How to prevent former employee from working with competitor in Vietnam?

In many developed countries, employers use written employment agreements (called non-competition clauses) to restraint on working for competitor. Sometimes these agreements are enforceable and sometimes they are not. In the United States, non-competition clauses may be not enforceable in certain jurisdictions, absent narrow exceptions. For example, non-competition agreements are highly disfavored in California. Most jurisdictions would uphold a non-competition clause if it is reasonable in scope and duration and does not unreasonably prevent the employee from their right to earn a living.

So how to restrict employees from using confidential information against the company or from providing such information to a competitor in Vietnam?

Article 10 of Labor Code 2013 provides that employees have right to work for any employer in anywhere that are not prohibited by Vietnam Laws. So even for those who have signed written agreements (non-competition clauses), which is unenforceable because of being violated a principle of “the right to work/choose jobs and professions” as provided in the Constitution and the Labor Code.

However, Intellectual Property Law of Vietnam has its own restrictions on the use of trade secrets. It is likely unlawful for that employee to provide such information to a competitor without the consent of trade secret’s owner. If the employee reveals such information that was obtained within the course of employment, then the employer may sue the employee for any damages.

If the competitor hired the employee for the purpose of unlawfully obtaining the trade secret or had reason to know that the confidential information was not the sole property of the employee. The employer may also be able to sue both the employee and the competitor for the act of trade secret infringement.

Pham & Associates