Discuss the various steps that you would undertake

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Reference no: EM133536097

Case: Shanghai Company A sells products in two modes, direct sales and indirect sales by distribution. Employee Li joined Company A in April 2007 as sales manager, in charge of both direct and indirect sales.

In March 2016, after receiving an anonymous whistleblowing and a thorough investigation, Company A found that Li established Company B as one of the stockholders with a registered business scope partially coincident with that of Company A. Also, according to the registration information of Company B, Zhang is its operating director and her husband

is one of the stockholders of Company B. After verification, Zhang is the legal representative of a distributor of Company A, named Company C. By on-site investigation, Company A found that the actual office address of Company B and C is in a same place. Company A also found that Li referred the clients from whom he got inquiries and sales opportunities to Company C, and Company C made the deal with the clients eventually.

In view of this circumstance, Company A terminated the employment contract in May 2016 on the grounds that Li 1) failed to declare that he was engaged in competitive business and caused conflict of interest (establishing Company B), and 2) flew orders, causing conflict of interest and substantial economic loss to the employer. Li thought the termination is illegal and initiated the labor arbitration.

Question

Discuss the various steps that you would undertake in order to remedy the conflict between Company A and Company B.

Include citations not older than 5 years.

Reference no: EM133536097

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