the right, the adverse consequences arising therefrom shall be borne in the corresponding dispute.
If the company refuses the employee ’ s right to exercise or denies the employee ’ s right to exercise the right to exercise the right of equity incentive benefits, it should be supported by the court. (2020) The court adopted this attitude in the judgment of Zhejiang 01 Minjun No. 676. The influence of incentive, even if there is a restriction of competition after the worker leaves the employment, does not necessarily lead to the loss of the right to exercise or the right already exercised can be denied.
That is, if the behavior of competition restriction is to have adverse consequences on the employee's equity incentive, there must be clear contractual agreement or legal provisions.
(4) Treatment of equity incentive upon termination of labor contract
In practice, the employer from the conclusion of the equity incentive agreement with the employee to the completion of the exercise of power, often experience not short time, and in the current common use of the equity incentive plan in the enterprise is more accompanied by the enterprise financing listing plan.
During this period, the termination of the labor relationship between the employee and the employer is common.
After the termination of the labor contract, what kind of situation is the employee's stock incentive plan, and whether it can be exchanged in advance (also known as accelerated exercise of power)?
The main disputes and judicial practice on this issue are as follows:
1, the employee leaving and the equity incentive plan clearly agreed upon the handling of the situation when leaving
(1) If it is expressly stipulated in the equity incentive plan or agreement that the employee ’ s rights must be exercised on the premise that there is a labor relationship between the two parties, or the employee ’ s rights should be transferred after leaving the company (or repurchased by the company ’ s designated party), the court will generally support it [6].
This reflects whether equity incentive disputes are characterized as labor disputes and thus respect the typical labor relationship characteristics of employees' subordination to the management of the employer and remuneration through labor, or equity incentive disputes as two equal subjects in general civil and commercial disputes are free agreement on the consideration of equity options.
(2) If it is expressly agreed in the equity incentive plan or agreement, or if the employer clearly tells the employee at the time of termination of the labor contract that the employee's equity option rights shall be exercised within a period of time after the termination of employment, but the worker does not exercise the rights within that period, and the worker requests to exercise the rights after the expiration of the term, the court will generally not support.
However, in practice, there are also courts to further examine the specific reasons for the overdue right of the incentive object, such as the overdue right can not be attributed to the employee, or even the employer is at fault, the incentive object does not naturally lose power, but also specifically consider the rationality of the agreed deadline and the way, whether the incentive object is timely and effectively notified, whether it is obviously beyond the ability of the incentive object to exercise power and other factors.
It also provides a great deal of room for debate.
2, the enterprise illegally rescinded the labor contract, whether the employee can request the option loss compensation
Point one:
If an employee fails to exercise his or her rights in accordance with the provisions of the relevant agreement, the company ’ s actions may be regarded by the court as deliberately obstructing the achievement of the employee ’ s incentive stock realization condition, or as violating the principle of good faith.
Point two:
Equity incentives are produced by adhering to labor relations, and shall enjoy rights and assume obligations in accordance with the provisions of labor laws and regulations and the provisions of labor contracts; the corresponding obligations of employees to obtain and maintain incentive equity are to provide labor to the unit, and employees still hold incentive equity after they request separation and fully fulfill the purpose of labor contracts.
That is, employees should not be entitled to corresponding rights in cases where they do not provide labour or services.
(5) Tax payment of equity incentives
The tax issue of equity incentive is also a common concern of employers and workers in a series of disputes over equity incentive, mainly divided into how to pay corporate income tax for enterprises that implement equity incentive, and how to pay personal income tax when employees obtain equity incentive and subsequent transfer of equity.
Take stock options as an example:
1. Calculation of personal income tax
For employees who receive equity incentives, there are two stages of tax payment.
In the first stage, according to the Ministry of Finance and the State Administration of Taxation, the notice on the collection of personal income tax on income from individual stock options (fiscal tax [2005] No. 35), employees' exercise of power income is due to the performance and performance of employees in the enterprise and income related to employment, and personal income tax shall be calculated according to the applicable provisions on wages and salaries.
In exercising their rights, employees shall pay personal income tax according to the difference between the purchase price (grant price) of the company stock and the stock price (market price) of the company on the date of exercising their rights, and shall pay personal income tax according to the applicable provisions of "salary and salary income".
