The non-competition clause comes into effect after the termination of the employment relationship. Indeed, although the employment contract is terminated, the worker remains bound to the employer through this post-contractual obligation. Thus, the worker commits to refraining from competing with the employer (Art. 340 para. 1 CO and Art. 2 and 4 UCA).
However, this clause, which limits the worker's economic freedom (Art. 27 Const.), must be applied restrictively. If its cumulative conditions are not met, it is null and void under Art. 20 CO. First, its validity is subject to written form (Art. 340 para. 1 CO). Next, the worker must have the capacity to exercise civil rights (Art. 340 para. 1 CO). Then, the employment relationship must allow the worker to have knowledge of the employer’s clientele or manufacturing or business secrets (Art. 340 para. 2 CO). The notion of "manufacturing or business secrets" refers to Art. 6 UCA, namely secrets concerning technical, organizational, or financial matters related to the business. A clause is justified only if the employee can easily divert the employer's regular customers, thanks to knowledge of their habits and the use of services similar to those offered by the employer. Consequently, knowledge regarding the worker’s professional experience or personal abilities, as well as publicly known or easily accessible information, does not fall within the aforementioned definition. This third condition is directly linked to the worker's duty of loyalty to the employer (Art. 321a CO). Finally, the use of this information must be likely to cause significant harm to the employer (Art. 340 para. 2 CO). The mere risk of potential damage is not enough to meet this final condition. It must be more likely than not in the specific case.
In addition to meeting the validity of the four aforementioned conditions, the clause must be limited in various aspects. This includes the place, time, and type of business (Art. 340a para. 1 CO). To judge whether such a restriction is appropriate, various points such as the employer’s legitimate interest in protection and the potential jeopardy to the worker’s economic future must be considered. If the prohibition is excessive, the judge may later reduce it (Art. 340a para. 2 CO).
The consequences of a worker violating a valid non-competition clause are as follows: the worker must compensate for the damage resulting from the violation (Art. 340b para. 1 CO) or may be released by paying a pre-defined contractual penalty (Art. 340b para. 2 CO). Concurrently, the employer may seek to stop the competitive activity if they have expressly reserved this right in the employment contract (Art. 340b para. 3 CO). In such a case, the cumulative conditions of the importance of the employer's injured or threatened interests and the worker’s behavior must be justified.
Finally, the non-competition clause may end by law in various situations (Art. 340c CO). This is the case, for example, when the employer’s genuine interest in restricting the worker’s economic activity disappears or when an unjustified termination occurs.
If you would like more information on this subject, Valentin’s legal consultation will be happy to welcome you at their offices located at 1 Rue du Valentin, 1004 Lausanne, to advise you and answer any questions you may have. We are also reachable by phone at 021 351 30 00 and by email at info@cjdv.ch.
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