Where an employee who has engaged in a specific research and development in the field of advanced technology and entered into an agreement with the company to disclose or not to use trade secrets to a third party without being employed in the competitor for one year after his/her retirement, the case holding that the prohibition agreement is valid on the ground that it cannot be deemed that it unfairly limits an individual’s freedom to choose occupation under the Constitution, and that the duration of the prohibition of competition and the trade secrets obligation is reasonable until one year after his/her retirement.

Where an employee who has engaged in a specific research and development in the field of advanced technology and entered into an agreement with the company to disclose or not use trade secrets to a third party without being employed in the competitor for one year after his/her retirement, the case holding that the prohibition agreement is valid on the ground that it cannot be deemed that it unfairly limits an individual’s freedom to choose occupation under the Constitution, and that the duration of the prohibition of competition and the trade secrets obligation is reasonable until one year after his/her retirement.

[1] Article 714(2) of the Civil Procedure Act Article 15 of the Constitution

Samsung Electronic Co., Ltd. (Law Firm Squa, Attorneys Seo Jong-woo et al., Counsel for the defendant-appellant)

Debtor 1 and three others (Attorney Park Hun-sik, Counsel for the defendant-appellant)

1.Subject to the deposit of KRW 24,00,000 on behalf of the debtor 1 with guarantee within seven (7) days after the date on which the creditor has received notice of this decision, KRW 12,00,000 on behalf of the debtor 2, KRW 27,000 on behalf of the debtor 3,000 on behalf of the debtor 4, and KRW 27,000 on behalf of the debtor 4,000 on each of the above amounts, or submission of the documents concluding the contract for entrustment of payment guarantee with the amount as the insured amount;

A. (1) The debtor 1 is up to February 17, 2001

(2) No later than October 11, 2000, the debtor 2

(3) The debtor 3 up to March 8, 2001

(4) The debtor 4 up to March 8, 2001

No person shall be employed by KONEX Co., Ltd. other than each application.

(b)(1) The debtor 1 shall not later than February 17, 2001 trade secrets listed in Section 1 of the Schedule.

(2) The debtor 2 shall not later than October 11, 200, trade secrets listed in paragraph (2) of the attached Table No. 2.

(3) Before March 8, 2001, the debtor 3 is a trade secret listed in paragraph (3) of the attached Table No. 3.

(4) Before March 8, 2001, the debtor 4

No person other than each creditor shall make public or use it.

2. The remaining claims against the creditors are dismissed, respectively.

The debtor 1 shall not be employed by the debtor until February 17, 2003; the debtor 2 until October 11, 2002; the debtor 3 until March 8, 2003; and the debtor 4 until March 8, 2003. The debtor 1 shall not be employed by KONEX Co., Ltd. other than each application until March 8, 2003. The debtor 1 shall not be a trade secret listed in the attached Table 1; the debtor 2 shall not be a trade secret listed in the attached Table 2; the debtor 3 shall not be a trade secret listed in the attached Table 3; the debtor 4 shall not disclose or use the trade secret listed in the attached Table 4 to any person other than each creditor.

1. An occurrence of a duty to prohibit competition and a duty to observe trade secrets;

According to the records of this case, the debtor 1 was employed by the creditor company engaged in the manufacturing and selling business of electronic machinery, telecommunications machinery, and parts thereof, and worked as researchers for the development of radio terminals at the radio development team of the company, for less than one month, more than six months, more than six months, on February 18, 200, on-the-job training, on-the-job training, and on-job training, and on-the-job training, etc., on October 12, 1999. The debtor 2 was on March 12, 199. The debtor 3 retired on March 9, 200. The debtor 4 retired from the company on March 9, 200. The debtor is acknowledged to the effect that at the time of retirement, the debtor will not be employed by the creditor company and the company under competition with the creditor company for one year after his retirement, and that the debtor will not directly use the trade secrets listed in the attached list to the third party or will not use them directly (hereinafter referred to as the "in this case").

According to the above facts, unless there are special circumstances, debtors have to not employed in KON Co., Ltd. other than the creditor company and the creditor company's trade secrets stated in the creditor company's attached list should not be disclosed to persons other than creditors or used directly.

2. The assertion and determination on the validity of the agreement prohibiting competition

The debtor asserts that the agreement on the prohibition of competition in this case is null and void because it infringes on an individual's freedom to choose an occupation guaranteed by the Constitution. Thus, the purpose of the agreement on the prohibition of competition in this case is to prevent the act of causing damage to the creditor company by working in the same type of business or employed in another competitor company after retirement through information on the manufacturing method, etc. of radio terminal which the debtor became aware of during the period of employment, i.e., the act of causing damage to the creditor company. In order to promote research and development of the company and maintain sound competition order among the companies, it is recognized that the research and development outcomes paid by investing a large number of time and expenses are necessary to protect the company from being leaked to other competitors without permission through the process of the individual's transfer. In light of the fact that the prohibition period stipulated in the agreement on the prohibition of competition in this case is a relatively short period of time and is limited to one year, and even within the scope of such restriction, it is not considered that there is an excessive restriction on the debtor's freedom to choose an occupation guaranteed by the Constitution.

In other words, the debtor asserts that the agreement on the prohibition of competitive business of this case was made by the creditor company's coercion and is null and void, so there is no evidence to acknowledge that the creditor company forced the debtor to enter into the agreement on the prohibition of competitive business of this case. Thus, the debtor's assertion is without merit.

3. Obligations to prohibit competition and the duration of obligations to keep trade secrets;

Furthermore, with respect to the obligor's duty not to engage in competitive business and the duration of the obligor's obligation to observe trade secrets, the time limit protected by the Unfair Competition Prevention Act, etc. should be limited within the time limit necessary to ensure fair and free competition by preventing the infringer from taking advantage of more favorable points than fair competitors, i.e., saving time., from taking advantage of the infringement. At the time of the conclusion of the agreement on the prohibition of competitive business, the obligee company limited the period of prohibition of competitive business to one year by considering the fact that the speed of technology development in the radio terminal field is very rapid. Even if the obligee company acquires technical information on the manufacturing method of the radio terminal owned by the obligee company by legitimate methods such as independent development, technical cooperation with the advanced company, reverse design, etc., in light of current speed, it seems that the period of prohibition of competitive business is much more time than the above period of prohibition of competitive business, and if the duration of the agreement is excessively expanded between the company and the employee, the possibility of excessive restriction on the freedom of employment and the possibility of unfair competition after the expiration of the agreement will result in unfairly.

4. Conclusion

Therefore, the application for provisional disposition of this case is proved to be the preserved right that the creditor has the right to claim the prohibition of competition and the right to claim the prohibition of infringement of trade secrets for one year after retirement of each of the parties under the agreement on the prohibition of competition of this case against the debtor, and the debtor is likely to suffer significant damage to the creditor company by being employed by the competitive enterprise related to the creditor company's trade secrets. Thus, the application of this case against the creditor's debtor is accepted within the scope of the above explanation, and each of the remaining parts is dismissed as it is so decided as per Disposition.

Judges Lee Sung-ho (Presiding Justice) (Presiding Justice)