On February 8 2016 the Zurich Supreme Court confirmed a July 5 2015 district court award regarding an employment law matter in which it had been ruled that a bank employee's personal interest – particularly affecting the employee's claims under data protection laws – must prevail over the bank's concerns that the US Department of Justice would refuse to conclude a deferred non-prosecution agreement with the bank or subsequently withdraw from such an agreement if the data transfer was insufficient.
Under the US-Swiss Deferred Non-prosecution Tax Programme (August 29 2013), Swiss banks can enter into a non-prosecution agreement with the US Department of Justice. Part of the agreement is that under such a programme Swiss banks must agree to transfer for a number of years substantial data relevant to the income taxation of potential US taxpayers, among others, in terms of bank managers who were key in dealing with potential taxpayers and their US bank accounts in the past.
The court considered that the bank employee would fear criminal investigations in the United States once his identity became known, severely endangering the employee. It also considered the likelihood that in future job interviews the employee would have to discuss any personal involvement in past dealings with US taxpayers. Further, the court held that data protection in the United States is notoriously inferior in comparison with European data protection legislation.
Conversely, in both instances the employing bank argued that the bank account manager belonged to the lower managing ranks dealing with client accounts of up to $3 million, which would make criminal investigation less likely.
Finally, the court considered that the bank could achieve a non-prosecution agreement with the US Department of Justice in the meantime – a strong indication to the court that the specific data non-transfer was not detrimental to the bank, at least not for the time being.
For further information on this topic please contact Thomas Rihm at Lutz Partner Rechtsanwälte by telephone (+41 44 368 50 50) or email (firstname.lastname@example.org). The Lutz Partner website can be accessed at www.lutz-partner.ch.
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