FRANCE Law and Practice Contributed by: Laetitia Tombarello and Audrey Demourgues, Bredin Prat
In such cases, the employment contract is suspended and the payment of the employee’s compensation is covered, usually partly, by public social security funds. Under certain circumstances, collective bargaining agreements can also require companies to supple - ment this social security indemnity so that the employ - ees receive their full salary. Obligation of Loyalty and Discretion Employees are subject to a general obligation of loyalty and discretion towards their employer. As a consequence, they are prohibited from disclosing, whether within or outside the company, confidential information or knowledge obtained in the performance of their duties. They are also prohibited from disclos - ing manufacturing secrets. Employee Liability In principle, employees cannot be held civilly liable for damage caused to their employer in the performance of their work. As a consequence, liability clauses in employment contracts cannot be enforced. By way of exception, an employee may be held civilly liable for gross negligence ( faute lourde ) if they commit serious misconduct with the intention to cause the company harm. With respect to harm caused to third parties, employ - ees can only be held personally liable for their actions if they acted outside the scope of their professional duties, without authorisation from their employer, and for purposes unrelated to their duties. The general obligation of loyalty and discretion appli - cable to employees in the performance of their duties typically covers confidentiality, professional secrecy and non-disclosure of trade secrets, but also a non- compete undertaking during the execution of the employment contract. To protect their interests after the termination of an employment contract, companies can provide a spe - cific non-compete clause. These clauses are typically applied to the most senior managers or to employees 2. Restrictive Covenants 2.1 Non-Competes
with specific competitive skills, and usually provide that the employee agrees not to carry out, on their own behalf or on behalf of another employer, an activ - ity similar to that of their employer’s business during a certain period of time following the termination of the employment relationship. To be valid, a non-compete covenant must follow four rules: • it must be necessary to protect the legitimate inter - ests of the company; • it must be limited in time (a certain number of months or years, it being noted that more than 12–18 months is unusual, unless there are specific reasons justifying a longer restriction) and space (eg, a region, a country, a continent); • it must include financial compensation for the employee during the period of the obligation; and • it must be limited in terms of the prohibited activi - ties (ie, it must be justified by the nature of the employee’s duties and must not prevent the employee from finding work corresponding to their qualifications). Any non-compete clause that does not comply with each of these requirements is null and void, and will not be binding on the employee. The company can release the employee from their non-compete obligation upon termination of their employment contract (and in any case before the end of the applicable notice period), if it is expressly pro - vided for in the employment contract or in an applica - ble collective bargaining agreement, or if it is expressly agreed by the employee. As per case law, an employee who violates their non- compete obligation, even on a temporary basis, may have to refund the non-compete compensation to their former employer and may be held liable for damages. 2.2 Non-Solicits Non-solicit clauses that apply to employees after the termination of their contract (eg, to prohibit them from reaching out to the company’s employees, clients or customers) are typically included within non-compete clauses, to which they are often assimilated. As such,
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