The employer and the employee may agree in the labor contract to keep the employer's business secrets and confidential matters related to intellectual property rights. For the workers who have the obligation of confidentiality, the employer may stipulate the non-competition clause with the workers in the labor contract or confidentiality agreement, and stipulate that after the labor contract is dissolved or terminated, the economic compensation will be paid to the workers on a monthly basis during the non-competition period.

A labor contract shall have the following clauses:

1. Name, domicile and legal representative or principal responsible person of the employing unit;

2. The name and address of the laborer and the number of the resident identity card or other valid identity documents;

3. Term of the labor contract;

4. Work content and work place;

5. Working hours and rest and vacation;

6. Labor remuneration;

7. Social insurance;

8. Labor protection, working conditions and protection against occupational hazards;

9. Other matters that should be included in the labor contract as stipulated by laws and regulations.

To sum up, confidentiality agreement is one of the most common and powerful ways to protect trade secrets. Those who violate the confidentiality agreement will be held accountable, and divulging business secrets may even constitute a crime.

Legal basis:

Article 23 of People's Republic of China (PRC) Labor Contract Law

Obligation of confidentiality and restriction of non-competition, the employer and the employee may agree in the labor contract to keep the employer's business secrets and confidential matters related to intellectual property rights.

For the workers who have the obligation of confidentiality, the employer may stipulate the non-competition clause with the workers in the labor contract or confidentiality agreement, and stipulate that after the labor contract is dissolved or terminated, the economic compensation will be paid to the workers on a monthly basis during the non-competition period. If the laborer violates the non-competition agreement, he shall pay liquidated damages to the employer in accordance with the agreement.

Article 24

Scope and duration of non-competition restrictions The personnel who are restricted from non-competition are limited to the senior managers, senior technicians and other personnel with confidentiality obligations of the employing unit. The scope, area and time limit of non-competition shall be agreed by the employer and the employee, and the agreement on non-competition shall not violate the provisions of laws and regulations.

After the dissolution or termination of the labor contract, if the personnel specified in the preceding paragraph go to other employers that have a competitive relationship with their own units to produce or operate similar products or engage in similar businesses, or start their own businesses to produce or operate similar products or engage in similar businesses, the non-competition period shall not exceed two years.