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Recent case law | Non-Compete Clauses in Groups: A surprising decision from the Supreme Court

Recent case law | Non-Compete Clauses in Groups: A surprising decision from the Supreme Court

Published on : 19/10/2018
A recent ruling from the French supreme court has brought some clarification of the fate of a non-compete clause of an employee transferred to another company in the same group. When an employee is the subject of mobility within a group, the non-compete clause provided for in his employment contract does not apply if the two companies are not in a real competitive situation and the employee's transition from one to the other is the result of an agreement between him and his two successive employers.
 
However, the clause resumes its normal effects from the day the contract with the second employer was terminated. Provided, specifies the Court of Cassation that the clause did not reach the term fixed by the parties.
 
This means that if an employee’s contract provides for a non-compete obligation of one year, and he is transferred to another company within the group for one year…when he leaves this new position, he will not be bound by any non-compete obligation. 

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