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Old 27.10.2011, 13:40
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Validity of non competition clause in Switzerland

Hi ,

I work as a consultant for a small swiss company, in international transfer I am only paid when we get contracts, so I have no fixed salary, and when I am sick I am not paid. Now the company is in a difficult position with the announced retirement of the management, loss of a major client and drastic decrease in work for more than a year.
I have been approached by the competition to work for them in a total different position.I said yes and did not htink it would be an issue considering the situation, until I told my actual boss who now threatens me with the non competition clause that prevents me from working 1 year for the competition after I resign, otherwise it's 10 000CHF. I feel the whole contract is only in favour of the employer.
Can they do that as I have less and less work for me + my boss plans to retire so we have no idea where we are going?
Is this enforcable?
Does anybody have an experience with that kind of non competition clause?
thanks for your answers

Sam
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Old 27.10.2011, 14:25
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Re: Validity of non competition clause in Switzerland

I believe these clauses are illegal, as they impinge on one's human rights.

Why not go to the Palais de Justice in Lausanne and ask them where you can get some advice, and show them your contract. In the German parts of Switzerland there are "Arbeitsgericht" where you can get free advice and free court hearings. I am sure the same exists in Lausanne, you need to find it. Maybe the unemployment office ORP can also give you advice. Or join a union, maybe Unia?

Good luck with the new employer!
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Old 27.10.2011, 14:31
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Re: Validity of non competition clause in Switzerland

Thanks a lot for your answer.
I had the feeling that this was against the basic rights of individual rights.

Any other experience is welcome!
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Old 27.10.2011, 14:31
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Re: Validity of non competition clause in Switzerland

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I believe these clauses are illegal, as they impinge on one's human rights.

Why not go to the Palais de Justice in Lausanne and ask them where you can get some advice, and show them your contract. In the German parts of Switzerland there are "Arbeitsgericht" where you can get free advice and free court hearings. I am sure the same exists in Lausanne, you need to find it. Maybe the unemployment office ORP can also give you advice. Or join a union, maybe Unia?

Good luck with the new employer!
Agree - I think that they are nice things to add to contracts but unenforceable in practice. I was once told that a previous employer (as he would be if you resigned) cannot restrict your future options. If it were legal.....all football clubs would build it into players contracts

Add - this discusses treatment under UK law.....of course may be different here. The "legitimate" way to do it is "gardening leave" where they would keep paying and employing you to do nothing
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Old 27.10.2011, 14:34
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Re: Validity of non competition clause in Switzerland

In Holland, these kinds of clauses are actually legal in some cases.
Do not know about Switzerland however.
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Old 27.10.2011, 14:44
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Re: Validity of non competition clause in Switzerland

These clauses are perfectly legal and usually enforceable in Switzerland. You signed it. Check the wording with a lawyer, you may be able to get out, but the norm is to agree an exit and gardening leave with your current employer.
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Old 27.10.2011, 14:47
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Re: Validity of non competition clause in Switzerland

I have also heard that some employees have negotiated with their new employer to pay to get out of the competitor clause - if they want you!
However, if you are fired the competitor clause is void.
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Old 27.10.2011, 14:53
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Re: Validity of non competition clause in Switzerland

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These clauses are perfectly legal and usually enforceable in Switzerland. You signed it. Check the wording with a lawyer, you may be able to get out, but the norm is to agree an exit and gardening leave with your current employer.
Interesting subject and you sound like you know what you are talking about - so just for interest and education, how does Swiss law handle the following aspects

1. Anti-competitive (restricting who your competition can hire)
2. Restrictive employment practices - as an example, why wouldn't FC Basel get all their players to sign such clauses

Like I say....I'm sure you are right......just interested in the topic
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Old 27.10.2011, 14:54
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Re: Validity of non competition clause in Switzerland

all the changes you mention (Now the company is in a difficult position with the announced retirement of the management, loss of a major client and drastic decrease in work for more than a year) sound like good mitigation clauses to me... I personally think they cannot enforce the no-compete clause in such circumstances.

In any case, 'blanket' non-compete clauses are non-enforceable, as far as I know. If they are restricted (cannot work for a direct competitor, in the same field in which you worked, in the immediate geography etc etc), they carry more weight.

but of course, seek legal advice before you act...
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Old 27.10.2011, 16:16
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Re: Validity of non competition clause in Switzerland

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Interesting subject and you sound like you know what you are talking about - so just for interest and education, how does Swiss law handle the following aspects

1. Anti-competitive (restricting who your competition can hire)
2. Restrictive employment practices - as an example, why wouldn't FC Basel get all their players to sign such clauses

