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Integrated into the employment contract, the non-competition clause prohibits the employee after his departure from the company, the exercise of a competing professional activity, likely to harm the interests of the employer. Anxious to respect the balance of employer-employee relations, judges have gradually identified the conditions for the validity of this type of clause. The system of financial compensation was clarified by a decision of the social chamber of the Court of Cassation of March 7, 2007. Its amount cannot depend solely on the duration of the contract. Its payment must take place after the break-up.
In a judgment of the Court of Cassation of May 16, 2012 (n°11-10760 PFB), the social chamber considers that the judge cannot declare the nullity of such a clause and, at the same time, condemn the employer to pay financial compensation.
In this case, an employee, having complied with his non-competition obligation, demanded from his former employer additional financial compensation taking into account his variable compensation.
The Court of Appeal first considered this clause to be null in view of a derisory consideration, then condemned the employer to pay the “good” reassessed amount in the form of damages.
However, such a clause being declared void by the judges, the financial compensation is no longer justified, whatever the amount. Only damages could be paid to the employee based on the damage suffered.
In the presence of a collective agreement, the amount of the compensation would not have had to be reassessed because it is fixed by the latter (Cass. soc. May 5, 2010, no. 09-40710 D).
The Court of Cassation (1) reiterates on several occasions that the broad scope of the non-competition clause is not sufficient to justify its cancellation. It states that the judges must find out “whether the employee was unable to carry out an activity in accordance with her training, knowledge and professional experience”, without taking any major interest in the geographical scope of the clause.
1) Court of Cassation, civil, Social Chamber, July 3, 2019, 18-16.134: https://www.legifrance.gouv.fr/juri/id/JURITEXT000038762896/
Law firm, Maître DAMY, lawyer at the Nice bar specializing in labor law, update 2022