A labor dispute arbitration commission in Beijing has ruled that Chang Cheng, vice president of Xiaomi Group and former Lenovo vice president, should continue to perform his non-competition obligations and pay 5.25 million yuan ($780,000) to Lenovo for breach of his non-competition obligations, according to Sina Tech.
According to the ruling, Chang Cheng will be required to pay Lenovo this penalty within ten days from the effective date of the ruling and return to Lenovo the January 2020 non-competition compensation of RMB 72,955.85 yuan.
Beijing Zhong Lun W&D Law Firm said that it was entrusted by Chang Cheng to file a lawsuit against the ruling and that the judgment was not effective according to law.
Earlier this year, Lenovo Group announced that the head of its mobile phone business, Chang Cheng, had left the company for family reasons. Just two days later, Chang Cheng announced that he was joining Xiaomi Group as a vice president in charge of mobile phone product planning.
Legal experts have pointed out that the move could be an alleged violation of a non-compete agreement that prohibits him from running the same kind of business for a certain period of time after his employment contract is terminated.
At the time, Lenovo Group responded that it had signed a non-compete clause with all of its executives and that it would seek a proper solution to the problem within the legal framework if there was indeed a breach of the agreement.
On September 17 this year, Lenovo Group said that the dispute over Chang Cheng's breach of non-compete obligation had been heard in several hearings at the Beijing Haidian District Labor and Personnel Dispute Arbitration Commission.
Lenovo said at the time that as Chang Cheng did not recognize the authenticity of his signature, the arbitration commission commissioned an appraisal that concluded that the signature was indeed that of Chang Cheng himself. "We are optimistic about the final verdict and believe that the law will give a fair judgment."
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