Non-Competition And Financial Consideration Clause
LexInter | June 19, 2017 | 0 Comments

Non-Competition And Financial Consideration Clause

Whereas Mr X .., hired on March 29, 1976 as store manager by the company la foire aux bon affaires, now la Foir’fouille, signed on December 13, 1992, a contract appointing him commercial director and providing in particular for the commitment to invest the sum of 500,000 francs in the company Financière Languedocienne; that having been dismissed on July 31, 1997, the employee seized the industrial tribunal to obtain the payment of various sums and in particular compensation based on the non-competition clause;On the first, second and third pleas together:

Whereas there is no need to rule on these means, none of which would be such as to allow the appeal to be admitted;

But on the plea raised ex officio, the parties having presented their observations:

Whereas the employer argues that the means raised automatically tending to the application to the present instance of the case law of the social chamber of the Court of Cassation of July 10, 2002 relating to the nullity of the non-competition clauses which do not involve financial compensation, infringe the principle of legal certainty prescribed by the European Convention for the Protection of Human Rights;

But whereas the legal certainty invoked on the basis of the right to a fair trial under Article 6 of the European Convention on Human Rights , can not spend a vested right to an immutable law, evolution case law falling within the jurisdiction of the judge in the application of the law;

On the background :

Considering the fundamental principle of free exercise of a professional activity , together Article L. 120-2 of the Labor Code;

Whereas a non-competition clause is only lawful if it is essential for the protection of the legitimate interests of the company, limited in time and space, it takes into account the specificities of the job of the employee and includes the obligation for the employer to pay the employee a financial contribution, these conditions being cumulative;

Whereas in order to reject the claim for damages for the non-competition clause, the Court of Appeal stated that it was justified in the interest of the company and did not infringe on the freedom to work, because of its limitation in time and space;

That by ruling as it did, by declaring lawful a non-competition clause which did not include financial compensation, the Court of Appeal violated the principle stated above and the aforementioned text;

FOR THESE REASONS :

BREAK AND CANCELED, but only in its disposition rejecting the request for damages for non-competition clause, the judgment rendered on October 11, 2000, between the parties, by the Montpellier Court of Appeal; returns, consequently, as for this, the cause and the parts in the state where they were before the aforementioned judgment and, to be done right, returns them before the Court of Appeal of Toulouse;

Leaves each party to bear its respective costs;

Considering article 700 of the new Code of civil procedure, rejects the request of Mr X …;

Said that on the due diligence of the Attorney General near the Court of Cassation, this judgment will be transmitted to be transcribed on the sidelines or following the partially overturned judgment;

Thus done and judged by the Court of Cassation, Social Chamber, and pronounced by the president in his public hearing on January 7, two thousand and three.

Contested decision: Montpellier Court of Appeal (Social Chamber) 2000-10-11

 

Masquefa, C,     JCP E Semaine Juridique (company edition), n ° 15, 10/04/2003, pp. 654-655

99-43.334 to 99-43.336
Judgment n ° 2725 of July 10, 2002
Cour de cassation – Social chamber
Cassation without referral

Applicant (s) to the cassation: Mr. Moline (appeal n ° 99-43.334)
Mr. Petrovic (appeal n ° 99-43.335)
Ms. Rabito (appeal n ° 99-43.336)

Defendant (s) to the cassation: Société MSAS international cargo

Given their connection, join appeals n ° 99-43.334, 99-43.335 and 99-43.336;

On the plea raised automatically, taken from the violation of the fundamental principle of free exercise of a professional activity, together article L. 120-2 of the Labor Code, after notice given to the parties in accordance with article 1015 of new Code of Civil Procedure:

Whereas a non-competition clause is only lawful if it is essential for the protection of the legitimate interests of the company, limited in time and space, it takes into account the specificities of the job of the employee and includes the obligation for the employer to pay the employee a financial contribution, these conditions being cumulative;

Whereas MM. Moline and Petrovic and Mrs. Rabito, employees of the Heppner forwarding group, customs broker, were taken over by the company MSAS cargo international, transferee of elements of the business, with effect from March 1, 1991; that new employment contracts have been concluded including a non-competition clause; that employees resigned respectively February 21, 1994, March 16, 1994 and January 24, 1994; that they were engaged by the competing company Office maritime monégasque; that the company MSAS cargo international seized the industrial tribunal in payment of the penalties stipulated in the contracts;

Whereas, to order the employees to pay the company compensation for breach of the contractual non-competition clause, the Court of Appeal stated that the clause prohibiting the direct or indirect exploitation of an activity competitive with that of the employer prohibits the employee from accepting a similar job in a competing company, not created by him;

That by so ruling, while it follows from its findings that the contractual non-competition clause does not include the obligation for the employer to pay the employee financial compensation, which results in it being zero, the court of appeal violated the principle stated above and the aforementioned text;

And given that it is necessary to apply article 627-1 of the new Code of Civil Procedure, the cassation incurred does not imply that it is again ruled on the merits of the violation of the clause of non-competition;

FOR THESE REASONS :

BREACH AND ANNUL, in all their provisions, the judgments delivered on March 4, 1999, between the parties, by the Aix-en-Provence Court of Appeal;

DIT there be no referral;

The MSAS cargo international company stands up to its demands and says that it will have to return the sums collected in execution of the broken judgments, with legal interest from the notification of this judgment;

President: M. Sargos
Rapporteur: Mme Quenson, adviser
General counsel : M. Kehrig
Lawyer (s): SCP Thomas-Raquin and Benabent, SCP Masse-Dessen, Georges and Thouvenin

Leave a Comment

Your email address will not be published.


CAPTCHA Image
Reload Image