Exclusive Report: HYBE Forces General Employees to Sign ‘Non-Compete and Non-Suit Agreement’

The problematic clause in the confidentiality agreement is the “non-compete” clause. HYBE imposed the following conditions on numerous departing employees: ▲Employees are prohibited from seeking employment at or cooperating with companies in the same or similar industries for one year after resignation ▲Employees are prohibited from establishing or operating companies in the same or similar industries for one year after resignation.

This means that if someone leaves HYBE, they cannot work at entertainment companies in the same industry or even in similar fields. The signing of these agreements was administered by Kim Joo-young, HYBE’s CHRO (Chief Human Resources Officer), who is the current CEO of ADOR.

In the case of non-compete agreements for rank-and-file employees rather than executives, where there is no particular benefit to the employee, such agreements are practically unenforceable, and critics in the industry point out that they may infringe on individuals’ freedom to choose their occupation.

In addition, HYBE has reportedly obtained “covenant not to sue agreements” from some departing employees. This condition prohibits former employees from filing any lawsuits against HYBE regarding issues that occurred during their tenure.

While there are cases where covenant not to sue agreements are obtained as part of an amicable settlement when an employee is already in litigation or has disputes with the company, HYBE reportedly obtained such signatures even from departing employees who had no particular disputes with the company.

Furthermore, HYBE set the retention period for the confidentiality agreement to “permanent” for departing employees. This also constitutes a violation of the Personal Information Protection Act. According to the Labor Standards Act and the Personal Information Protection Act, documents related to employment, dismissal, and resignation must be retained for three years from the date of the employee’s dismissal or resignation, and must be destroyed within five days thereafter.