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International Journal of Frontiers in Sociology, 2025, 7(1); doi: 10.25236/IJFS.2025.070106.

A Study of the Normalization of Discretionary Reductions in Severance Non-compete Liquidated Damages

Author(s)

Yulin Wang

Corresponding Author:
Yulin Wang
Affiliation(s)

School of Law, China Jiliang University, Hangzhou, China

Abstract

Focuses on the legal attributes of non-competition liquidated damages, this paper points out the current controversy in the academic community over the nature of compensatory and punitive liquidated damages, and puts forward the necessity of standardizing the discretionary reduction of liquidated damages. Analyzing the legal framework and judicial practice, it points out the current situation of the Court's discretionary reduction of liquidated damages and the premise of applying the discretionary reduction rule. In order to achieve a fairer and more reasonable adjustment of the liquidated damages for non-competition, it is proposed that special discretionary rules should be constructed, guided by the principles of fairness, honesty, and good faith and that judges should take into account the employer's actual losses, the worker's economic situation and the degree of fault in his/her duties when dealing with this kind of cases, to promote a balance of the interests of both the employer and the employee.

Keywords

Separation from employment, Non-compete liquidated damages, Judicial discretion, Compensatory liquidated damages, Punitive liquidated damages

Cite This Paper

Yulin Wang. A Study of the Normalization of Discretionary Reductions in Severance Non-compete Liquidated Damages. International Journal of Frontiers in Sociology (2025), Vol. 7, Issue 1: 35-40. https://doi.org/10.25236/IJFS.2025.070106.

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