Foxconn asked employees to sign a confidentiality agreement. Our reporter Gao Guibin photo
Transfer from your post without signing a confidentiality agreement
On the evening of April 10th, Foxconn International Holdings Co., Ltd. announced the latest development of the "Fubi case". Two employees who had switched jobs from Foxconn to BYD were convicted by the Baoan District People’s Court of Shenzhen for infringing the business secrets of Foxconn Group, and were sentenced to four years and one year and four months respectively.
The case of suing BYD for stealing trade secrets for two years made Foxconn learn from a bitter experience and decided to make a "vicious move". A few days ago, it was reported that Foxconn required its relevant employees to sign an intellectual property confidentiality agreement, stipulating that those who violated the relevant provisions must pay a penalty of 600,000 yuan to the company in advance (excluding other compensation fees).
In this regard, Foxconn employees have different views. Those who don’t want to jump ship don’t care, while those who want to jump ship with business secrets are greatly disturbed. Lawyers pointed out that the general terms of Foxconn’s confidentiality agreement are in line with the law, but the specific operating procedures and detailed rules need to be improved and should be fully negotiated with employees. For example, if the company’s practice of transferring people who do not sign the agreement in operation is true, it is suspected of breaking the law.
Employee: The initiative is entirely in the hands of the company.
According to employees of Foxconn Shenzhen Futaihong Precision Industry Co., Ltd., in mid-March, the company issued an Intellectual Property and Confidentiality Agreement, which required employees above a certain level to sign. The strict restrictions in this confidentiality agreement on employees looking for jobs after resignation have caused a lot of controversy. A copy of the agreement shows that employees shall not directly or indirectly engage in any competitive behavior related to the company’s business or its business in the country and region where Foxconn is located within two years from the date of resignation.
"The scope of restrictions is too wide." An employee of Foxconn believes that the relevant details in the agreement are not clear. For example, the calculation method of economic compensation for restricted employees is completely in the hands of the company. Some employees think that the liquidated damages in the agreement are too high. According to the insider’s analysis, the confidentiality agreement seriously restricts the mobility of employees who want to change jobs and seek better development. At the same time, some senior employees feel uncomfortable being included in the strict control of the company.
Since the agreement was issued in mid-March, some employees have not signed it. An employee revealed that at the beginning of April, the department head of the company began to look for employees who didn’t sign the confidentiality agreement, saying that if they didn’t sign it, their personal bonus would be greatly reduced and their annual salary increase would be affected. However, this statement was denied by Foxconn.
Foxconn: the confidentiality agreement is legal and compliant
Yesterday afternoon, Foxconn said in an interview reply letter to reporters that the terms of the confidentiality agreement were in compliance with relevant laws and the process of formulating the agreement was in compliance with relevant regulations. Foxconn said that the agreement extensively listened to the opinions of the All-China Federation of Trade Unions, the National People’s Congress Law Committee and other relevant departments, and collected the opinions of labor law experts. It took three months to finalize the agreement after several consultations within Foxconn.
In addition, Foxconn pointed out that the agreement is only for important cadres of the group. If the parties are unwilling to sign it, it will not be linked to the salary increase and bonus, and they will not dismiss the employees. However, based on the confidentiality requirements of some jobs of the group, they will consider adjusting the positions that are unwilling to sign employees. For Foxconn’s statement, some employees said that it had not been fully negotiated by both parties before, and it was a overlord clause.
Lawyer: The operation details are suspected of breaking the law.
Wang Jian, a lawyer of Guangdong Chenggong Law Firm, believes that Foxconn’s practices and confidentiality agreements are generally in line with the relevant provisions of the law, but the operational details are suspected of being illegal.
Wang Jian said that the confidentiality agreement has relevant provisions in the old and new labor laws, but the agreement has no clear provisions on the restricted area and the amount of compensation and liquidated damages, and only requires both parties to decide through consultation. For example, it is suspected to be illegal for employees to leave their posts without signing. If Foxconn adjusts its employees’ positions because they don’t sign confidentiality agreements, it will force employees to sign them. The post was agreed by the previous labor contract between the two parties. If the employee refuses to accept it, he can appeal for rights protection.
■ Background link
Foxconn sued BYD for infringement of trade secrets
Foxconn sued BYD for infringing trade secrets, which is called "the first case of high-tech intellectual property rights in China". In June 2006, Foxconn filed a lawsuit against BYD in Shenzhen, accusing it of stealing trade secrets and claiming 5 million yuan. On June 11th, 2007 and October, 2007, Foxconn sued BYD in Hong Kong.
According to Foxconn’s latest progress bulletin on April 10th this year, two former employees of Shenzhen Futaihong Precision Industry Co., Ltd., a wholly-owned subsidiary of Foxconn, left their jobs and moved to BYD. Subsequently, Liu Xiangjun became the head of BYD’s IT industry group and the manager of overseas business department, and Si Shaoqing was the head of BYD’s system management office. Later, Liu Xiangjun obtained several documents from Foxconn through his former colleagues at Foxconn, while Si Shaoqing brought out several documents from the company during his work at Foxconn for the compilation of similar documents from BYD.
After the relevant departments intervened in the investigation, Liu and Si were respectively charged by the prosecution with the crime of infringing Foxconn’s trade secrets. On March 31 this year, Liu Xiangjun was sentenced to four years in prison by the Baoan District People’s Court. On March 24th, Si Shaoqing was sentenced to one year and four months’ imprisonment by Longgang District Court.
Our reporter Zhou Changhe
Editor: Wang Xu