According to reports, HYBE, recently honored as a “Top Job Creation Company” in South Korea, has continued to require departing employees — not only from ADOR, where recent resignations occurred, but also from other labels — to sign confidentiality agreements that include sweeping non-compete provisions.
These clauses reportedly state that former employees:
- May not work for or collaborate with similar or related companies for one year after resignation.
- Are prohibited from founding or operating any similar or related businesses during that period.
The agreements were reportedly overseen by ADOR CEO Kim Jooyoung, who also serves as HYBE’s Chief Human Resources Officer (CHRO).
Legal Experts Question Validity
While non-compete clauses are common in high-security industries like semiconductors, their application in the entertainment sector — particularly toward non-executive employees — has been met with strong criticism.
An anonymous labor attorney stated: “Such agreements have no legal effect unless certain strict conditions are met. They may even violate the constitutional right to career choice.”
Lawyer No Jong-eon from law firm Jonjae emphasized that: “The Supreme Court has ruled that non-compete clauses must reasonably balance the rights of workers. Overbroad restrictions, even if consented to, are likely to be invalid.” He added that HYBE’s clause is too vague and wide-reaching, potentially infringing on the basic rights of its former employees.
Alleged Use of “Non-Litigation Agreements” and Data Retention Violations
In addition to the non-compete clause, HYBE has allegedly required some departing employees to sign non-litigation agreements, which bar them from filing lawsuits over any issues that occurred during their tenure — even in the absence of existing disputes.
Furthermore, HYBE reportedly set the document retention period as “permanent”, which may violate South Korea’s Personal Information Protection Act. Under the law, employment records must be discarded within five days after a three-year mandatory storage period unless the employee consents otherwise.
Industry Reaction and Company’s Response
A senior HR officer from a global firm noted: “It’s standard to include NDAs and non-competes at the time of hiring, especially with proper compensation. But requiring such agreements post-resignation without disputes is highly unusual.”
Critics also pointed out the irony in HYBE’s position: “HYBE grew by recruiting talent from rival agencies — how can they now restrict others from doing the same?”
In response, HYBE issued a statement, saying: “Our offboarding documents are reviewed for legal compliance. The non-compete clause aims to prevent the leakage of trade secrets within an industry driven by creative content.”
The company also clarified that: “The non-litigation clause pertains to recognizing the company’s ownership of work created during employment. Document retention terms refer to the storage period, not the legal effect of those documents.”
As the case garners public attention, it could set a precedent for how entertainment companies structure contracts with creative professionals — especially when it comes to post-employment freedom.
Naver
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