Company alleges former exec breached non-competition clause, among others
Shopee Singapore has failed in its attempt to prevent its former senior executive from joining ByteDance, the parent company of popular social media platform TikTok.
Shopee initiated legal action, claiming that Lim Teck Yong's move to ByteDance violated a non-compete clause in his employment agreement.
Lim, who served Shopee for eight years, held various key positions, including Executive Director of Regional Operations and Head of Operations for Shopee Brazil. After resigning in August 2023, he joined ByteDance in September 2023 as a leader for TikTok shop governance and experience.
Shopee alleged that Lim breached a non-compete clause that prohibited him from working for a competitor within 12 months of leaving the company.
The company sought interim injunctions to prevent Lim from working at ByteDance and from soliciting Shopee's clients and employees.
According to Shopee, there is substantial similarity between Lim's roles at the organisation and ByteDance, including managing user experience, designing policies for seller and listing management, and handling after-sale services.
Lim, however, asserted that his new role primarily involved supporting tasks, such as data analysis and root cause analysis, and emphasised the geographical differences between his roles in Brazil and TikTok Shop's operations.
High Court's decision
Justice Kwek Mean Luck dismissed Shopee's requests, stating that the company failed to demonstrate a "serious question" to be tried, adding that even if there were such questions, he would not have granted the requested injunctions.
Kwek also expressed scepticism about the validity of Shopee's non-competition restriction, citing doubts about a legitimate proprietary interest and questioning the reasonableness of the geographical restraint.
He concluded that Shopee failed to establish serious questions about the validity or breach of the non-competition clause.
"While I am prepared to accept that it is Shopee's case that this is the nature of the confidential information that it seeks to protect, the generality of such information affects the geographical scope of the restraint that Shopee seeks in the Non-Competition Restriction," Kwek said in the ruling.
Concerns about confidential information
Kwek also challenged Shopee's concerns about the misuse of confidential information as the company couldn't point to specific evidence of a breach.
The judge emphasised that Shopee did not demonstrate a risk of breach of non-solicitation restrictions and rejected the springboard injunction request.
"In my view, it could not be said in the circumstances that there is evidence of a risk of Lim misusing confidential information. As analysed above, Lim has already signed the [Employee Confidentiality Agreement]," Kwek said.
He further attributed his move to deny the requested interim injunction to Lim already commencing work at ByteDance.
"Given the serious doubts over the possibility of Shopee's eventual success, in my judgment, it would be in the interests of justice not to disturb that status quo," Kwek said.
