When it comes to competition, it's better to go straight than too fast

I've left my job as a manager in a service company. A number of clients terminated their contracts with this company to follow me into my own business. Some colleagues from my former team have also spontaneously joined me. My former employer is now accusing me of unfair competition and is seeking compensation. Can he do so?

L, Greater Geneva

Your former employer could be right, but it all depends on exactly what you did (or didn't do).

In Switzerland, economic freedom allows anyone to set up their own business, even in the same sector as their former employer. However, there are limits to this freedom, particularly when people move too quickly from the status of employee to that of direct competitor, taking customers or employees in the process. Unfair competition is prohibited by a federal law on the subject (LCD), articles 2 and 3 of which prohibit behaviour that is contrary to honest commercial practice.

The Swiss Federal Supreme Court regularly points out that an employee's duty of loyalty under Article 321a of the Swiss Code of Obligations (CO) applies during the employment relationship but ceases at the end of that relationship, unless a non-competition agreement has been concluded. That said, even without a written clause, certain practices may be deemed unfair if they consist of actively preparing to compete with one's employer while still an employee, or if business secrets, customer files or even employees are taken away.

The presence of a non-competition clause in your contract considerably strengthens this prohibition. To be valid, however, such a clause must be in writing, limited in time (three years seems a maximum), limited in space (precise geographical area) and relate to clearly defined activities. It can only be invoked if your position has given you access to sensitive information, the use of which could harm your former employer. Lastly, this clause is only effective if you have left the company on your own initiative and without the employer having caused the contract to be terminated. Breach of such an undertaking may result in sanctions ranging from a court injunction to damages, or even payment of a contractual penalty.

That said, for behaviour to be classified as unfair competition, it is not enough for customers or colleagues to follow you freely. There must be concrete evidence of active, concerted and, above all, prejudicial action. The mere fact that customers or a colleague prefer to continue working with you is therefore not in itself unlawful.