To protect trade secrets and other confidential information, many employers hiring in Switzerland have their new hires sign non-disclosure agreements (also called NDAs, confidentiality agreements, or confidentiality clauses). And while elsewhere in Europe and even Canada, lawmakers are cracking down on NDAs to ensure they’re not used as gagging clauses to silence whistleblowers or workers who have been the victims of discrimination and abuse, there hasn’t been any pushback over the use of confidentiality agreements in Switzerland.
In this guide, we’ll discuss whether NDAs are enforceable in Switzerland, how you can use them to protect your company, and more.
Simply put, non-disclosure agreements (NDAs) protect a company by prohibiting the sharing of confidential information with third parties, like their competitors. These documents are legally binding and also give the company legal recourse should their sensitive information be shared without their permission.
Confidentiality agreements can cover a wide variety of things, including, but not limited to:
Yes, confidentiality agreements are enforceable in Switzerland. Swiss courts have long recognized the importance and ubiquitousness of NDAs in the modern business market. The Swiss legal system is known across the world for its fairness and balance, and it demonstrates this in the way it handles confidentiality breaches: on a case-by-case basis.
Note: our guide is for informational purposes and isn’t intended to provide legal advice.
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You’re most likely to encounter the following two types of non-disclosure agreements in Switzerland:
Interestingly, the laws in Switzerland don’t have any specific standalone legislation about confidentiality agreements. Instead, the legal framework on which enforceability and other, similar matters are based comes from provisions in the Federal Constitution, the Federal Act on Work in Industry, the Swiss Civil Code, the Employment Law, and a few other areas of legislation. The most relevant statutes under Swiss law include the Swiss Federal Act Against Unfair Competition (UCA), the Swiss Criminal Code (CC), and the sections of employment law in the Swiss Code of Obligations (CO).
When you draw up a confidentiality agreement in Switzerland, be sure to include the following information:
It’s both common and smart to have your new employees and contractors sign a non-disclosure agreement before you share any confidential information with them. Generally, the best time to have them sign the NDA is before their onboarding process. Most companies include it either as a clause in or an addendum to the official offer letter (or employment contract).
Yes. Non-disclosure agreements are legally binding documents, and Swiss courts examine and judge them on a case-by-case basis.
The short answer is yes, NDAs can be enforced overseas. However, it’s crucial to specify which jurisdiction the NDA is under so it’s clear which court would take the case. Different countries have varying laws about NDAs and enforcement, and you also need to take into account differences in legal systems, cultural norms, and public policy considerations.
In Switzerland, as in many other nations, there’s a variety of information that is considered confidential or proprietary and can therefore be covered by an NDA. This includes:
Note: If information is part of the public domain, it can’t be included in the non-disclosure agreement.
You should use a non-disclosure agreement in Switzerland in the following situations:
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No. Whereas an NDA prevents one or both parties from sharing confidential information with third parties, non-competes bar employees from participating in activities that compete with their former employer after resignation or termination of employment.
In Switzerland, non-compete clauses are also called restrictive covenants. Employers are legally permitted to ask employees to sign restrictive covenants and to refrain from engaging in competitive activities after they’re no longer working for the company. However, for the non-compete clause to be binding, that employee must have knowledge of trade secrets, their employer’s clientele, and other, similar confidential information. Additionally, the length of the restrictive covenant must be “reasonable” and not so long that it impairs the employee’s ability to find other gainful employment. Usually, in Switzerland, it’s considered excessive for the duration of a non-compete to be longer than 12 months. The maximum length of a non-compete clause in Switzerland is three years.
NDAs protect companies from harm in the case that intellectual property, confidential information, or other proprietary assets become public without their permission. They also give the business legal recourse to take action should the receiving party breach the contract and unlawfully share confidential information with a third party.
The consequences for a breach of confidentiality depend on the penalties agreed upon in the original NDA and the extent of the harm the company suffered as a result. Since the non-disclosure agreement is legally binding, employers are well within their rights to take legal action against the receiving party.
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