On 26th September 2018 (Cass Soc 26th Sept. 2018, n°17-16020), the Social Chamber of the Court of Cassation affirmed a particularly interesting ruling on the non-competition clause.
The Court of Cassation thus decided on two issues:
- The possibility of using a private investigator (detective privé) to prove the violation of the non-competition clause. (1)
- The scope of application of the validity clause. (2)
1) Illegality of the use of a private investigator to prove the violation of the non-competition clause by an employee (salarié)
The real innovation of this decision of 26th September 2018 (n°17-16020) is the question submitted to the Court of Cassation.
By this decision, the Social Chamber also decides - for the first time to our knowledge - a fundamental practical question relating to the proof of the breach of the non-competition clause.
In fact, when an employer is a victim of a breach of the non-competition clause by one of its former employee, he is obliged, if he wishes to obtain compensation for the breach, to prove it.
However, such proof is never easy.
In practice, in the absence of other means of proof of the breach of the non-competition obligation, the question of the recourse to a private detective (detective privé) is therefore regularly raised.
The problem is that the use of such private investigations can be characterized, as any procedure affecting privacy and carried out without the knowledge of the person, as an unfair way of obtaining evidence, as such inadmissible in justice.
The Court of Cassation generally considers that any method of controlling the activity of an employee must be the subject of precise information of the latter, which may lose all interest in private investigation.
The question arose, however, whether such risk of inadmissibility of private investigation reports concerns only the employees of the company or persons who are no longer employed.
However, this decision of 26th September 2018 specifically ruled on the question of the use of a private detective in connection with the finding of the breach of a non-competition clause by a former employee.
In this case, the Court of Cassation considers that the fact of having followed its employee for several hours by a private detective constitutes unfair behavior on the part of the employer which justifies the latter being ordered to pay damages to the employee.
On the other hand, it does not directly rule on the admissibility of this type of evidence and suggests that it would be perfectly permissible.
In practice, however, it is necessary to assess with great caution the risks incurred, since if the amount of the damages owed by the employer exceeds that of those which he can obtain because of the breach of the clause, better it is worth giving up the use of a private investigator.
In this case law, the Douai Court of Appeal, confirmed by the Court of Cassation, had sentenced the company to pay the sum of 3,000 euros to its former employee.
2) Validity of a non-competition clause limited to the regions in which the employee has worked.
The conditions of validity of the non-competition clause are laid down by case law since a decision of the Court of Cassation of 10th July 2002 and are four in number as indicated below:
- The clause must be indispensable to the protection of the legitimate interests of the enterprise;
- It must be limited in time and space;
- It must take into account the specificities of the employee's employment; and
- It must include the obligation for the employer to pay the employee a financial compensation.
In the case before the Court of Cassation, the employee, in an attempt to impede the application of its non-competition clause, argued that its non-competition clause was null and void (nulle et de nul effet) because it was purely depending on the will of one of the contracting parties (clause potestative).
He explained that its non-competition clause covered all the regions in which the employee had worked.
However, these regions were determined unilaterally by the employer since its employment contract also included a mobility clause that could lead him to work throughout the French territory.
The Douai Court of Appeal followed the employee in its arguments and declared the non-competition clause null and void (nulle et de nul effet).
On the contrary, the Court of Cassation considered that this clause was perfectly valid: "In so ruling, whereas it had found that the non-competition clause was limited in time and space, the Court of Appeal, which did not characterize an excessive infringement of the free exercise of a professional activity by the employee and added a condition that the law does not provide, violated the aforementioned texts ".
Indeed, the French Supreme Court considers that the condition relating to the delimitation of the geographical perimeter is fulfilled.
By reference to the “regions” in which the employee has worked and taking into account the geographical scope of its mobility clause, the non-competition clause (clause de non concurrence) is limited to a clearly defined scope and which may not, in any event, exceed French territory.
However, it has already been able to judge that a non-competition clause covering the entirety of management activities throughout France was perfectly valid.
This decision is therefore in line with established case law on the non-competition clause.
C. cass. 26 septembre 2018, n°17-16020
Frédéric CHHUM, Avocats à la Cour (Paris, Nantes et Lille)
Membre du Conseil de l’ordre des avocats de Paris
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