Flichy Grangé Avocats - employment law
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Liability of the parent company in redundancies due to faulty interference

Liability of the parent company in redundancies due to faulty interference

Published on : 25/06/2018

Even when a co-employment situation cannot be characterized, it’s still possible for the employees dismissed for economic reasons to sue the engage the parent company or the main shareholder whose decisions, taken at the expense of the subsidiary’s interests, irreparably damaged its economic health and contributed to the loss of jobs.
 
The French Supreme court (Cour de Cassation) has recognized the liability of the parent company because of its improper interference in the management of its subsidiary. In the case at hand, the Court of Cassation approved the conviction of a US investment fund, majority shareholder, sentenced to compensate employees of a subsidiary for the loss of their employment, as their company was directly driven to bankruptcy by shareholder decisions aimed at favoring other group companies in its sole and exclusive interest.

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