Like I say....I'm sure you are right......just interested in the topic
One of the reasons Switzerland does so well in expat terms is that it allows companies enforce very rigid non compete clauses. These are restrictive in that they do not apply outside of your industry, but if you are in a particularly specialized industry , they can enforce them globally, so even moving countries does not allow an employee escape the non compete penalty. Practically, to enforce these, an employer needs to compensate employees for the lack of free movement, so they normally need to pay you for the gardening leave element (which is usually not as long as the restriction). In terms of football and the fc basel example, football contracts are under the aegis of UEFA, so have their own separate set of rules around movement. It can of course be considered anti competitive, but that is actually the idea for the employer. For assisting, the employee tends to get 6 months sitting in his / her pants playing xbox...while being paid.
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Old 27.10.2011, 16:16
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Re: Validity of non competition clause in Switzerland

I have been told that clauses in a contract are not inflexible there is always a possibility to get aournd them, especially when you do not do the same job with the new employer, that you had no acccess to sensible info, and that you are not taking any client with you ( there are none left !!) I will get a lawyer if things get too complicated...
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Old 27.10.2011, 16:46
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Re: Validity of non competition clause in Switzerland

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Agree - I think that they are nice things to add to contracts but unenforceable in practice. I was once told that a previous employer (as he would be if you resigned) cannot restrict your future options. If it were legal.....all football clubs would build it into players contracts

Add - this discusses treatment under UK law.....of course may be different here. The "legitimate" way to do it is "gardening leave" where they would keep paying and employing you to do nothing
actually, football clubs do include this in their contracts (or did) - IIRC, the landmark case was brought to the European Court of Human Rights by a UK footballer.
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Old 27.10.2011, 16:54
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Re: Validity of non competition clause in Switzerland

Yes it is legal. Here everything that is not illegal is legal.

Next time you sign a contract, read it carefully, and don't sign it if you are not happy with what is written. Ask for changes of the wording (if the employer wants you then they will consider your views).
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Old 27.10.2011, 17:06
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Re: Validity of non competition clause in Switzerland

I agree with the fact that they are legal but also they can be attacked if too much in favour of one part ( here the employer)
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Old 27.10.2011, 17:12
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Re: Validity of non competition clause in Switzerland

When such clauses were put in a contract by an IT consultancy - Everest or something smaller - one of my colleagues got legal advice. While a contract is a contract, there _is_ a basic principle that you cannot deny someone the means to earn a living in their profession/using their skillset. On those grounds, if it came to court, the worker may well have a case.
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Old 27.10.2011, 17:15
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Re: Validity of non competition clause in Switzerland

I do not believe that non-compete clauses are rendered as enforceable in Switzerland if one tells the AHV and tax office that the only way to gain employment (and therefore pay tax) is by working in a similar field.

I have never heard of anyone being successfully sued for joining the competition if no other options were available. It's obviously not right if you're still being paid a wage by the previous employer, but otherwise you have a right to seek gainful employment in your specialized field. Non-competition and non-disclosure agreements are always very open to interpretation and although I've signed the odd one here and there, the wording is always non-specific enough to leave plenty of options open if plan B needs to be activated.
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Old 27.10.2011, 17:15
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Re: Validity of non competition clause in Switzerland

It makes sense... and is again linked to one of the basic human right
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Old 28.10.2011, 08:14
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Re: Validity of non competition clause in Switzerland

Having just been through this type of scenario and having taken legal advice there is a difference between non-competiion and confidentiality. When you leave a company you can be bound for an indefinite period when it comes to the disclosure of commercially confidential information relating to your previous employer. Other than that a non-competition clause with a defined timescale is perfectly legal. However, it is an expensive and time consuming process to take out an injunction to stop you from working for a competitor and as part of this you could build up a robust defence on the basis that you have not harmed the interests of your previous employer. You mention you have taken a 'different' type of positoion and this may be a defence.

These types of contracts (with defined periods of non-competition) are standard practice in many industries and highlights the point that when you sign a contract do not be suurprised if you are held to its terms. That is what contracts are for.
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Old 28.10.2011, 19:46
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Re: Validity of non competition clause in Switzerland

FWIW (this relates to when i was in France).

My company had such clauses as standardin our contracts. However, the clauses were found to be illegal as the company wanted to prevent us going to competitors without compensation.

So the company had to get us to sign a convenant (lots of arm twisting and anguish) to the contract that specified if the company wanted to apply the clause

- they had to tell the employee on the last day
- they had to pay the employee a part of their salary (25% IIRC) for that period as compensation.

As I said this was France, not Switzerland.
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Old 31.10.2011, 18:11
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Re: Validity of non competition clause in Switzerland

These non competition clauses are not enforcable. If one was enforced it would result in a restriction of trade which is protected by Human Rights Law. The Bosman ruling was exactly this point. Just because it is in a contract it does not make it enforcable by law or even legal.
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