If you ask many employers in Vietnam why they use non-competition agreements (noncompetes), they will confidently tell you that they are trying to protect their legitimate ownership interests. However, what they are less confident about is the legal enforceability of noncompetes. Such uncertainty hurts both employers and employees. The ambiguity regarding the enforceability of noncompetes not only discourages employers from bringing trade secrets into Vietnam but also deprives employees of opportunities for employer investment and personal development. In this article, we argue that noncompetes should be enforceable in Vietnam. However, noncompetes should be binding only if they are necessary to protect an employer’s trade secret(s). This article proposes that the employer must establish this necessity by satisfying the following five-element test. First, the employer has a protectable trade secret. Second, the employee performs work related to such trade secret. Third, the employer sufficiently informs the employee about the noncompete before the employee signs it. Fourth, the noncompete is reasonably limited in scope. Fifth, the employer offers separate consideration to the employee for signing the noncompete.
The Duc Tam, Nguyen and Hong Nhung, Le Nguyen
"Non-Competition Agreements Under Vietnamese Law: Protection of Trade Secrets and Free Choice of Employment as Two Sides of the Same Coin,"
Akron Law Review: Vol. 54:
5, Article 3.
Available at: https://ideaexchange.uakron.edu/akronlawreview/vol54/iss5/3