SK Hynix lost an injunction case seeking to enjoin a former employee from transferring jobs to Samsung Electronics (2025KaHap21284). SK Hynix did not appeal the decision, and the decision was finalized on January 20, 2026.

For an article on the Korean Supreme Court precedent on the enforceability of Non-Compete Clauses, please see: Non-Compete Clauses in Korea

Facts

  1. Employee (Defendant) joined SK Hynix on February 14, 2013.
  2. The Employee was selected as a Key Personnel Outsourcer around 2022 and served as a part-time manager in the HBM design department before resigning on April 1, 2024.
  3. After resigning from SK Hynix, the Employee worked as a researcher at KAIST’s Graduate School for approximately six months and then worked for Samsung Electronics Research Institute for nearly six months.
  4. On March 27, 2024, around the time of his resignation, Employee signed a two-year non-compete agreement with SK Hynix.
  5. Since April 1, 2025, Exployee has been an executive in charge of chip integration design at Samsung Electronics. The Employee had similar roles at SK as he had at Samsung.

SK Hynix Restrictive Covenant Enforcement Case at the Seoul Central District Court Holding

On January 9, 2026, a Seoul Central District Court dismissed SK Hynix’s application for an injunction enjoining a former employee from working for Samsung Electronics.

The court held that the two-year non-compete period was excessive and thus invalid. The court opined that a key factor in the determination to accept an injunction from a former employer is whether an employee was compensated for the period of non-compete, noting that: “In order to directly restrict workers’ constitutionally guaranteed freedom of occupational choice and labor rights, compensation sufficient to compensate for the damages suffered by the worker is necessary. However, [Employee] did not receive any explicit compensation when entering into the non-compete agreement with SK Hynix.”

It is interesting to note that most experienced practitioners in Korean labor law are well aware of this compensation issue; however, SK Hynix seemed to fail to proactively manage the employee’s resignation and the non-compete by placing into the agreement compensation for the non-compete. Often, these non-competes are offered at the time of a promotion/pay raise, and thus provide a good opportunity to structure part of the salary as compensation for the non-compete.

IPG Legal Law Firm’s Seoul, Korea Office

IPG Legal is a leading law firm in employment and labor law in Korea, particularly in matters involving foreign-invested companies, senior executives, and cross-border employment issues. The firm advises multinational employers and employees on Korean labor law, including unfair dismissal disputes, fixed-term and indefinite-term employment issues, executive separations, workplace investigations, restrictive covenants, and proceedings before the Labor Relations Commissions and Korean courts. IPG Legal is known for its experience navigating complex, precedent-driven labor disputes with a practical street-smart understanding of how labor authorities apply the Korean Labor Standards Act and related statutes in practice. IPG Legal is known for delivering clear, strategic, street-smart, and commercially sound advice in high-stakes employment matters.

by Sean Hayes
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