Setting up a Company as an Employee – What Do You Need to Know
The transition from employment to self-employment often occurs in stages. An employment relationship does not fundamentally rule out self-employment as a sideline, and preparatory measures for setting up a company are also permissible. However, some legal aspects should be taken into account in this regard.
Duty of loyalty during the employment relationship
According to Article 321a of the Swiss Code of Obligations, employees have a duty of loyalty towards their employer. Paid secondary employment that is in competition with the employer's business is not permitted.
However, secondary employment that is not in competition can also be problematic if, for example, it is carried out during paid working hours or uses the employer's resources or data.
Employment contracts may contain stricter rules – such as a general requirement for prior consent for any secondary employment.
Permissible preparatory acts
Certain preparatory acts for later self-employment are permitted while the employment relationship persists, provided they are carried out outside of working hours and do not use any of the employer's resources, for example:
Carrying out market analyses and developing a business plan
Negotiating with investors or lenders
Developing products or services
Arranging for the protection of intellectual property rights (trademarks, designs, patents)
Establishing a legal entity (sole proprietorship, company with limited liability, stock corporation)
However, business operations – and in particular competing business operations – should only be commenced after the employment relationship has ended, subject to special agreements with the employer
Post-contractual non-compete clause and restrictions of the Unfair Competition Act
Many employment contracts contain a post-contractual non-compete clause. However, such a clause is only effective if it is limited to a reasonable extent in terms of time, place and subject matter. (Article 340 et seq. of the Swiss Code of Obligations).
Anyone wishing to set up a business in the same market segment as their previous employer should check at an early stage whether a non-compete clause exists and to what extent it is enforceable. Breaches of an effective non-compete clause can result in considerable claims for damages.
Production and trade secrets are particularly protected. Use or disclosure without permission violates competition law (UCA). This covers, for example, customer data, calculations and price structures or manufacturing processes. In serious cases, criminal law applies.
In addition, the UCA prohibits misleading advertising or the targeted poaching of employees. Anyone setting up their own company and competing with their previous employer must therefore ensure that no confidential information is used and that no unfair methods are employed.