Restrictive Covenant

Visas, Permits, Passports and Naturalization
1
Hi everyone,

How legal is it for your ex employee to enforce in their contract for you not to apply for jobs with their either current or potential clients for 6 months after your termination?

Little bit of context:

I was on 3 month probation period in which I resigned/quit the company. So they did not fire me.

From what I read in our contract...seems like they want me to stay away and not apply for job from their "current" and "potential" clients for the next 6 months...

Is this possible to have in contract in Switzerland?

2
Please search forum - you will find lots of stuff.

For example: https://www.englishforum.ch/search2.php?q=Non+compete

Short answer - not possible to apply such a clause unless you are paid during the non compete period. Get your emoyer to free you up in writing.

3
True, but they can make a hell of a legal stink before you win and that could be expensive if you don't have legal insurance and embarrass you before your new employer.

4
Have you ever actually experienced a company do this for someone being fired in their notice period or anyone actually?

Unless said person is super senior and has downloaded a client database and intends to do god knows what with it, there is no chance the company can claim much and again, the company has to pay during said period so will be more than happy to release an employee they obviously don't really want on their payroll.

5
Experienced it no, know of it yes. A small Swiss company (the owner really) who felt their interest was at stake. They lost, but as they dragged the new employer into the mix, the offer of employment was withdrawn so in the real world he won.

6
I re read this part of my contract many times and asked some of my friends and family members to read it and see how they interpret it.

Most of them said that the section they wrote implies that I cannot provide them business service as a part of a 3rd party or directly. In my case I cannot provide/sell them my HR recruiter services or be employed by another company to provide them HR services.

Nothing says that I cannot apply to them directly.

Especially since they dont pay me anything during this 6 month length as a compensation.

Also...how am I supposed to know who are their clients?! I know some but they have like 100 clients. It's unreasonable for me to know all of them by heart.

They said current and "potential clients" what doest that even mean...I can make an entry in to my CRM "Google AG" and state that this is my "potential" client.

7
The basic principles of the law in Switzerland is that you cannot be deprived of the means to make a living for yourself. If you're skillset is recruiter, then you cannot be stopped from being a recruiter. This doesn't mean your former employer won't sue you.

It won't embarrass you in front of your new employer, as your old company would be pursuing a case against you, not your new employer.

It seems you were working as a recruiter for some employment agency? They want to ensure you don't poach their business by stealing clients away. If you don't know their client base, nor potential leads, you can't do that.

Really, it depends on how senior you were and how much access you had. If you were relatively junior, I'd just ignore it. You may like to discuss with a lawyer for a single session of advice - it could be a few hundred francs well spent. They could also confirm or otherwise what's said above that restrictive covenants can only apply if you're being paid by your old employer to be on gardening leave.

8
Since we have no context about you, your employer or what you are trying to do it’s impossible to give any meaningful response.

For most employees these clauses are of no consequence as they are just doing the typical work carried out in companies. If however you have specialist knowledge or access to client lists, lists of prospects, sales or marketing budgets etc. that would have a serious impact on the business of your former employer, then you can expect they will take every step available to them to protect their interests.

9
This is the answer, no money, no control on what you do. Check this other thread about garden leave which is the situation where you're payed to not work anymore neither at your current employer nor a new one.

https://www.englishforum.ch/employme...ral-posts.html

Potential clients? No way this is serious.

Things like this inspire me to create a Swissleaks website hosted outside of Switzerland just to upload and share ridicule stuff like this without worrying about privacy laws.

10
There is a very big difference between preventing you from earning a living and restricting you from competing against your former employer for a reasonable period.

Nobody wants to get involved in other peoples legal battles so simply calling the future employer to give evidence of future employment could be enough to achieve the objective.

Never underestimate how people will behave when your actions have a serious impact on their cash flow.

11
Similar covenants that were intended to bind an employee to a company after it supported or (co-)financed off-job education have been ruled on by the federal court. The FC limited the duration of such a covenant to 24 months, with a penalty of not more than 500.- per month. Each month of employment would work off one of those up to 24 months.

This seems worth mentioning, just to demonstrate how narrow the wiggling room is for covenants that are intended to limit the employee's options. IIRC the case was on an IT in finance, one of the best paying sectors.

------------------

Unless OP's top management there's pretty much no way for an employee to be bound by a non-competition clause when the contract ended during the trial period. After all that's what it is for. "Potential clients" is basically everybody, effectively the clause is a ban on employment.

The Federal court ruled on this case , among others:

Marketing assistant, probably employed for more than 5 years because the contractual notice period was 3 months. The noncompetition clause read, paraphrased,

"no competing activity, whether for herself or an employer, swisswide, for 3 years, otherwise a 30'000 penalty is due".

From the deliberations:

"The non-competition clause is only binding if the employment relationship gives the employee insight into the clientele or into manufacturing and business secrets and the use of this knowledge could significantly harm the employer (Art. 340 Abs. 2 Code of Obligations)."

and

"The insight into manufacturing and business secrets must concern specific technical, organisational or financial issues which the employer wishes to keep secret. Knowledge that can be acquired at any company in the same industry is not sufficient."

and further

"A simple employment in marketing, which is connected with an assignment in the "planning, implementation and control of company activities", is in any case not sufficient to be able to prohibit without further ado the use of the technical, organisational or financial skills acquired in a competing company."

(translations by deepl)

12
Hi guys!

First of all I want to thank you all for your support. You are amazingly knowledgeable and all the info you provided me and links help a lot!

I will check up with a lawyer in hopes that he/she can decipher this.

P.S - we as regular people should rebel against companies that use this "english" that is so convoluted that even a C2 English speaker cannot understand what they wanted to say. There should be an ambiguity check that every company needs to pass with each contract in order to deem it "understandable" and "readable"

13
I believe Urs Max is a Swiss lawyer - or at least has expert knowledge of Swiss law.

14
Honestly don't waste money. Ask your HR department to confirm in writing whether they plan to uphold the clause, and if so to also confirm compensation during the period. You will quickly get a letter stating you are free as a bird 🐦