<h3>A. Introduction</h3>
<p>The Swiss Federal Supreme Court&#8217;s January 19, 2024 decision, which was published on February 12, 2024, concerns an internal investigation into sexual harassment allegations against an employee. In that context, the Court assessed whether the internal investigation, which confirmed a reasonable suspicion of sexual harassment and ultimately led to the employee&#8217;s dismissal, had been conducted properly.</p>
<p>The key rulings from the Court&#8217;s decision are:</p>
<ol>
<li>When private employers perform internal investigations, the standard criminal procedural guarantees do not apply;</li>
<li>Employers do not need to provide an employee subject to investigation with advance notice of an interview or an opportunity to prepare. Rather, it suffices if the employer informs the accused employee at the beginning of the interview of its purpose and content;</li>
<li>The absence of a «person of trust» at the interview does not constitute a serious deficiency in the investigation process that would render the employee&#8217;s termination abusive, even if an employer&#8217;s internal regulations entitle employees to be accompanied by a «person of trust» at such interviews;</li>
<li>Employers are not required to inform the accused employee in detail of the allegations against him or her. Generic and anonymized information about the allegations is sufficient;</li>
<li>A reasonable suspicion, confirmed by an internal investigation, is sufficient basis to ordinarily terminate an employee lawfully even if the suspicion is later proven to be unfounded. Before terminating an employee, the employer is not required to prove the truth of the allegations.</li>
</ol>
<p>The Court&#8217;s ruling rejects the views previously expressed by some legal scholars that employers must provide employees subject to investigation the procedural guarantees accorded to the accused person in criminal investigations.</p>
<h3>B. Summary of Facts and Procedural History</h3>
<p>As noted above, the case concerned an internal investigation regarding allegations of sexual harassment at a bank. Employee A contacted the bank&#8217;s ombudswoman for conduct and ethics and reported sexual harassment by Employee B. The bank conducted an internal investigation to clarify the sexual harassment allegations. As part of the investigation, several employees, including Employee B, were interviewed. The internal investigation concluded that there was sufficient basis for a reasonable suspicion that Employee B had sexually harassed Employee A. As a result, the bank terminated Employee B by observing the applicable notice period.</p>
<p>Employee B then brought a claim for unfair dismissal and damages. The Zurich Labor Court rejected the claim. It held that it was irrelevant whether the allegations of sexual harassment were true or not. Rather, the only relevant factor was whether the bank had sufficiently investigated the allegations. The Labor Court found that it had.</p>
<p>Employee B appealed to the High Court of the Canton of Zurich, which concluded that the bank had not afforded Employee B an adequate opportunity to defend himself against the allegations. In particular, it focused on the lack of detail provided by the bank regarding the allegations, which, according to the High Court, prevented Employee B from adequately defending himself and, in particular, from providing exculpatory facts and evidences. The High Court therefore held that the termination was abusive.<a href="#_ftn1" name="_ftnref1">[1]</a></p>
<p>Thereafter the bank appealed to the Swiss Federal Supreme Court, which overturned the High Court&#8217;s decision.</p>
<h3>C. Findings of the Swiss Federal Supreme Court</h3>
<h4>1. No equivalent procedural guarantees as in criminal investigations</h4>
<p>The Court&#8217;s decision clarifies uncertainty respecting the law applicable to internal investigations in private companies. In a case from May 2016,<a href="#_ftn2" name="_ftnref2">[2]</a> the Court quoted legal scholars who expressed the view that in internal investigations, employers had to provide accused employees with procedural guarantees equivalent to those of a criminal proceedings (i.e., a right to prepare for the defense, be represented by a lawyer, and request the taking of evidence).<a href="#_ftn3" name="_ftnref3">[3]</a> As a result, following the Court&#8217;s May 2016 decision, it was unclear what procedural guarantees, if any, were required in internal investigations. In its recent decision, the Court clarified that its 2016 ruling merely reproduced the views expressed by some legal scholars but did not endorse them.<a href="#_ftn4" name="_ftnref4">[4]</a></p>