In the second stage, when the employee retransfers the stock after the exercise of the right, the personal income tax shall be calculated according to the exemption provisions applicable to the "income from the transfer of property", based on the difference between the transfer price and the market price on the date of the exercise of the right.
In practice, for stocks that have not yet been publicly listed, it is not easy to determine a market transaction price that can be accepted by all parties, so the two parties to the equity incentive often dispute the price, and then the amount of personal income tax can not be agreed, which affects the timely exercise of power in accordance with the agreed period.
Calculation of Corporate Income Tax [7]
The company may calculate the relevant cost of the equity incentive on the date of exercise of power, that is, the date on which the employee actually exercises power, according to the following formula: salary and salary expenses = (market price on the date of exercise of power of the company's stock - grant price) × the number of shares actually exercising power, which is deducted before tax in accordance with the provisions of the tax law.
As the withholding agent of personal income tax, the enterprise should reasonably account for the tax and explain the object of the incentive in the exercise of power.
However, it should be made clear that the tax legal relationship is a specific right and obligation relationship between the state, tax collection and management organs and taxpayers in the process of tax collection and management according to the regulations of the tax law. The department is approved.
Even if the preliminary calculation and the tax declaration on behalf of the accuracy of the tax can be more or less reimbursed when the actual tax payment is made, if the parties still have objections to the amount of tax after the tax administration department actually collects the tax, they can also apply to the tax authority through administrative procedures for refund.
If the enterprise has made a reasonable explanation for the calculation amount of personal income tax, the object of the incentive has not determined that the personal income tax calculated by the enterprise exceeds the legal standard through the approval procedure of the tax administrative organ, and if the right is overdue on this ground, it shall constitute a breach of contract and shall be deemed to have lost the equity incentive rights in accordance with the contract.
IV. Legal advice
Modern equity incentive plan is a relatively complex and requires the cooperation of internal (management, human resources, legal departments) and external (legal, accounting and other professional organizations) departments. In the process, the internal personnel responsible for each link in the company are omitted or not connected in time to cause disputes.
In combination with our personal involvement in these types of disputes and case studies, we summarize some common and specific recommendations for dealing with these types of disputes:
(1) Attaching importance to the arrangement of equity incentive plans and related agreements
Although the intention of most enterprises in the formulation of equity incentive plans is to hope that the company and employees of both sides of the income, but still need to face in the future if there is a dispute with employees over the exercise of equity incentive in the future, especially as a company that occupies the absolute initiative in the formulation stage of equity incentive plans, it should pay attention to the formulation, implementation and management of the agreement text, including:
1.
In addition to the provisions on incentive matters at the corporate governance level (such as the articles of association, shareholders' meeting / board resolution), the version of the equity incentive agreement and the fixed power agreement should be signed separately with the object of the incentive, rather than generally stipulated in the labor contract or even in the employee manual.
As far as possible, equity incentive scheme should be distinguished from the nature of labor remuneration as an incentive mechanism for employees to participate voluntarily.
In addition, in the specific implementation of the plan, it is necessary to ensure timely and comprehensive explanation and communication with the incentive object, and obtain written confirmation of the incentive object to participate in the equity incentive plan.
2.
In the equity incentive plan and agreement, pay attention to clearly stipulate the conditions of the incentive object, the conditions of the option grant, the service period, the special agreement of accelerating the exercise of power and the mechanism of withdrawal.
For example, the types of disputes in equity incentive disputes discussed in the text, the status and conditions of employees' exercise of power, and the manner in which the options corresponding to employees should be withdrawn when they leave office are typical of such disputes.
While the arrangements of the agreement may not completely exclude such disputes, the utmost detail and clarity of the agreement is essential in order to obtain the initiative in any subsequent dispute that may arise.
3.
The choice of awarding equity subjects needs to be careful.
For some enterprises that intend to list overseas, such as choosing offshore financing platforms or instruments (such as trusts) as the subject of the option award, it is necessary to pay attention to the legal feasibility of the country where the grant subject is located for the grant of equity incentives with the interests of the main assets in China; and whether the effective legal instruments made by the domestic courts or arbitration institutions on the dispute can be smoothly recognized and enforced in that place.
