Until now, there has been no requirement for an employee to
demonstrate any loss suffered to be entitled to damages owing to a
null and void non-compete clause inserted into his or her
In its decision of 25 May 2016 (Cass.soc. 25 May 2016,
n°14-20.578), the French Supreme Court reversed this approach.
Henceforth, an employee will have to prove the loss suffered in
order to claim damages.
In the present case, an employee of a professional investment
company terminated his employment contract, alleging breaches of
the contract by his employer immediately after he had received a
notice summoning him to a pre-dismissal meeting.
Despite the non-compete clause in his employment contract, he
set up a company with one of his colleagues to compete against his
former employer. At the same time, the former employee lodged a
file before the Employment Tribunal, making a number of claims
against his former employer relating to the performance and
termination of his employment contract. In particular, he requested
the Tribunal to order the former employer to pay him damages
resulting from a null and void non-compete clause (the non-compete
clause did not provide for any compensation).
The Court of Appeal dismissed the former employee's claims
relating to the non-compete clause on the ground that he had
suffered no loss owing to the fact that he had launched a competing
The question then was what position the French Supreme Court
would take. Would the judges confirm their previous remedy, which
provides that a null and void non-compete clause automatically
causes a loss to the employee? Or would they confirm the change in
their position contemplated by a decision rendered on 13 April
2016, in which the French Supreme Court formally stated that,
notwithstanding the facts of the case, "the judges will assess
at their sole discretion the existence and amount of any
In its decision of 25 May 2016, the French Supreme Court chose
the second option and dismissed the employee's claim on the
basis that the Court of Appeal had at its sole discretion judged
that the employee had suffered no loss as a result of the
This decision is welcome: in the past, some employees took
advantage of the former remedy to claim damages without
demonstrating any loss suffered; now, employees will have to
demonstrate that they have suffered a loss before claiming damages.
This will be quite straightforward where the employee has failed to
find other employment or has found employment in another business
With this decision, the French labour courts will have no other
choice but to dismiss an employee's claim if the employee has
not complied with the non-compete clause in his or her employment
contract, or if the employer releases the employee from this clause
on termination of the contract.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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