"Fired Because of Her Husband" Woman Dismissed After 17 Years Wins Compensation Order from Court

Company Cited "Concerns Over Internal Confidentiality"
Court: "No Evidence of Actual Harm"... Orders Compensation

A real estate management company in Shanghai, China, was ordered by a court to pay approximately 690,000 yuan (about 150 million won) in compensation after firing a female employee because her husband worked for a rival company.

On May 7, Hong Kong media outlet South China Morning Post (SCMP) and Chinese media outlet Yangtze Evening Post reported that the Xuhui District People's Court in Shanghai recently ruled that "an employee cannot be dismissed solely because their spouse works in the same industry," judging the company's unilateral termination of the contract to be unlawful.

Ms. Liu, who had worked at the real estate management company in Shanghai since 2006, was suddenly notified by the company at the end of 2023 that her labor contract was being terminated. The reason given was that her spouse was working as a general manager at a rival company, which was said to negatively impact the company.

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The company pointed out that Ms. Liu, who worked as an operations manager, had access to various data and internal confidential information, and that her husband, Mr. Li, was involved in activities related to the rival company. In fact, Mr. Li was associated with a competing company established under his mother's name and reportedly attended industry exhibitions as the general manager of the competitor.

However, Ms. Liu countered that she was not in a position to handle the company's core confidential information and had only been assigned to supporting tasks. She also argued that her husband was not actually an employee of the competitor, and that he had only been introduced as a representative of the company at industry events for convenience.

As a result, in February last year, Ms. Liu applied for labor arbitration, seeking wage compensation of 680,000 yuan (about 146 million won), a performance bonus of 60,000 yuan (about 12.9 million won), and unused annual leave allowance of 10,000 yuan (about 2.14 million won). The Labor Arbitration Committee subsequently ruled that the company must pay 680,000 yuan in wage compensation and 10,000 yuan in unused annual leave allowance.

The company challenged the decision by filing a lawsuit in court, but the court found that the company failed to prove that Mr. Li used Ms. Liu's position to harm the company's interests. The panel stated, "It is very common for spouses to work at different companies within the same industry," and noted that, under China's Labor Contract Law, non-compete clauses only apply to senior managers, highly skilled professionals, or employees with confidentiality obligations. The court concluded that, since Ms. Liu was not an executive-level employee and had not signed a separate non-compete agreement, the company must compensate her approximately 690,000 yuan.

This content was produced with the assistance of AI translation services.