As competition for talent intensifies across Korea’s key industries, employers increasingly rely on non-compete agreements to protect confidential information and commercially sensitive know-how.  However, a signed non-compete does not automatically guarantee enforcement.  Korean courts have held that post-employment restrictions may be invalid if they excessively limit an employee's constitutional freedom to choose an occupation.  The Supreme Court identified six factors for assessing enforceability: (i) the employer's legitimate business interests worthy of protection, (ii) the employee's position prior to departure, (iii) the duration, geographic scope, and scope of restricted activities, (iv) whether compensation was provided for the restriction, (v) circumstances surrounding the employee's departure, and (vi) other relevant considerations (Supreme Court Decision 2009Da82244, March 11, 2010).

Among these six factors, the most fiercely contested in recent practice is factor (iv) – whether adequate compensation was provided.  Employers often argue that high salaries already constitute sufficient consideration, while employees counter that such payments were merely compensation for services rendered.  Recent lower-court decisions suggest that courts are applying increasingly rigorous standards in scrutinizing whether employees received adequate compensation specifically linked to the non-compete obligation rather than relying on broad contractual language or general compensation packages.