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Jipyong News|KOREA LEGAL INSIGHT

Court Grants Injunction Against Union Strike — A Landmark Ruling on the Boundaries of Industrial Action in Korea’s Semiconductor Industry

2026.06.02

Introduction
<div> 
On May 18, 2026, the Suwon District Court issued a landmark preliminary injunction in favor of a semiconductor manufacturing company (the “Company”), considerably restricting the scope of a planned 18-day general strike by the Company’s labor unions.  The decision establishes important new standards for the maintenance obligations that unions must observe during industrial action at high-technology manufacturing facilities, and carries significant implications for employers across Korea’s semiconductor and advanced manufacturing sectors.</div>
 
 
1. Case Overview 
 
The Company, one of the world’s largest memory chip manufacturers, faced an unprecedented labor dispute with its two principal unions over performance-based bonuses tied to the company’s record-high earnings from its AI-driven semiconductor business.  The unions demanded that the Company allocate 15 percent of the semiconductor division’s operating profit for performance bonuses and remove existing payout caps, while management maintained that institutionalizing the removal of bonus caps was unacceptable. 
 
After government-mediated negotiations collapsed, the unions announced an 18-day full-scale general strike set to commence on May 21, 2026, with approximately 50,000 workers expected to participate, representing over 40% of the Company’s total domestic workforce.  On April 16, 2026, the Company filed a preliminary injunction request with the Suwon District Court to prohibit what it characterized as illegal strike activities, appointing Jipyong LLC as its counsel. 
 
The core legal issues centered on three provisions of Korea’s Trade Union and Labor Relations Adjustment Act (“TULRAA”): (i) the obligation to maintain “safety protection facilities” during strikes under Article 42, Paragraph 2; (ii) the scope of “maintenance work” to prevent facility damage and deterioration of raw materials or products under Article 38, Paragraph 2; and (iii) the prohibition on facility occupation under Article 42, Paragraph 1. 
 
 
2. Court’s Decision 
 
The 31st Civil Division of the Suwon District Court granted virtually all of the Company’s key requests in a comprehensive ruling issued on May 18, 2026. 
 
Safety Protection Facilities (Article 42(2) TULRAA).  The court ordered that disaster-prevention systems, ventilation facilities, and drainage systems must be maintained and operated during any strike “at the same staffing levels, operating hours, operating scale, and duty of care as on ordinary weekdays, weekends, and holidays.”  Critically, the court interpreted “normal maintenance and operation” under this provision to mean the same level as before the labor action, not merely a minimal skeleton crew.  The court emphasized that “considering the scale [that the Company] holds in the global semiconductor supply chain, disruptions to production from facility damage and deterioration or spoilage of raw materials or products could lead to production delays in the automobile, home appliance, and information and communication industries.” 
 
Maintenance Work / Wafer Preservation (Article 38(2) TULRAA).  The court recognized work to prevent damage to production facilities and wafer deterioration as essential “maintenance work” that must continue during a strike at pre-strike levels.  The Company’s evidentiary submission that a brief power outage of less than 30 minutes at its Pyeongtaek campus in 2018 resulted in losses of approximately KRW 500 billion (approximately USD 333 million) was noted as influential to the court’s analysis. 
 
Enforcement Measures.  The court imposed indirect compulsory fines (ganjeop-gangjegeum) of unprecedented scale: KRW 100 million (approximately USD 66,500) per day for each union and KRW 10 million (approximately USD 7,250) per day for each union leader, payable to the Company for each day of violation.  Over the full 18-day strike period, the total maximum exposure across all claims could reach KRW 9 billion (approximately USD 6.5 million). 
 
 
3. Legal Significance 
 
This decision is noteworthy for several reasons and marks a potential turning point in Korean labor law jurisprudence regarding strikes in technology-intensive industries. 
 
Expansive Interpretation of “Normal” Maintenance Obligations.  The most significant aspect of the ruling is the court’s interpretation that “normal” operation of safety and maintenance systems means the full pre-strike level of staffing and operations, not merely a reduced emergency crew.  This goes considerably further than prior precedent.  By contrast, the Incheon District Court’s ruling in a similar case involving a biopharmaceutical company just weeks earlier (April 23, 2026) adopted a more limited approach, restricting only 3 out of 9 manufacturing processes and distinguishing between “active production activities” and “work to prevent deterioration or spoilage of materials already in process.”  Legal commentators have observed that whereas the biopharmaceutical company case’s standard was confined to “finishing work on nearly completed semi-finished products,” the ruling in the Company’s case imposes a far more comprehensive obligation to maintain safety and maintenance operations across the board at pre-strike levels. 
 
Recognition of Semiconductor-Specific Vulnerabilities.  The court’s reasoning reflects a growing judicial awareness of the unique characteristics of semiconductor manufacturing, where even brief interruptions can cause catastrophic and irreversible damage to production lines, wafers in process, and sensitive equipment.  The ruling effectively acknowledges that the nature of high-technology continuous manufacturing may require broader maintenance obligations during industrial action than traditional industries. 
 
Precedential Value for Employers in Continuous-Process Industries.  While Korean court decisions are not formally binding as precedent, this ruling provides a strong persuasive authority for employers in semiconductor fabrication, petrochemicals, pharmaceuticals, and other continuous-process industries to argue for robust injunctive relief during strikes.  The scale of the enforcement fines also signals judicial willingness to impose meaningful financial consequences for non-compliance. 
 
 
4. Key Takeaways 
 
This judicial milestone offers deeply reassuring insights for multinational corporations, foreign investors, and enterprise clients navigating South Korea’s evolving labor landscape. 
 
<ul>
	<li>Heightened Protection for High-Tech Infrastructure.  The judiciary explicitly recognizes that automated, ultra-precision processes (such as semiconductors and advanced electronics) require strict operational continuity to prevent irreversible commercial damages.</li>
	<li>Clearer Boundaries for Labor Actions.  The ruling draws a sharp line contrasting with prior decisions in other sectors (such as recent biopharma injunctions that only protected basic post-production storage).  It establishes that critical production phases themselves can be protected under strict statutory mandates if the risk of systemic collapse is well-proven.</li>
	<li>Enforceable Injunctions.  The heavy financial penalties attached to individual union leaders and the organizations demonstrate that Korean courts are willing to provide immediate, highly effective remedies to prevent unlawful commercial disruptions.</li>
</ul>

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