Post termination restrictions/Non-compete clause

Visas, Permits, Passports and Naturalization
1
I was recently offered a new job and wanted to better understand how strictly enforceable post termination restrictions are in Switzerland.

For context, I currently work as a commodity market analyst for a mining company. In the new role, I would also work as a commodity market analyst, but for a consultancy specialising in commodity markets. There would of course be no direct competition between the two companies. The only situation where I can foresee a conflict of interest is if I would be providing consulting work on behalf of the new employer to a competitor mining company. In reality, I do not see any tangible cause for concern though.

Any advice on how I should proceed with this? Should I inform my current employer of the exact details of the new role during the resignation and request a waiver (this could become a slow and convoluted process)? Should I seek specialist legal advice before submitting my resignation? Should I just keep quiet (and risk some hefty financial penalties)? Thank you!

Below is the relevant extract from my contract:

You undertake, for a period of 6 months after termination of this Employment Agreement, to refrain from any kind of competitive activity in Switzerland. This applies irrespective of whether the activity is directly or indirectly (e.g. working for or taking an interest in an enterprise which carries out activities similar to those of the Company) in competition with the Company's business.

You shall not for a period of 6 months after termination of this Employment Agreement:

offer employment to or employ or offer to conclude any contract for services with or engage any senior executive of the Company or any affiliated company;

solicit or entice any senior executive to leave his/her employment with or cease his/her directorship of or consultancy with the Company or any affiliated company;

solicit or entice or endeavour to solicit or entice any person to breach his/her contract of employment or contract for services with the Company or any affiliated company or procure or facilitate such by any person, firm or company; or

do or say anything likely or calculated to lead any person, firm or company to withdraw from or cease to continue offering to the Company or any affiliated company any rights of purchase, sale, import, distribution or agency then enjoyed by it.

There is also a definition of "Directly or Indirectly" in the appendix, which I think may be important:

“ Directly or Indirectly ” means (without prejudice to the generality of the expression) whether as principal or agent (either alone or jointly or in partnership with any other person, firm or company), or as a shareholder or holder of loan capital, and whether as a director, member, partner, consultant , employee or otherwise;

2

No personal experience, but other EFers seem to have it.Hope they reply soon.

So, non-competition clauses do exist in contract, but are really hard to make them work in the real world. Look at article 340 of Swiss code of obligations

https://www.fedlex.admin.ch/eli/cc/2…377/en#art_340

Compromising the employee’s future economic activity means that your income should not be affected. So, any serious real-world attempt at prohibition of competition goes along your employer paying a “garden leave” period.

Were you in direct contact with customers? Trade secrets? Otherwise, there’s not much to protect in first place.

Back to the real world, the “in Switzerland” part of your contract makes me chuckle. I work for a multinational and legal entities around the world are created and destroyed at convenience. You work for one company, but the one signing the contract with the customer may be another one.

3
In short: it's legal to put in a contract, you can't be pursued and most likely won't be pursued when you sign your new contract. The view for quite a while now is that if one is in a certain industry he/she has opportunities within that industry and prohibiting him/her from engaging is against the law. I can only guess that your HR simply used an old template with your contract as this is generally disapearing.

4
You'd need to check it with a lawyer, but I have my doubts that the very first sentence would make it very difficult to enforce:

It is way too generic a restriction.

5
They can't prevent you from earning a living in your professional area. That's the law.

How that is interpreted is down to the individual judge and the contract.

Note, in Switzerland we don't have prescedent.

6
No, but they can restricted it for a reasonable amount of time to protect their interests. If they had said something along the lines of not being able to approach any of their customers for a period of say six months, use knowledge of their bidding process to price products or services and so on that would fly. But I don't believe what the OP has posted would fly.

7
Thank you all for your feedback - all makes sense. It has definitely calmed my nerves

8
Hi,

Hope you don't mind me tagging onto this thread, but I have an extremely similar concern that I was hoping for input on.

I have a contract from a Swiss employer, which has a non-compete clause which would prohibit me from working for any competitor within Europe for 1 year after the end of my employment, with no compensation during this year (so it's not gardening leave or similar). I've been told by one of the people at the company involved in the recruitment process that they themselves don't think it's enforceable, but unfortunately aren't allowed to remove it.

From what I've been told by the recruitment team, and what I've also read on threads here, I'm 90% sure it won't be a problem. However, if I did look for another job in the future I would almost certainly want to stay in the same industry, as I'm a technical specialist and would otherwise be taking a backward step in terms of career. I therefore want to be as close to 100% sure as possible before signing that I wouldn't have an issue in the future with the clause.

I'm therefore wondering if anyone here has ever got legal advice on this type of thing, or could recommend someone to speak to to get a more official answer (hopefully without breaking the bank!)?

9
What a joke! So basically you are not allowed to work for any competitor in Europe AND they will not pay you for a year? What are you supposed to do? Emigrate to another continent or starve??

10
Glencore got very deep pockets and lots of lawyers, but at the end of the day it will be very difficult to enforce although they may make it unpleasant for you.

11
Yes, seems completely unreasonable right!? However this is why I'm pretty sure it's not enforceable, but would like to know 100%.

I think this might have been the OP's potential employer. The job I'm talking about is not for a commodities company, but an American company in a different industry, with only a small office in Switzerland. Still much deeper pockets than mine with more lawyers though!

12
Do you have legal insurance? If so maybe check if that includes employment-related queries?

13
Even if the clause is unenforceable consider the stress of being involved in multiple lawsuits and the impact on the new employer.

14
I'm living in Germany at the moment, so unfortunately my legal insurance doesn't cover anything for Swiss contract law. This is why I was wondering if anyone had any experience of getting professional advice on this type of thing or could recommend anyone?

Yes very true, wouldn't be a nice situation to be in at all. I'm hoping if I could get something in advance that is relatively official from a lawyer stating that it isn't enforceable under Swiss law, that I could use it if needed in the future to deter the company from pursuing anything in the courts.

15

Hi all,

I wanted to give an update in case it’s useful for people. I was able to get some legal advice on this. The conclusion in my case was unfortunately not so clear. The lawyer said that within Switzerland it was 50/50 if it would be enforceable or not. Outside of Switzerland, if I were to move to another country within Europe, I was told that it would more than likely not be enforceable, but that it would still be possible for there to be a court case, and although the odds would be in my favour, it would still not be clear cut and 100% sure. So there’s still the stress and unknown of that which isn’t ideal.

What could be useful for others on here are a couple of resources I found during my search.

This link on the SECO website has lots of useful links for getting info on Arbeitsrecht (workers rights): SECO link

Then I found this organisation through a link on the “Angestellte Schweiz” site, which offers advice without requiring a membership, but at much lower rates than what I found from other law offices.
Further At Work link

I got a response within a day, and the attorney spent well over half an hour on the phone with me, in English, explaining all the details. I would happily recommend them to anyone else with similar questions. I’m waiting for the final invoice, but the quote I got was for less than 100 CHF which I think is very reasonable.