Many companies assume a few lines in the internal regulations — “no disclosing secrets, no joining competitors” — are enough to lock in key staff. In reality confidentiality and non-compete have entirely different lifespans: one thrives inside the employment relationship, the other survives only if a separate, properly drafted agreement carries it.
The confidentiality clause in the regulations: its real reach
Protecting the employer’s assets, business secrets, technological secrets and intellectual property is a core mandatory content of the internal regulations under point d, clause 2, Article 118 of the 2019 Labour Code. On that foundation the regulations may define categories of confidential information (formulae, processes, client lists, cost structures, source code…), the employee’s custody duties and the corresponding sanction levels. Disclosure of secrets causing serious damage is also an Article 125 dismissal ground — the moment the regulations clause shows its greatest strength.
Yet the regulations are the employer’s unilateral document, and their lifespan is tied to the employment relationship: once the contract ends, they are no longer a direct instrument against the departed employee. Confidentiality duties over business and technological secrets can persist after departure under intellectual property and civil regimes, but proof and enforcement become far harder if the company leans on the regulations alone. Key personnel therefore always need a second layer of agreement.
The separate Article 21 confidentiality agreement — the layer to add
Article 21 of the 2019 Labour Code opens the way for that second layer: where an employee’s work relates directly to business or technological secrets, the employer may agree in writing with the employee on the content and duration of secret protection and on compensation for breach. This employment NDA is signed with or after the labour contract and remains effective after employment ends, for the term the parties agreed.
A well-drafted employment NDA needs: a concrete definition of the confidential scope instead of “all company information”; a protection term proportionate to the secret’s commercial life; handover and no-copying duties at departure; and a compensation mechanism — either proven actual damage or a pre-agreed sum. The more specific the agreement, the higher its chance of judicial recognition and enforcement; a vaguely worded one tends to be neutralised at exactly its vaguest point.
Post-employment non-compete: a zone without its own statute
To be direct: Vietnamese labour law currently has no dedicated regime for post-employment non-compete covenants. The Competition Law 23/2018/QH14 prohibits competition-restricting agreements between enterprises; it does not govern an individual employee’s undertaking. In adjudication practice, a non-compete clause inside an Article 21 confidentiality agreement is assessed under civil-law freedom of contract and weighed against the employee’s freedom to work — outcomes vary between cases and an absolute win can never be guaranteed.
The practical strategy therefore ranks by certainty: layer one, protect secrets with a tight NDA — the clearest legal footing; layer two, economic design that makes staying more attractive than leaving (retention bonuses, equity, promotion paths) rather than relying on prohibition alone; layer three, if a non-compete is still used, keep it genuinely narrow — the true direct competitors only, only work connected to the secrets, a short term (commonly referenced at 12–24 months), with financial support during the restricted period to restore proportionality — and accept that a court will decide its effect case by case.
Frequently Asked Questions
Can the regulations carry a confidentiality clause?
Yes — it is part of the mandatory core contents: protecting assets, business secrets, technological secrets and intellectual property is point d, clause 2, Article 118 of the 2019 Labour Code. Define the confidential categories, employee duties and sanction levels; disclosure causing serious damage is an Article 125 dismissal ground.
Can they carry a non-compete?
Labour law has no dedicated post-employment non-compete regime, and the Competition Law 23/2018/QH14 only bans restrictive agreements between enterprises. A non-compete must live in a separate agreement, kept narrow as to competitors, work scope and duration, and its force is assessed by courts case by case — there is no absolute guarantee.
What about compensation?
For business and technological secrets, sign the written agreement contemplated by Article 21 of the 2019 Labour Code on scope, protection duration and compensation for breach — it survives departure for the agreed term. Actual damage may also be claimed under civil and intellectual property law depending on the nature of the information infringed.
How is it enforced?
During employment: discipline under the regulations, up to dismissal where disclosure causes serious damage. After departure: the Article 21 confidentiality agreement plus civil and IP regimes; a pure non-compete carries lower certainty. Combine a tight NDA with retention policies for key staff.
This article has been quality-reviewed by the FLAW AI Legal Council