Seoul Central District Court Restricts Job Transfer of Ex-Employee in OLED Display Industry
The Seoul Central District Court has ruled that it is justified to restrict the transfer of a worker who is suspected of having been employed by a foreign competitor after working for a significant period in the organic light emitting diode (OLED) display process. In response to Samsung Display’s request for a temporary injunction against ex-employee A, the court has partially referred the case to the Civil Settlement Division.
The court’s decision states that Mr. A is prohibited from working for a competitor for two years after retirement or participating in OLED display research and development through indirect employment. Mr. A had been with Samsung Display for 10 years, serving as the head of the ELA process development group, a crucial aspect of OLED processes, before leaving the company in January of last year. Prior to his departure, Mr. A signed a ‘promise to protect trade secrets’ and received a deposit of 80 million won in return. This pledge included a ban on starting a company or changing jobs to a competing company for a period of two years, in cases where trade secrets are at risk of being leaked.
However, just seven months after leaving Samsung Display, Mr. A began working at Company B, a manufacturer of medical laser treatment devices based in Huizhou, Guangdong Province, China. Samsung Display took issue with this and filed a preliminary injunction to prohibit job changes last March, arguing that Company B was indeed a competing company. Mr. A and Company B defended themselves by claiming that they had not breached the contract since Company B was not a direct competitor where job changes were prohibited.
In favor of Samsung Display, the court stated, “The need for a temporary injunction to prevent job changes is only recognized when it is clear that one has been employed in a competing firm where such transfer is prohibited. Even in case of doubt, retention is not permitted.” Therefore, the court ruled that the ban on job changes should be upheld.
It is worth noting that after leaving Samsung Display, Mr. A found employment with a small company consisting of only seven employees. Moreover, the products sold by Company B have no relation to Mr. A’s previous career or the work he had previously handled. The court highlighted these circumstances and questioned whether Mr. A was genuinely employed by the company.
Additionally, the court concluded that the two-year ban period specified in Mr. A’s pledge was not excessive. Considering his tenure and the nature of his work, Mr. A had access to core information related to the ELA process. If this information were to be obtained by a competitor through Mr. A, it could potentially create an unfair advantage, such as saving time in bridging the technological gap.
The court’s ruling serves as a significant development in protecting trade secrets and preventing the unauthorized transfer of valuable knowledge within the OLED display industry.
A panoramic view of the Seoul Central District Court in Seocho-gu, Seoul. Kyunghyang Shinmun file photo
The court ruled that it was justified to restrict the transfer of a worker suspected of having been employed by a foreign competitor after working for a long time in the organic light emitting diode (OLED) display process.
According to the legal community on the 3rd, the Civil Settlement Division of Seoul Central District Court 50 (President Judge Park Beom-seok) partially referred Samsung Display’s request for a temporary injunction against ex-employee A. The court decided, “I must Mr A must not work for a competitor for two years after retirement or participate in OLED display research and development through indirect employment.”
Mr A joined Samsung Display in September 2008 and served as the head of the ELA process development group, one of the core OLED processes, from 2012, working for 10 years before leaving the company in January last year. Before leaving the company, Mr A wrote a ‘promise to protect trade secrets’ and received a deposit of 80 million won in return. The pledge included a ban on starting a company or changing job to a competing company for two years from the date of retirement where trade secrets etc. have been leaked or are likely to be leaked.
However, 7 months after leaving the company, Mr. A started working at Company B, a manufacturer of medical laser treatment devices located in Huizhou, Guangdong Province, China. Samsung Display took issue with this and filed a preliminary injunction to prohibit job changes with the court last March. It was assumed that the company where Mr. A actually works at Company B, but a competing company in China. In response, Mr. And that Company B had not breached the contract because it was not a competing company where job changes were prohibited.
The court ruled in favor of Samsung Display. The court said, “The need for a temporary injunction to stay a change of job is recognized only when it is clearly shown that one has been employed in a competing firm where transfer of job is prohibited,” and added, “Even if there are circumstances that raise doubt. of employment in a competing company, retention is not permitted.” “The need is recognized,” he said.
At the same time, Mr A quit Samsung Display and got a job in a small company with only 7 employees, and it seems that the products sold by Company B are completely unrelated to Mr A’s career or the work he has handled so far. He pointed out that it was doubtful whether he was actually employed by the company.
The court also said that the two-year ban period set in the pledge was not excessive. Considering his period of employment and status, Mr. A can handle the core information of the ELA process, so if a competitor gets the information gathered by Mr A, he would have an unfair advantage, such as saving time in reducing the technological gap. I thought there was a risk of do that.
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