Your Notice Period Is the Real Non-Compete

Ask a senior private banker what could stop them moving and the answer is usually the non-compete. Fair enough. A clause that meets the legal conditions can be enforced, and it would be a mistake to assume otherwise. But it only applies if one was validly agreed, and only if the job gave you the client knowledge the law requires. The notice period applies to every departure, with no conditions attached, and it is the part of the contract nobody rereads until the morning they decide to resign. In practical terms, that is why I call it the real non-compete.

Last time we looked at why a discretionary bonus is a thin reason to stay. This is the question that comes next, and candidates ask it within minutes of deciding: what does leaving actually cost, and when can I do it? The move itself is the easy part. The contract is what costs you. I am not a lawyer, and nothing here replaces one, but I can show you where the money and the credibility tend to get lost. The law behind it is simpler than most people assume.

Start with the clock. The statutory default under the Code of Obligations is one month’s notice in the first year of service, two months from the second to the ninth year, and three months after that, ending at the close of a calendar month. The length, and usually the end date, can be changed in the contract, so the document in your drawer overrides the code. Read yours before you assume anything. Under the default rule, timing matters: a resignation letter that reaches the bank on 30 November and one that reaches it on 1 December end a full month apart. What counts is when the employer receives it, so the day you hand it over or send it is a decision worth making on purpose.

Then comes garden leave, which surprises people. The bank is allowed to tell you to stay home. As a rule your salary keeps running while you do, because an employer that does not accept your work still owes you the pay. That sounds like a courtesy. In practice it is the bank’s cleanest tool. You are out of the building, out of the client diary, and your relationships get covered by colleagues while you wait for your start date. Whether you may start elsewhere during a release, and whether your bonus keeps accruing, depends on your contract and the circumstances. Find out before you assume.

Now the non-compete itself. It has to be agreed in writing. It binds you only if the job gave you knowledge of clients or trade secrets, and only if using that knowledge could cause the bank substantial harm. It has to be limited in place, time and scope, and three years is the normal ceiling, exceeded only in special circumstances. A court can cut an excessive clause back rather than throw it out. If you break it, the bank can claim damages. If the contract sets a contractual penalty, paying it can release you from the prohibition unless the contract says otherwise, but you stay liable for any further damage the bank can show. The bank can force you to stop working only if that was expressly agreed in writing, and then only to the extent justified by the harm or threat to its interests and by your own conduct. Courts grant that in exceptional cases. On amounts, the penalty is the most common remedy. Practice tends to set it at one to a few monthly salaries, with annual salary treated as the ceiling. The clause also falls away entirely if the bank ends your employment without you having given it good cause, or if you leave for good cause attributable to the bank.

One more point on the clause. Courts have declined to enforce these clauses where clients follow the person’s own skills rather than the employer, which is common in the liberal professions. Private bankers will tell you their clients follow them. Banks will tell you the clients follow the brand, the booking centre and the platform. That argument is where these disputes are fought, and it is why I would never tell anyone a clause is either safe or fatal without a lawyer reading it.

The risk nobody prices in is quieter: solicitation and data. While you are serving notice, you remain bound by your duty of loyalty. You may not compete, and you may not actively solicit the bank’s clients. A neutral, factual answer to a client who asks about your move is generally fine. A call designed to move the relationship is not. Once you have left, there is no statutory ban on competing, but you stay bound by confidentiality as far as the bank’s legitimate interests require. Copying client data, forwarding it, or moving it to a private device is regularly where departures turn ugly. Geneva is a small town. A banker who leaves with a clean laptop is remembered as professional. One who leaves with a spreadsheet is remembered for that.

Then the money. Take a bonus that has not been paid when you resign. Whether you can claim it depends first on your contract and plan rules. If they promise the bonus, or fix how it is calculated, that is your starting point. Where the contract genuinely leaves it to the bank, the Federal Supreme Court’s 2016 ruling matters. For very high earners, whose total pay actually received reaches at least five times the Swiss private-sector median salary, a bonus the bank reserved as optional stays a gratuity. For 2011, the court’s threshold was CHF 359,280. Below that line, a large bonus paid regularly can exceptionally be treated as variable salary even if it is labelled optional. The ruling concerns bonuses the bank reserved as optional. It does not rewrite an entitlement your contract gives you. The threshold moves with the median wage and with the year of the pay, so work out where you stand against the current figure with a lawyer, not from a number in an article.

Deferred compensation is the other hostage, and two different things get blurred here. The first is forfeiture: unvested awards that lapse when you leave, depending on your plan rules. The second is repayment: amounts already paid that the bank can claim back under a clawback clause. Both affect the same decision, but they work differently and sit in different documents, so ask which one applies to each item. When a new bank offers a compensating payment, that is a separate negotiation. Our Switzerland benchmark describes such payments at Senior RM and Director level as typically sized at six to eighteen months of total prior compensation. That range measures the size of the new bank’s offer relative to your pay. It does not measure what you forfeit or must repay, and the benchmark does not separate the two. It is an indicative range from our mandate activity, not a guarantee. Work out your own exposure from the plan documents first, and use the range only as a reference point in the negotiation.

So the sequence matters more than the decision. Read your contract and your plan rules before the first serious conversation with another bank, not after the offer. Ask the new bank early how it treats unvested awards and clawbacks, and be precise about which is which. Time the resignation around month-end and around the payout dates of anything you care about. Say nothing to clients until you and the bank have agreed what gets said. Hand back everything. And have an employment lawyer read the non-compete and the plan rules before you sign anything.