<p>The Court further explained that, unlike in a criminal proceedings, in which an accused person is subject to the state&#8217;s criminal power and may face criminal liability (including imprisonment and fines), employees and employers voluntarily enter into an employment relationship and the worst threat an employee can face is termination.</p>
<p>According to the Court, the bank&#8217;s internal investigation provided adequate protections for Employee B because the bank interviewed several employees, reviewed Employee B&#8217;s electronic communications, and provided Employee B an opportunity to comment on the minutes of his interview.</p>
<h4>2. No obligation to announce the purpose and the content of the interview in advance</h4>
<p>The Court held that, unlike in criminal proceedings, employers are not required to inform employees in advance of the purpose and content of an internal investigation interview. Rather, it is sufficient if the employee is informed at the beginning of the interview of its purpose and content. There is no legal requirement to provide the employee with an opportunity to prepare for the interview.<a href="#_ftn5" name="_ftnref5">[5]</a></p>
<h4>3. No right to be accompanied by a «person of trust»</h4>
<p>The Court held that the absence of a «person of trust» at the interview does not constitute a serious deficiency in the investigation process that would render the employee&#8217;s termination abusive, even if an employer&#8217;s internal regulations entitle employees to be accompanied by a «person of trust» at such interviews.<a href="#_ftn6" name="_ftnref6">[6]</a></p>
<h4>4. Right to have the allegations clarified</h4>
<p>The Court confirmed that the internal investigation of a private employer is not comparable to a state criminal investigation and that therefore the employer is not required to inform the employee in detail of the allegations against him or her. Rather, generic and anonymized information about the allegations is sufficient. The Court also explained that accuser&#8217;s identity must be kept confidential and may not be disclosed to the accused employee.</p>
<h4>5. Ordinary termination due to reasonable suspicion is not abusive</h4>
<p>The Court&#8217;s ruling reminded that Swiss employment law is governed by the principle of freedom of termination. This means that there are no particular reasons required for an ordinary termination of the employment relationship.</p>
<p>Accordingly, unlike in criminal proceedings, in which there can be no conviction unless the alleged crime is proven beyond a reasonable doubt, an employee may be terminated based on mere suspicions, even if the suspicions later turn out to be unfounded.</p>
<p>Employers still have an obligation to establish that their suspicions are reasonable before terminating their employees. Termination may be abusive if based on mere allegations absent an adequate investigation to ascertain the trustworthiness of the allegations, or if the investigation fails to establish a reasonable suspicion that the allegations are indeed true.<a href="#_ftn7" name="_ftnref7">[7]</a></p>
<h6><a href="#_ftnref1" name="_ftn1">[1]</a>        OGer ZH LA210022 of May 23, 2023.</h6>
<h6><a href="#_ftnref2" name="_ftn2">[2]</a>        BGer 4A_694/2015 of May 4, 2016, E. 2.4.</h6>
<h6><a href="#_ftnref3" name="_ftn3">[3]</a>        BGer 4A_694/2015 of May 4, 2016, E. 2.4.</h6>
<h6><a href="#_ftnref4" name="_ftn4">[4]</a>        BGer 4A_368/2023 of January 19, 2024, E. 4.1.</h6>
<h6><a href="#_ftnref5" name="_ftn5">[5]</a>        BGer 4A_368/2023 of January 19, 2024, E. 4.4.1.</h6>
<h6><a href="#_ftnref6" name="_ftn6">[6]</a>        BGer 4A_368/2023 of January 19, 2024, E. 4.4.2.</h6>
<h6><a href="#_ftnref7" name="_ftn7">[7]</a>        BGer 4A_368/2023 of January 19, 2024, E. 4.2.</h6>


