30 October 2014 – On July 24, 2014, an employee of a Swiss bank obtained an ex-parte preliminary injunction prohibiting the transfer of personal data to US authorities. The preliminary injunction was granted by the District Court of Horgen (Zurich). The preliminary injunction was published for the first time in October 2014.

The background of this decision is the tax dispute between the USA and Swiss banks. In this regard, the Swiss Federal Counsel granted various banks the authorisation to cooperate with US authorities to resolve their tax dispute, which results in an exemption from art. 271 of the Swiss Criminal Code for the transfer of requested data to US authorities. However, authorised banks still have to comply with other applicable Swiss laws, in particular Swiss data protection and employment law provisions.

The District Court of Horgen held that the stability of Switzerland as a financial centre may constitute an overriding public interest for data transfers abroad. Nevertheless, the bank has to balance the private interests of the employee concerned and the public interest in each individual case. In addition, the District Court held that private interests of the Swiss bank may not be taken into account. Although the Swiss Federal Data Protection Act generally foresees such ground of justification in art. 13, the District Court stated that this does not apply to data transfers abroad. In the latter case, art. 6 of the Swiss Federal Data Protection Act and the grounds of justification enumerated therein (i.e. only overriding public interests) govern exclusively.

In contrast, in the view of the District Court, the employee credibly showed the threat of a possible prosecution by US authorities. Therefore, the District Court prohibited the data transfer via a preliminary injunction.

The preliminary injunction has entered into force. However, in order to uphold the injunction, the employee will now have to file a regular complaint in an ordinary civil proceeding. Should the employee do so, it will then be analysed in more detail by the District Court whether the employee’s data may be transferred to US authorities or not and an ordinary decision will be ultimately rendered by the District Court.

It should be noted that a decision similar to the one of the District Court was rendered by the Geneva Court of First Instance in 2013 (see news).