Notes of the law of Vietnam to develop the non-disclosed agreement (NDA) and non-compete agreement (NCA) between the enterprise and employees

Currently, the non-disclosed information and non-compete agreement to the employees give many enterprises concerns, especially the enterprises specializing in information technology. So, which regulations of Vietnam that the enterprise must consider developing such agreements?

Through this article, BLawyers Vietnam will answer the question above.

non-disclosed agreement

1. The prevailing labor Code and relevant guiding documents:

This code regulates on protecting the trade secret, and technological know-how as follows:

  1. The employer must provide the information when entering the labor contract, including regulations on protecting trade secrets and technological know-how;
  2. The employer must negotiate in writing with the employee on content, the duration for protection of trade secrets and technological know-how, interest, and paying compensation in case of violation;
  3. The protection of assets, trade secret, technological know-how, and intellectual property of the employer shall be regulated in the internal labor regulation and they can be taken the disciplinary measures if disclosing them.
  4. Agreement on trade secrets and technological know-how includes the following main contents:
    1. A list of trade secrets and technical know-how;
    2. Scope of using trade secrets and technical know-how;
    3. Duration of protection of trade secrets and technical know-how;
    4. Methods of protection of trade secrets and technical know-how;
    5. Rights, obligations, liabilities of the employer, employee during the duration of protection of trade secrets and technical know-how;
    6. Actions against breaches of the arrangement for protection of the trade secret and technical know-how.

v.   When detecting an employee who breaches the trade secret and technological know-how, the employer has the right to request that such an employee must compensate under the statutory procedure.

2. The prevailing Civil Code:

This code regulates information protection as follows:

  1. A party that received the information secret from another party during contract execution, shall protect such information and must not use it for personal purposes or other illegal purposes. The breaching party cause any damages shall compensate;
  2. The service provider must keep confidential the known information during working. The party disclosing confidential information must compensate;
  3. NDA can be developed as a civil contract between the parties in accordance with the law.

3. The prevailing intellectual property law:

This law regulates trade secret protection:

  1. Conditions for information to be considered as a protected trade secret, protection procedures, acts of infringement, and measures for dealing with breaches.
  2. The employer or the task assignor shall own the trade secret acquired by an employee or a performer of an assigned task during the performance of the hired or assigned work unless otherwise agreed by the parties.

4. The prevailing competition law:

This law regulates the prohibited unfair competition activities, in which:

  1. Trade secret infringement under the forms as prescribed by the law;
  2. Forcing customers or business partners of other enterprises through threatening or coercion so that they do not enter or stop transactions with such enterprises.

From the above, those are regulations of Vietnam’s law that the enterprises/ employers need to note for the development of the non-disclosed agreement (NDA) and non-compete agreement (NCA) to the employees.

Should you have any questions about the above contents, please revert to BLawyers Vietnam at consult@blawyersvn.com. We are more than happy to hear from you!

Date: 26 June 2022

Writer: Thu Tran

Maybe you want to read:

How can Vietnam-based enterprises prevent the risk of being disclosed trade secrets by employees?

Non-disclosure agreement after termination of labor relationship – Viewpoint from a real dispute case

Talks with Conventus Law about Labor Code 2019

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