4.
It is recommended to set up or authorize a special team to be responsible for the implementation process of equity incentive, and do a good job in the whole process of signing, granting, exercising, and repo matters related to the specific object of the incentive in writing and archiving, so that when there is a change of position within the company, the company will not be in a vacuum of the implementation of the previous equity incentive plan.
Conditional, you can also choose qualified third-party institutions as equity incentives to implement the supplier, to ensure the professionalism of the whole process management.
(2) Proposals when a company initiates a party to litigation (arbitration)
In equity incentive disputes, if the company acts as a party to the initiative, most of the company believes that the employee has violated the prior agreement with the company, so as to cancel the labor contract with the employee at the same time that the option / equity has been granted to the employee to be returned, or in the case of the employee who has left the company in violation of the competition restriction obligation.
Where there is a clear agreement on the employee ’ s liability for breach of contract, the service period and the corresponding rights and interests are directly related, it can be directly used as the basis of the claim, and the employee ’ s prior written confirmation of the aforementioned agreement.
If there is no such clear agreement or agreement is unclear, it is easy to argue the reasonableness of the return option / equity in terms of the severity of the employee's breach of contract and the actual losses caused to the company, but it is difficult to find a solution to reduce the company's losses as much as possible.
(3) When the company is a party to the suit
(former) employees as plaintiffs, it is more common to sue the company to require the company to confirm the fact of its exercise of power, confirm the identity of its shareholders, and require the company to pay the distributive profit corresponding to the equity rights that have been exercised.
As a prosecutor, employees can technically adopt more favorable litigation ideas, such as choosing the jurisdiction court that is more inclined to determine that the equity incentive belongs to the labor dispute, and suing in the name of the labor dispute to exclude the jurisdiction of the agreement or the application of the law.
As the respondent, the company first suggests that it should actively respond to the lawsuit, and from the specific circumstances of the prosecution case and the dispute to the receiving court as far as possible, such disputes should be characterized as civil and commercial disputes, so as to strive for flexibility in the jurisdiction of the court and the application of law.
Second, further sorting out and sorting out the terms and conditions that are beneficial to the company in the agreement signed with the prosecution, especially when it involves the application of some foreign laws or the design of special terms, providing support and expert opinions in other similar cases, and demonstrating its reasonableness.
Third, employees may have had multiple rounds of written or oral communication with the company before the lawsuit, and it should be noted that the previous communication can be fixed as evidence for the subsequent dispute resolution process.
The various types of equity incentive disputes mentioned and discussed in the next two articles of this article can only represent the more typical and high-frequency parts of the current practice of such disputes, the complexity of the actual disputes and the negotiation, negotiation and even reconciliation process of enterprises and employees in the process of various considerations, often bring us more thinking, so as to continuously improve the level and implementation quality of the pre-litigation equity incentive plan.
At the same time, the inconsistency of judicial views and levels in various regions in judicial practice is also worthy of the continued attention and participation of legal professionals in this field, contributing more high-quality dispute resolution ideas and programs.
Annotation
[1] Article 529 of the Interpretation of the Civil Procedure Law (2022 Amendment): The parties to a foreign contract or other property rights dispute may, by written agreement, choose the jurisdiction of the foreign court where the defendant resides, the contract is performed, the contract is signed, the plaintiff residences, the location of the subject matter, the place of infringement, and other places of actual contact with the dispute.
According to the provisions of Article 34 and Article 273 of the Civil Procedure Law, in cases that fall under the exclusive jurisdiction of the courts of the People's Republic of China, the parties may not choose the jurisdiction of foreign courts by agreement, except in cases where arbitration is chosen by agreement.
[2] According to articles 34 and 273 of the Code of Civil Procedure, the types of cases under the exclusive jurisdiction of the courts are: real estate disputes, port operations disputes, inheritance disputes.
[3] Article 4 of the Law on the Application of the Law on Foreign-related Civil Relations: Where the law of the People's Republic of China has mandatory provisions on foreign-related civil relations, the mandatory provisions shall apply directly.
