International Labor & Employment Law Committee Newsletter

Issue: March 2014

Editor: Ute Krudewagen, Associate Editor: Amie Aldana | Africa and Middle East Editor: Karen Seigel | Asia and Oceania Editor: Jason Noakes | Canada Editor: Gilles Touchette | European Editor: Paul Callaghan | Latin America Editor: Juan Carlos Varela | Law Student Editor: Liam Woods | USA: Trent Sutton


First Ever Pre-Litigation Preliminary Injunction Order Issued in Trade Secret Case

Jonathan Isaacs, Baker & McKenzie, Hong Kong, China

The first ever pre-litigation preliminary injunction in China was issued in early January by the Shanghai No. 1 Intermediate People's Court. The dispute involved a trade secrets case between a Chinese subsidiary of a large multinational pharmaceutical company and its ex-manager.

This is the same court that issued China's first preliminary injunction ever in a trade secrets case in July 2013, though in that case the preliminary injunction was applied after the plaintiff had formally brought a civil claim against the ex-employee.

In the case at hand, the ex-employee downloaded 879 documents containing trade secrets from the company's database after he submitted a resignation letter to the company. He later joined a competitor of the company. The company then filed for a (pre-litigation) preliminary injunction against the ex-employee before the Shanghai No. 1 Intermediate People's Court, seeking to restrain the ex-employee from disclosing, using, or allowing others to use the documents containing trade secrets and related confidential information. The court accepted the petition on the same day and issued a preliminary injunction order within 48 hours thereafter.

The chief judge in this case later commented that the court made the ruling based on five main factors: whether or not the claim was totally frivolous, the potential threat of irreparable damage or injury to the petitioner, a balancing of potential costs/harms of each party, the urgency of the petition, and the public interest. The chief judge, however, did not mention whether the likelihood of success on the merits of the underlying trade secrets case was relevant to the decision.

Under the Amended PRC Civil Procedure Law, the court is required to rule, within 48 hours, on any pre-litigation preliminary injunction petition. By contrast, if a preliminary injunction petition is made during an ongoing litigation, the courts are only required to act where the circumstances are urgent.

This case again demonstrates the willingness of Shanghai courts to grant preliminary injunctive remedies in trade secret cases. However, courts in other cities, such as Beijing, have yet to follow Shanghai's lead.

Increase in Record Retention Obligations for Occupational Health Records

Jonathan Isaacs, Baker & McKenzie, Hong Kong, China

Employer obligations to maintain and retain occupational health records and the number of recognized occupational diseases have been expanded under recent health amendments.

Employer obligations for maintaining and retaining occupational health records were expanded via amendments to the Regulations on Administration of Occupational Health Records ("Health Records Regulations") on December 31, 2013. Employers must maintain: individual employee records on health monitoring and health protection measures, educational and training records related to occupational health information, inspection and surveillance records on workplace health hazards and prevention measures compiled by qualified third-party inspectors, etc. Employers must provide these records to employees upon termination, as well as to government authorities and diagnostic institutes, upon request.

While the Health Records Regulations themselves do not contain any penalty provisions for non-compliance, penalty provisions in the Law on the Prevention of Occupational Diseases and other implementing regulations would likely apply.

In a related development, 18 new occupational diseases were added to the Occupational Disease Classification and Catalogue ("Catalogue"), expanding the total number of occupational diseases to 132. New occupational diseases include AIDS (limited to medical/health professionals and police), explosive deafness, and frostbite. Employees that have been diagnosed with an occupational disease are protected against termination (except for cause).


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