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No Criminal Procedural Guarantees in Internal Investigations

<p>In a decision published this week and marked as a leading case, the Swiss Federal Tribunal (<a href="https://www.bger.ch/ext/eurospider/live/de/php/aza/http/index.php?lang=de&amp;type=show_document&amp;highlight_docid=aza:%2F%2Faza:%2F%2F22-06-2021-1B_333-2020&amp;print=no" target="_blank" rel="noopener">DFT 1B_333/2020</a>) held that communications of persons with lawyers admitted to practice in jurisdictions outside of the EU, EFTA, and the UK are not protected from seizure by the attorney-client privilege unless the person is the target of the criminal investigation.</p>
<p>The case arose out of a criminal investigation involving allegations of bribing foreign officials and money laundering. During the investigation prosecutors seized documents from a third party. The seized documents included privileged correspondence between the third party and its attorneys, who were admitted to practice outside the EU, EFTA, and the UK.</p>
<p>The Swiss Federal Tribunal confirmed that the attorney-client communications of an <em>accused party</em> relating to legal advice and the representation in legal proceedings remain privileged and cannot be searched and seized during a criminal procedure regardless of where the accused&#8217;s lawyer is admitted to practice.</p>
<p>However, the Swiss Federal Tribunal ruled that documents and communications protected by attorney-client privilege and exchanged between a <em>third party</em> and his/her lawyers admitted to practice outside the EU, EFTA, and the UK may be searched and seized in criminal proceedings.</p>
<p>The decision is in line with the Swiss Federal Tribunal&#8217;s restrictive approach regarding the scope of the attorney-client privilege and of other confidentiality interests. Companies and individuals in Switzerland who retain lawyers from outside the EU, EFTA, or the UK should be mindful that their communications may be searched and seized in the course of criminal and regulatory proceedings. In relevant matters, companies and individuals may want to consider retaining lawyers not admitted to practice in Switzerland, the EU, EFTA, or the UK through an attorney allowed to practice in those countries.</p>


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<p>Six partners and one senior counsel were honored with the «Hall of Fame»: <a href="https://www.homburger.ch/en/team/daniel-daeniker" target="_blank" rel="noopener">Daniel Daeniker</a>: Commercial, Corporate, M&amp;A; <a href="https://www.homburger.ch/en/team/marcel-dietrich" target="_blank" rel="noopener">Marcel Dietrich</a>: Competition, <a href="https://homburger.ch/en/team/balz-gross" target="_blank" rel="noopener">Balz Gross</a>: Dispute Resolution – Arbitration; <a href="https://www.homburger.ch/en/team/felix-dasser" target="_blank" rel="noopener">Felix Dasser</a>: Dispute Resolution – Litigation; <a href="https://www.homburger.ch/en/team/georg-rauber" target="_blank" rel="noopener">Georg Rauber</a>: Intellectual Property; <a href="https://homburger.ch/en/team/flavio-romerio" target="_blank" rel="noopener">Flavio Romerio</a>: Regulatory, Compliance and Investigations; and <a href="https://www.homburger.ch/en/team/rene-bosch" target="_blank" rel="noopener">René Bösch</a>: Banking &amp; Finance – Zurich and Capital Markets. The Hall of Fame of The Legal 500 recognizes lawyers that receive constant praise from their clients and that have been ranked top tier for eight consecutive years in The Legal 500 rankings.</p>
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<p>Homburger has been ranked as one of the world&#8217;s 100 leading firms for corporate investigations by GIR 100 in the ninth consecutive year.</p>
<p>The <a href="https://globalinvestigationsreview.com/survey/gir-100/2023/organization-profile/homburger" target="_blank" rel="noopener">GIR 100 guide</a> honors law firms that are able to handle complex and sophisticated cross-border government-led and internal investigations. The guide is published on an annual basis by the independent legal publisher Law Business Research.</p>
<p>Homburger&#8217;s white collar &amp; investigations team is led by <a href="https://www.homburger.ch/en/team/flavio-romerio" target="_blank" rel="noopener">Flavio Romerio</a> and <a href="https://www.homburger.ch/en/team/claudio-bazzani" target="_blank" rel="noopener">Claudio Bazzani</a>. It conducts internal and regulatory investigations in cross-border matters, advises corporations on all aspects of compliance, and it represents firms and managers in white collar crime and regulatory proceedings before Swiss and foreign authorities.</p>


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<p>On November 16, 2023, Homburger&#8217;s White Collar Crime and Investigations Team was honored at the GIR Awards in Washington D.C. Global Investigations Review (GIR) presented the «Most Important Development of the Year» Award for ABB&#8217;s USD 327 million global settlement of corruption allegations in connection with a power plant project in South Africa. In December 2022, ABB concluded this settlement in parallel with authorities in Switzerland, South Africa and the USA. Homburger represented ABB alongside Paul Hastings (USA) and Pinsent Masons (South Africa). The Homburger team was led by partner Claudio Bazzani and included associate Julia Aeschbacher and other members of the White Collar Crime and Investigations Team.</p>
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No Criminal Procedural Guarantees in Internal Investigations

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The Legal 500 ranks Homburger Tier 1 in 12 categories and selected 7 lawyers for the Hall of Fame

Homburger recognized in the 2023 Global Investigations Review GIR 100

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