[4] Article 8 of the Judicial Interpretation of the Law Applicable to Foreign-related Civil Relations (I): In any of the following circumstances, the provisions of laws and administrative regulations involving the social and public interests of the People's Republic of China, which cannot be excluded by agreement, and which are directly applicable to foreign-related civil relations without the guidance of conflict norms, the people's court shall determine that the provisions of Article 4 of the Law Applicable to Foreign-related Civil Relations Public health security; (3) involving environmental security; (4) involving financial security such as foreign exchange control; (5) involving antitrust and anti-dumping; and (6) other circumstances that should be recognized as mandatory provisions.
[5] The obligation to limit competition of employees is often stated in similar terms: "Except with the written consent of the Company, the incentive shall not be in any way directly or indirectly invested in the same, similar or otherwise competitive business or product of the Company for a period of two years after the termination of employment, in any way directly or indirectly, in the same, similar or constituting any competitive business or product of the Company." holding any position or providing services in an economic organization or in an economic entity or institution referred to above... "
[6] such as (2017) Su 05 Minzhu 5673 judgment, Chen Yufeng and Lucheng Bank signed the employee stock ownership agreement and supplementary agreement are two aspects of the true meaning of the expression, legal and valid.
The agreement stipulates that if Chen Yufeng and Lucheng Bank cancel the labor contract, Chen Yufeng shall transfer the equity held by Chen Yufeng to other employees of Lucheng Bank or by Lucheng Bank to decide whether to buy back, because Chen Yufeng has terminated the labor contract with Lucheng Bank, so Chen Yufeng's shares should be withdrawn.
[7] Announcement of the State Administration of Taxation on the Treatment of Enterprise Income Tax in the Implementation of Equity Incentive Schemes for Resident Enterprises in China (Announcement of the State Administration of Taxation No. 18, 2012)
According to the relevant provisions of China's enterprise accounting standards, when the stock incentive plan is granted to the target, the cost or expense of the relevant year of the listed company is calculated according to the fair price and quantity of the stock, and the value of the service provided by the target in exchange for the incentive.
The treatment of the enterprise income tax of the employee equity incentive plan established by the above-mentioned enterprises shall be carried out in accordance with the following provisions:
(1) Where the right can be exercised immediately after the implementation of the equity incentive plan, the listed company may calculate and determine the wage and salary expenses of the listed company in the current year according to the difference and quantity between the fair price of the stock and the price paid by the object of the incentive at the time of actual exercise of the right, and deduct them before tax in accordance with the provisions of the tax law.
(B) after the implementation of the equity incentive plan, it is necessary to wait for a certain period of service or to meet the specified performance conditions (hereinafter referred to as the waiting period) before exercising rights.
The relevant costs and expenses recognized in the accounting of listed companies during the waiting period shall not be deducted when calculating and paying enterprise income tax in the corresponding year.
After the equity incentive plan is feasible, the listed company can calculate and determine the salary expenses of the listed company in the current year according to the difference and quantity of the fair price at the time of the actual exercise of the right of the stock and the actual exercise of the right to pay the price in the current year, and deduct the tax according to the provisions of the tax law.
(3) The fair price at the time of actual exercise of the right of shares referred to in this Article shall be determined by the closing price of the shares on the actual exercise date.
Where resident enterprises and non-listed companies listed outside China establish employee equity incentive plans in accordance with the provisions of the Administrative Measures, and in the accounting treatment of enterprises, they are also dealt with in accordance with the relevant provisions of China's accounting standards, and their equity incentive plans may be dealt with in accordance with the above provisions.
The content of this article is intended to provide a general guide to the subject matter.
Specialist advice should be sought about your specific circumstances.
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In the 21st century, this term has evolved to describe individuals who resist or oppose new technologies, not necessarily through destructive means, but through reluctance to adopt or embrace technological changes in their work environment.

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## Characteristics of Modern Luddites in the Workplace

### Age and Experience Factors
While not exclusively age-related, resistance to technology often correlates with:
- Employees who have established successful work methods over many years
- Individuals who may not have grown up with rapid technological advancement
- Workers who have witnessed previous technology implementations that failed or caused disruption

### Professional Background
- Long-term employees who have mastered traditional ways of working
- Individuals in roles that were traditionally non-technical but are becoming digitized
- Professionals who value proven methods over experimental approaches