French Employment Agreements Should Specifically Name Switzerland in Non-Compete Clauses
If a French employer wants to prohibit an employee from working for a competitor in both the European Union and Switzerland, then the employer should specifically list both jurisdictions in the non-compete portions of an employment agreement. In employment agreements, France and many other jurisdictions limit enforcement of non-compete provisions to territories specifically named in the agreement. Some jurisdictions allow non-compete territories to include several countries, or even entire regions, provided it is necessary for the protection of the employer’s interests. Given these restrictions, because Switzerland is not part of the European Union, a French employer must specifically name Switzerland, and not just the European Union, as a region covered by the non-compete provisions in an employment agreement.
Unless the non-compete clauses specifically list Switzerland, the non-compete provisions will be virtually ineffective should the executive relocate there. In addition, if an employment agreement provides for post-termination compensation, an executive could receive severance from a prior employer while working for a competitor in Switzerland. Thus, all French employers should consider specifically listing Switzerland as a covered region in non-compete provisions in any new employment agreements and should also consider reviewing existing employment agreements to ensure Switzerland is specifically named as an included region in non-compete clauses.