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Whether and how non-compete clause enforceable in China

As experienced China corporate lawyer, we frequently encounter the situation where clients inquire about non-compete clause and even independent non-compete contract.

Non-Competition provisions restrict individuals and organizations from providing services or engaging in businesses in certain markets and geographies for a period of time. The enforceability of these clauses varies from State to State. The examples are taken from agreements covering matters broader than just non-competition, such as employment agreements, acquisition agreements or license agreements.

On January 31, 2013, the Supreme People’s Court of the People’s Republic of China, China’s highest court, released Judicial Interpretation on Labor Disputes (IV) (“Interpretation IV”). The Court had published a draft of the Interpretation for public comments in June 2012. However, there are major differences between the final interpretation and the draft, which is intended to balance the interests of the employer and employee.Employers in China are under a statutory obligation to compensate employees for observing non-compete obligations after termination of the employment. Until recently, it was uncertain how much compensation the employer was required to pay. Some local regulations provided for indicative percentages, but most did not.

 

China attorney-client privilege and lawyer professional conduct

I'm not familiar with the ethical rules that may be, but it seems to me a case could be made that the assistant is a part of that attorney's person as necessary for them to function in a professional capacity on par with others without a disability that impacts such functioning within a work context. The assistant is essentially a means of equalization for the attorney, allowing he or she to operate on a more level playing field. Another consideration is that it's likely in the client's best interest the attorney have all they need to perform well, especially at trial. A third thought on this, while nothing related to disability should come down to money, is that an assistant may also be in the attorney's employment, almost as the necessary part of the office that someone else who replied referred to a paralegal as. ic

There is well established case law  and rules that apply attorney-client privilege to legal staff in addition to the lawyer. So a lawyer plus assistants plus legal secretary plus law clerks, plus associate attorneys, plus general staff all come under the privilege which means the assistant does not need to leave every time a lawyer takes a call from a client.

An example is that when China finally clears my service dog and gives me an assistant because of my severe disabilities the assistant will stay with me all the time as with my wonderful dog who won't disclose any secrets.

When my law school professor was teaching law and ethics over 15 years for mental health professionals I had various test items requiring the students to identify if the situation was ethical or not. One example entailed two licensed MFTs consulting on a case in a crowded McDonalds while stuffing their faces with Quarter Pounders, large fries, extra large Coca Cola, dessert, etc.

 

How we China Lawyer organize and Maintain our office

I just spent all night organizing my office in Shenzhen, China. A typical China lawyer's office. Literally.  It's 4 am here and I mine as well not sleep.  I just moved into a really big office that I share with another company.  We took up the back corner of the building and I have about 20 more boxes to go through.

We are pretty much a paperless except for those 20 boxes.  :)  I give everything to my assistant in manila folders with post it note instructions on where to save things or ehat steps to take.  Every staff member has an 8 divider file organizer on their desk.... (not sure what the technical term is)

In the last divider, I give them file labels and blank manila folders. This way they can write on whatever they are working on that is a work in progress.  IE: awaiting documents from client or settlement check from insurance company.  In the first divider they have a phone log as to track all calls and so they can keep a carbon copy of things.

They all have cube post it notes on their desk so they don't lose the post its.  A post it dispenser will also work.
They are only allowed one yellow pad at a time.  I told them to write down every task and cross it off when finished.  I used to go around and clean up after them and their numerous yellow pads which would drive me nuts.

We have everything in storage organizers from Walmart.  The Sterilite kind.  6 small stationary bins the 6 medium roll about plastic bins.  We put all supplies in organizers.  Small storage organizers hold binder clips, paper clips, push pins, and metal fasteners... large storage organizers hold post its, batteries, stamps, canned air, printer cartridges etc.  Each bin is labeled.

On the walls we have white boards and we use art tape as line guides.  All files are notated accordingly with pertinent info IE: Defendant's attorney, court date etc.  Then I can glance over and see the next step.

We also use a program to handle all of our short sales since we do a lot of real estate.  It reminds the staff of the next step etc.  It also helps when one person is out and another person has to handle the files.  This way the person can jump in where the other person left off.

 

Another story about China lawyer professional conduct and ethics

A poor client paid the final amount on a promissory note to the attorney for seller as part of a stock purchase agreement.  The accompanying letter demanded that the funds be maintained in trust (the prom note was paid by wire transfer into the trust account of seller's attorney) and not release to seller until the shares were released. Attorney released funds and did not release stock claiming the final amount was insufficient. In any case you need draft a promissory note in China, make sure consult a China lawyer before you doing so.

The original agreement contemplated an escrow agent holding the shares.  An amendment to the agreement had payments to the seller's attorney in trust FBO the seller but did not specifically name the attorney as escrow agent or state that the payments were being received .

 

One thing I have been asking prospective clients on the phone is "Are you calling to HIRE a lawyer?"

One thing I have been asking prospective clients on the phone is "Are you calling to HIRE a lawyer?"  Most say "yes, I think I need one" or "I hope so" or something. As a China lawyer, you have to ask this before you move on with a client.

Some get stumbly right there and then we have a conversation.  I tell them that is what I do -- I get hired by people to represent them, but information on how to do something without me is best found elsewhere.  I do talk about payment pretty freely -- as much as I can -- since of course that is on people's mind.

But if a prospective client says he wants advice and cannot afford to hire me -- especially those who proudly announce that before even hearing any fees -- then I tell them that sadly, that is not what I do at my work.

 
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I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

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China Lawyer BLog AuthorPeter Zhu, an experienced China attorney licensed to practice law for more than ten years, the author of this China Lawyer blog, welcomes any enquiry or consultation related to Chinese law.