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The employment contract may include a non-competition clause, prohibiting the employee, after leaving the company, from exercising a competing activity likely to harm the interests of the employer .
Its validity is subject to the following cumulative conditions:
– be essential for the preservation of the legitimate interests of the company
– take into account the specificities of the employee’s job
– be limited in time
– be limited in space
– provide for financial compensation
The work contract :-
Taking effect from the termination of the employment contract, the obligation of non-competition does not expire under the effect of the cessation of activity of the company, although the risk no longer exists.
The social chamber of the Court of Cassation ruled on January 21, 2015 ( SOC. January 21, 2015, appeal no.: 13-26374 ).
In this case, an employee bound by a non-competition obligation for 3 years, seized the industrial tribunal, in particular for the purpose of obtaining payment of the pecuniary consideration attached thereto. The judicial liquidation of the company is then pronounced.
The Court of Appeal dismissed the employee, considering her released from her obligation as of the cessation of activity of the company.
However, the social chamber of the Court of Cassation decided otherwise, considering that:
“the non-competition clause taking effect upon termination of the employment contract, the subsequent termination of the employer’s activity does not effect of relieving the employee of his non-competition obligation;
That by ruling as she did, when the employee had not been released from her obligation by the employer and that it was therefore up to her to examine the request for payment of financial compensation on a pro rata basis of the duration of execution of the non-competition obligation, the Court of Appeal violated the said text; »
Thus, the non-competition obligation surviving the cessation of activity of the company, the employee is entitled to claim the financial compensation attached to it, even in the event of judicial liquidation after the cessation .