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After You Leave: Navigating Non-Competes and Non-Solicitation Under Swiss Law

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Post-contractual non-compete and non-solicitation clauses are among the most frequently litigated topics in Swiss employment law, alongside wrongful dismissals, bonuses, and employment references. This is partly because employees often sign such clauses without fully appreciating their implications and only recognise their far-reaching consequences when changing jobs. This article provides a concise overview of the legal framework.

Non-Compete Clauses

Validity Requirements

Under Swiss law, a capable employee may agree in writing to refrain from any competitive activity after the end of the employment relationship, including operating a competing business, working for a competitor, or holding an interest in one. Such a clause is binding only if the employment relationship gave the employee access to the employer's customer base, manufacturing secrets, or business secrets, and the use of such knowledge could significantly harm the employer. The written form requirement serves a protective function, ensuring that the employee becomes aware of the scope of the obligation. A mere reference to a non-compete provision in staff regulations is generally not sufficient.

Scope and Duration

The clause must be reasonably limited in terms of geographic scope, time, and subject matter so as not to unduly impair the employee's economic prospects. The maximum duration is three years, except in special circumstances. Swiss courts frequently apply a "blue-penciling" approach, narrowing overbroad clauses rather than invalidating them entirely. The scope of a non-compete must be interpreted narrowly, and in case of doubt, against the employer as the drafter.

The June 2025 Landmark Ruling

Compensation for a non-compete obligation is not mandatory under Swiss law, but it may be agreed upon by the parties. A non-compete ceases to apply if the employer no longer has a substantial interest in maintaining it, or if the employment is terminated by the employer without good cause or by the employee for good cause attributable to the employer.

In a landmark decision from June 2025, the Swiss Federal Supreme Court clarified that a compensated non-compete constitutes a bilateral agreement that the employer cannot unilaterally terminate – even subject to a notice period – unless the contract expressly provides for such a right. The Court further held that non-compete compensation is consideration for the employee's obligation to refrain from competition (not damages) and is therefore owed regardless of any alternative income earned or unemployment benefits received, unless the parties have contractually agreed otherwise.

Non-Solicitation Clauses

Customer Non-Solicitation

Non-solicitation clauses, whether targeting the employer's clients or, under prevailing doctrine, its employees, are closely related to non-compete clauses but raise distinct legal questions. 

Customer non-solicitation (a prohibition on poaching the employer's clients) is treated as a specific form of non-compete and falls squarely under the same statutory provisions. The Swiss Federal Supreme Court has confirmed that even a prohibition limited to soliciting specific customers constitutes a restraint governed by these rules. Accordingly, the same validity requirements apply: written form, access to the customer base or trade secrets, and potential for material harm to the employer.

Employee and Supplier Non-Solicitation

Employee and Supplier non-solicitation (a prohibition on poaching the employer's staff or suppliers), by contrast, occupies a less settled legal position. The Federal Supreme Court has reasoned that since employee and supplier poaching belongs to the demand side of the market (rather than the supply side targeted by non-compete law) it is not directly governed by the same statutory rules. Strictly speaking, this means that post-contractual employee and supplier non-solicitation clauses are not enforceable.

The Court, however, has accepted a non-solicitation clause targeting employees where the employees in question were temporary staff, meaning the poaching also affected the employer's supply-side business (i.e., its offering of staffing services to clients).

The treatment of employee and supplier non-solicitation by the Federal Supreme Court has been criticized by some scholars as overly rigid, with authors divided on whether such clauses are more broadly permissible than standard non-competes or should not be enforceable at all post-contractually.

Practical Takeaways

The Court's ruling and the broader legal framework yield the following key points for employers and employees:

  • Non-compete clauses must be carefully and precisely drafted, in particular where financial compensation is involved. Many non-compete clauses in practice appear overly broad or incomplete, lacking restrictions as to duration or geographic scope, rendering them likely unenforceable.
  • Employers should consider including an express contractual right to waive the non-compete obligation – together with a provision that, in the event of such a waiver, no further compensation is owed after a defined notice period.
  • If the employer wishes to offset the employee's alternative income against the compensation, this too must be specifically agreed in the contract.
  • Customer non-solicitation clauses are governed by the same requirements as non-compete clauses and will be scrutinized accordingly.
  • Post-contractual employee and supplier non-solicitation clauses carry a risk of being unenforceable.

Get in touch

Our firm advises clients on Swiss employment law matters, including the drafting and enforcement of non-compete and non-solicitation clauses. If you would like a focused assessment of your existing restrictive covenants in light of this new case law, our team is ready to assist.

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