XPeng Enhances Trade Secret Management After Suing Former Employee
XPeng Inc. has updated its internal trade secret compliance system. The move follows a legal action where the company demanded nearly 10 million yuan from a former employee for breaching non-compete obligations.
Chinese electric vehicle manufacturer XPeng Inc. has bolstered its trade secret management protocols by issuing an updated internal compliance system to employees on August 7. This revision comes after the company initiated legal action, seeking approximately 10 million yuan (about $1.3 million USD) from a former employee for alleged violations of non-compete agreements.
The newly implemented "Trade Secret Compliance Management System" introduces comprehensive measures across multiple dimensions, with a particular focus on managing sensitive information throughout an employee's tenure. Before onboarding, XPeng reserves the right to investigate an applicant's past employment, intellectual property disputes, and existing non-compete agreements. Candidates with backgrounds at competing firms may be required to provide documentation of their former employer's confidentiality and non-compete policies and sign a commitment to non-infringement.
Upon an employee's departure, the company mandates a confidentiality discussion, the return of all proprietary materials, and the revocation of system access. For personnel in sensitive roles, XPeng may monitor for unusual login activity, bulk data downloads, deletions, or external transfers. Non-compete clauses may be enforced, and the employee's subsequent employment during the restriction period can be tracked.
In cases of suspected information leakage, a multi-departmental investigation team will gather evidence from sources including emails, chat logs, file transfer records, system logs, and physical access data. Potential consequences range from internal disciplinary actions to labor arbitration, administrative complaints, civil litigation, or criminal reporting.
In June, XPeng filed a labor arbitration case against a former employee for breaching a one-year non-compete clause. Reports indicate that XPeng had fulfilled its monthly compensation payments, but the employee joined a rival company and engaged in similar research and development activities shortly after leaving. XPeng is seeking the employee's continued adherence to contractual obligations, repayment of compensation and restricted stock sale proceeds, and penalties for breach of contract, totaling close to 10 million yuan.