SWITZERLAND Law and Practice Contributed by: Philippe Nordmann, Irène Suter-Sieber, Jonas Knechtli and Gustaf Heintz, Walder Wyss
• the employer must have a substantial interest in the prohibition of competition (such interest particularly ceases if the employment is termi - nated either by the employer without the employee having given reasonable cause to do so or by the employee after the employer has given reasonable cause to do so); and • the enforceability of a non-compete undertaking requires appropriate limitation in terms of place, time and scope so that there is no unreasonable impediment to the employee’s economic advance - ment. While the final point above regarding appropriate limitation is not a validity requirement, agreeing on a (substantial) consideration for the employee’s compli - ance with the non-compete clause does at least sig - nificantly increase the chances of the latter’s enforce - ment. If a court, acting on its free discretion, deems an agreed non-compete undertaking to be unreasonable, it will reduce the respective undertaking to a reason - able extent. Consequences of a violation If the employee violates a valid and enforceable non- compete clause, they become liable to pay damages to the employer. In order to free the employer from the difficult proof of financial damages resulting from such violation, the parties regularly agree on a contractual penalty. The engagement in a competing activity as such may only be prohibited if this has been expressly and unambiguously agreed upon in writing, and if this is exceptionally justified by the employer’s violated or threatened interests and the employee’s particularly inappropriate behaviour. 2.2 Non-Solicits Non-Solicitation Clauses With Reference to Employees The statutory duty of loyalty prevents the employee not only from competing with the employer but also from enticing away employees during the term of the employment. Pursuant to the rather controversial case law of the Swiss Federal Supreme Court (SFSC), however, the fact that the statutory provisions only address post- contractual competition in the supply market (but not
in the demand market) shall, as a matter of principle, exclude any valid agreements on the prohibition of enticing away employees after the termination of the employment. The situation shall only be different if such actions also affect the supply market, as is the case when temporary employees are being enticed away. Non-Solicitation Clauses With Reference to Customers Since this always involves competition, any prohi - bitions with regard to enticing away customers are governed by the same restrictions as common non- compete clauses (see 2.1 Non-Competes ). 3. Data Privacy 3.1 Data Privacy Law and Employment As a general principle, the employer may handle data concerning the employee only to the extent that such data concerns the employee’s suitability for their job, or to the extent it is necessary for the performance of the employment contract. The general provisions of the Swiss Federal Data Protection Act (DPA) also apply to employment relationships. The DPA stipulates a number of principles, including proportionality, transparency and limitations on pur - pose. It notably also provides for a right of informa - tion. This right of information is regularly invoked by employees who have been dismissed by their employ - er with the purpose of accessing their entire “person - nel file”. However, the DPA explicitly clarifies that the right of information is limited to personal data as such (ie, it does not extend to entire documents) and that the request for information can be denied, restricted or deferred if it is manifestly unfounded (particularly if it pursues a purpose contrary to data protection as in the case of a request that is made solely for the purpose of obtaining evidence for subsequent civil proceedings) or if is manifestly querulous. Monitoring and control systems designed to moni - tor the behaviour of employees at the workplace are generally prohibited. If monitoring or control systems are required for other (legitimate) reasons, they must be designed and arranged in such a way that they
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