Shopee tried to sue an ex-employee of eight years when he quit to join ByteDance, which owns TikTok and a related e-commerce platform.

Changed job

Lim Teck Yong joined Shopee Singapore in August 2015 as its head of regional operations, HQ.

He signed a Restrictive Covenants Agreement (RCA) with a non-solicitation and non-competition clause, as well as an Employee Confidentiality Agreement (ECA).

Lim left his last role in the company — executive director, head of operations for Shopee Brazil — in August 2023, joining ByteDance in September 2023 as "leader for TikTok Shop governance and experience, middle platform".

After securing this new job, Lim got a lawyer's letter from his former employer.

It alleged that he'd breached a non-competition clause in his employment contract, reported CNA.

The clause forbade Lim to seek employment with any competitor within 12 months of leaving Shopee.

While arguing for its case, Shopee's lawyers brought up various areas of dispute.

1) Similarities between old and new roles

Lim's new post required him to manage user experience, design policies for seller and listing management, and manage after-sale services such as returns and refunds.

Shopee's counsel argued that this new role was "substantially similar" to the ones he had in Shopee, said CNA.

Apart from his first and final roles in Shopee, Lim had also been the head of its regional people team, senior director of regional operations, and executive director of regional operations.

Lim countered that his current job was in a team that played a primarily supporting role, such as assisting with data analysis and root cause analysis to enhance operational metrics.

Based on his reading of the RCA, the judge considered only the 12 months before Lim bade farewell to Shopee.

During this time, Lim held only the position of executive director, head of operations for Shopee Brazil.

This role operated in Brazil, as opposed to TikTok Shop which operates in the U.S., UK, and parts of Southeast Asia.

2) Knowledge of confidential information

Shopee was unable to present any specific confidential information Lim had access to, according to CNA.

The company's lawyers said the concern was "more with the general know-how" that Lim had been privy to, such as when he attended meetings that discussed Shopee's strategies and priorities for all markets.

But the judge once again disagreed.

The judge said this would mean Lim would need to be excluded from being employed in all the markets where Shopee was operating, even though he had not worked there, had no responsibilities for, and had no specific information about in the 12 months before terminating his employment with Shopee.

3) Solicitation of customers

While not having any specific evidence of Lim breaching the non-solicitation clause, Shopee argued that there was a risk of this happening.

The company brought up the issue that Lim refused to provide undertakings that he would not breach them, CNA said.

The judge countered that Lim had already done so upon signing the RCA.

Lim explained that he did not want to provide further undertakings for the non-compete restriction as the "trade restraint clause is unreasonable in scope and duration and amounts to an unlawful restraint of trade", among other reasons.

Judge deems Shopee's case 'weak'

The judge ended up dismissing Shopee's case, according to CNA.

He cited a "lack of a legitimate proprietary interest" and "reasonableness of the geographical restraint" as reasons for casting doubt upon its non-competition restriction.

"Shopee's case is very weak," the judge continued.

He said the "status quo" of Lim  having already started working for ByteDance would be disturbed, should Lim be stopped from working there.

Given the "serious doubts" over the possible of Shopee winning the case, the judge deemed it in the "interests of justice" not to disturb that status quo.

"[Shopee's] prospects are so small that they lack substance and reality," he said.

Top images via Shopee and Getty