Lesli Ligorner

The partner for global law firm Paul, Hastings, Janofsky & Walker LLP’s China employment practice recently visited the firm’s Atlanta office to give a presentation on the PRC Employment Contracts Law, the first revision of China’s employment law since 1995, set to take effect Jan. 1.

Lesli Ligorner moved to Paul Hastings’ representative office in Shanghai a year and a half ago.  Although the division she oversees comprises only a small part of a firm that employs more than 100 people in China (excluding its Hong Kong office), employment issues have become increasingly relevant in the firm’s corporate practice there.

“It wasn’t even a field a couple of years ago.  No one ever thought of needing an employment lawyer in China in the same way that now it’s critical,” said Ms. Ligorner, who has 10 years of experience in employment law in America. “It’s blossomed so much just in the last two years that we needed someone on the ground in China to be able to manage the group.”

Until the mid-1990s, China’s employment legislation was non-existent.  But foreign investment and domestic growth toward a market economy in China have gradually highlighted the need for regulations governing the employer-employee relationship, Ms. Ligorner said.

The new law, broadly speaking, aims at giving individual employees greater rights vis-à-vis their employers, she told an audience comprised of about 20 Paul Hastings employees. 

Among other stipulations that vary depending on locations and industries, the major changes are that every Chinese employee must have a written contract, and contracts must be renewed indefinitely after two fixed-term contracts have expired. 

According to Ms. Ligorner, Paul Hastings has met the employment challenge in China with a vigor that other international law firms have not yet reached.

“With respect to international firms we are unique, one in terms of the size and the commitment, and…I have experience litigating issues the very same issues that predominate in China; it’s just a different legal regime,” she said, adding that only 10 out of the 76 legal professionals in the Shanghai office are expatriates.

Two associates transferred to China to join her department and work on employment issues full-time, and both of them understand matters relating to American companies. 

Even before the new law’s implementation, Ms. Ligorner’s staff has been working to address related issues for its clients, “a tremendous amount” of which are corporations in Georgia that have operations in China, she said.

She said that her department has been actively involved in drafting specialized confidentiality and non-compete agreements for clients and helping them understand the potential effects of the new law, which also drastically increases the power of labor unions. 

But the preparation for the change hasn’t only been outwardly focused.  As a foreign law firm running a representative office, Paul Hastings is regulated differently than many multinational companies doing business in China, and the new law is causing some degree of uncertainty for the law firm as well. 

“The Employment Contracts Law does not expressly apply to representative offices, so we are awaiting implementing regulations to see how they will affect representative offices,” Ms. Ligorner said.

Although most of the attendees at the seminar were from the firm’s employment department, members of the firm’s other branches came to see how the new laws would affect their clients.

Glenn Faulk, a senior immigration administrator whose department handles global immigration compliance for the firm’s global clients assigning employees abroad, told GlobalAtlanta that he attended the seminar to understand how the contract laws would impact expatriates working in China.

“New types of labor contracts will be required for Chinese workers and foreign workers assigned to Chinese payroll. There are going to be varying levels of labor relationship with a Chinese entity whether you’re a foreign national or a Chinese national,” Mr. Faulk said.

This interaction is a primary example of how a host country’s immigration requirements and labor laws intersect, and with the knowledge gained at the seminar, Mr. Faulk said he will know to make sure that his clients contact a labor attorney when working on employment contract issues in China.

Mr. Faulk added although much of Ms. Ligorner’s presentation dealt with issues outside his focus, she did touch on a few issues relevant to his work there, like the “localization” of employees and the differences in classification among corporate entities in China.

Ms. Ligorner, who only has two staff members dedicated to employment issues on a full-time basis, said she has as many as 15 associates splitting time between the firm’s corporate and employment practices. And because she’s the only partner in the employment practice, she often travels between Shanghai and the firm’s representative office in Beijing.

Paul Hastings employs 34 legal professionals in its Beijing office, 76 in Shanghai and 62 in Hong Kong.

The firm also has an office in Tokyo that employs 43.  In total, Paul Hastings operates 18 offices around the world.