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Non-competition clause: conditions of validity, proof of non-compliance and sanctions

Procap Detective Toulon
PROCAP DETECTIVE TOULON - Non-competition clause: conditions of validity, proof of non-compliance and sanctions

The “non-competition clause” is a contractual provision which aims to limit the freedom of an employee to work for an employer, often a competitor, or in certain sectors of activity at the end of their employment contract. Intended to protect the legitimate interests of the company, the non-competition clause is very strict: its violation can have serious consequences, for the employee at fault, but also for the new employer who would be complicit.

PROCAP DETECTIVE aims, through this article, to present the legal contours of the non-competition clause, its conditions of validity and its subtleties, which are often overlooked.

Conditions of validity of the non-competition clause

For a non-competition clause to be valid, it must respect a certain number of conditions which are necessarily cumulative. In addition to the fact that it must be free from any lack of consent and meet the provisions of article L.1221-1 of the Labor Code, it also obeys strict rules resulting mainly from social jurisprudence. According to a principle judgment of the Court of Cassation of July 10, 2002, “a non-competition clause is only lawful if it is essential to the protection of the legitimate interests of the company, limited in time and in scope. space, that it takes into account the specificities of the employee's employment and includes the obligation for the employer to pay the employee financial compensation, these conditions being cumulative . Let’s detail this extract a little more.

1st condition: The non-competition clause must serve to protect the legitimate interests of the company

The first condition for the validity of a non-competition clause relates to its primary purpose, which is to serve the protection of the legitimate interests of the company. A vaguely defined jurisprudential concept, the legitimate interest of the company is an essential element of assessment as to the merits of a non-competition clause and, consequently, its validity. Because it constitutes a real obstacle to freedom of work, the non-competition clause, to be justified, must serve exclusively to protect the interests of the company, which may be of an economic, commercial, organizational or still heritage. The legitimate interests of a company include everything relating to its know-how, its organization, its processes and methods, but also its customer or supplier file. Statistically, contracts with a non-competition clause are often used for jobs or qualified positions, in areas with high potential (industry, technology, commerce, franchises), in which the mobility of qualified employees also constitutes a development issue as well as a facilitating factor of unfair competition.

2nd condition: It must be specific

A non-competition clause must never be general in scope, or target the employee's overall skills, but always concerns a specific function as well as a specific job. A clause which prohibits an employee from carrying out an activity consistent with their skills, qualifications or professional experience, without an obvious link with their former position, can be declared abusive: this is why the clause must mention the professional functions which will be prohibited. , not in abstracto , but specifically with regard to the position occupied, the sector of activity and other distinctive elements that the company tends to protect

3rd condition: It must be limited in time and space

To be valid, a non-competition clause must be limited in time and space. Here again, there are no limits set by law, but case law has established assessment criteria inherent to each sector: to guarantee the principle of freedom of work and avoid any abuse, the temporal and geographical limits of Application should not be excessive. Most often, the duration of a non-competition clause does not exceed two years. The geographical limits are defined according, among other things, to the sector of activity of the company, its catchment area, they generally include the jurisdiction of a city, a department or a region. Please note that these limits (temporal and geographical) must be expressly included in the clause .

4th condition: It must provide financial compensation

A non-competition clause will be unlawful if it does not provide for financial compensation. This must take the form of a salary, accompanied by fixed increases in paid leave and subject to social security contributions. The financial compensation must not be simple paltry compensation, it is calculated according to the specificities and difficulties of the position, but also the underlying economic issues. In general, it amounts to between 25% and 50% of the base salary, or even more in certain highly sensitive sectors. The financial compensation is subject to revaluation by court decision. To

  • The non-competition clause only applies to full-time contracts and not to part-time contracts: an incompatibility of principle exists between the imposition of a non-competition clause and the right of any full-time employee.

  • It must be expressly brought to the employee's prior knowledge and inserted into the employment contract: it is not enough for a non-competition clause to be provided for by the collective agreement for it to be valid. Indeed, even provided for by the agreement, it must be brought to the attention of the employee. It is up to the employer to prove that the employee was informed of the existence of the clause. Never tacit, the non-competition clause must always be express.

Evidence of non-compliance with a non-competition clause

In the context of a dispute for non-compliance with a non-competition clause, the burden of proof falls on the employer. Indeed, it is up to him to prove the violation thereof by his former employee. It should be noted that the regime of proof in matters of violation of non-competition clauses is free. However, the employer must ensure, in its evidentiary approach, compliance with the principle of proportionality and loyalty, and avoid any evidence obtained in an unfair manner, and even less by resorting to fraud or violence. Using the services of an evidence professional, such as an approved private detective, can constitute a relevant and legal solution in order to effectively gather evidence while ensuring its admissibility under the law.

Be careful, however, of hasty decisions or those based on fragmentary elements. Proof of violation of a non-competition clause must be based on solid, precise, substantiated and above all cumulative elements. Indeed, the fact, for an employee subject to a non-competition clause, of carrying out an activity with the competitor is not sufficient in itself to characterize a violation. It is important to provide, in addition and cumulatively, proof that he carries out a similar activity there, which is expressly covered by the clause, and that he carries out concrete prohibited acts, within the limits of the allocated geographical sector, and within the period of time provided for by the clause (Cass. soc., Dec. 5, 2001).

Finally, the fact for an employee to request a similar job with a competing company does not constitute a violation of a clause (Cass. soc., May 12, 2004).

Some unscrupulous competing employers could be tempted to trick by hiring an employee bound by a non-competition clause with a view to occupying a position not officially falling within the scope of the clause, but the functions unofficially carried out by the employee actually contravenes the terms of the latter. In this case, the injured company will have to demonstrate the ruse by providing proof of the performance of similar acts covered by the clause, even if the new position is officially different.

Sanctions for violating a non-competition clause

Two courts have jurisdiction to hear disputes relating to non-compliance with a non-competition clause: if the action is directed against the offending employee, the Industrial Tribunal has exclusive jurisdiction. The commercial court has jurisdiction to hear an unfair competition action against the new employer, on the basis of “complicity in violation of a non-competition clause. » In the event of conviction, the employee is exposed to reimbursement of the monetary compensation unduly received since the date of his breach, but also to the prohibition from continuing the activity on the basis of article 1143 of the Civil Code and the articles R. 1455-5 and R. 1455-6 of the Labor Code. He is also exposed to the payment of damages on the basis of articles 1240 and 1142 of the Civil Code, in compensation for material damage and recovery of losses suffered and shortcomings, possibly accompanied by a conviction for compensation under the moral damage linked to the non-competition obligation.

The new employer, complicit in violating a non-competition clause, is not left out. Just like the employee at fault, he is exposed to payment of damages and the cessation of the disputed activity. It should be remembered that the new employer is required to verify the contractual situation of the employee with regard to his previous employment, and in particular the existence and extent of the non-competition clause.


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