Do employees have to agree to protect trade secrets in Vietnam?

Do employees have to agree to protect trade secrets in Vietnam?

Pursuant to Article 21 of the 2019 Labor Code, regulations on contents of employment contracts are as follows:

Contents of employment contracts

1. An employment contract shall have the following major contents:

a) The employer’s name, address; full name and position of the person who concludes the contract on the employer’s side;

b) Full name, date of birth, gender, residence, identity card number or passport number of the person who concludes the contract on the employee’s side;

c) The job and workplace;

d) Duration of the employment contract;

dd) Job- or position-based salary, form of salary payment, due date for payment of salary, allowances and other additional payments;

e) Regimes for promotion and pay rise;

g) Working hours, rest periods;

h) Personal protective equipment for the employee;

i) Social insurance, health insurance and unemployment insurance;

k) Basic training and advanced training, occupational skill development.

2. If the employees’ job is directly related to the business secret, technological know-how as prescribed by law, the employer has the rights to sign a written agreement with the employee on the content and duration of the protection of the business secret, technology know-how, and on the benefit and the compensation obligation in case of violation by the employee.

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According to this Article, when an employee works directly related to trade secret and technical know-how according to the provisions of law in Vietnam, the employer has right to agree in writing with the employee on the content, term of protection of trade secrets, protection of technology secrets, rights and compensation in case of violation.

Thus, according to the above regulations in Vietnam, employees must agree to protect trade secrets when directly related to trade secret and technical know-how.

Do employees have to agree to protect business secrets in Vietnam? (Image from the Internet)

What are main contents of an arrangement for protection of the trade secret in Vietnam?

According to the provisions of Article 4 of Circular 10/2020/TT-BLDTBXH regulating protection of trade secret and technical know-how as follows:

Protection of trade secret and technical know-how

1. If an employee performs a job directly related to trade secrets and technical know-how as prescribed by law, the employer may reach an arrangement with the employee for the protection of the trade secret and technical know-how in the employment contract or another document as per the law.

2. An arrangement for protection of the trade secret and technical know-how shall at least contain:

a) A list of trade secrets and technical know-how;

b) Scope of using trade secrets and technical know-how;

c) Duration of protection of trade secrets and technical know-how;

d) Methods of protection of trade secrets and technical know-how;

dd) Rights, obligations, liabilities of the employer, employee during the duration of protection of trade secrets and technical know-how;

e) Actions against breaches of the arrangement for protection of the trade secret and technical know-how.

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Thus, protection of trade secret in Vietnam  includes the following main contents:

- List of trade secrets and technical know-how;

- Scope of using trade secrets and technical know-how;

- Duration of protection of trade secrets and technical know-how;

- Methods of protection of trade secrets and technical know-how;

- Rights, obligations, liabilities of the employer, employee during the duration of protection of trade secrets and technical know-how;

- Actions against breaches of the arrangement for protection of the trade secret and technical know-how.

Currently, what are penalties for employees who violate agreements to protect trade secret and technical know-how in Vietnam ?

Pursuant to Clause 3 and Clause 4, Article 4 of Circular 10/2020/TT-BLDTBXH regulating the handling of employees who violate agreements to protect trade secret or technical know-how as follows:

Protection of trade secret and technical know-how

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3. If the employee is found in breach of the arrangement for protection of the trade secret and technical know-how, the employer may require the employee to make restitution as agreed by the parties. Procedures for restitution:

a) If the employee is found in breach of the arrangement while the duration of employment contract has not expired, procedures for restitution specified in clause 2 Article 130 of the Labor Code shall apply;

b) If the employee is found in breach of the arrangement after the employment contract terminates, actions shall be taken in accordance with civil law and relevant laws.

4. For a trade secret or technical know-how treated as classified information, the law on protection of classified information shall prevail.

In addition, based on Article 125 of the 2019 Labor Code, it stipulates dismissal for disciplinary reasons as follows:

Dismissal for disciplinary reasons

An employer may dismiss an employee for disciplinary reasons in the following circumstances:

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2. The employee discloses technological or business secrets or infringing the intellectual property rights of the employer, or commits acts which are seriously detrimental or posing seriously detrimental threat to the assets or interests of the employer, or commits sexual harassment in the workplace against the internal labor regulations;

Thus, the employer has the right to request compensation when discovering that the employee violated the agreement to protect trade secret or technical know-how. At the same time, disciplinary action of dismissal can be applied to employees who violate agreements to protect trade secret or technical know-how.

In addition, for trade secret or technical know-how on the list of state secrets, it will comply with the provisions of law on protecting state secrets in Vietnam.

Best regards!