January 26, 2022

Non-competition clause: clarification on the legitimate interests of the company

Non-compete clause: definition

The purpose of the non-competition clause is to limit the activity of the employee who leaves the company. It forbids him to work in particular for a competing company or to exercise a competing activity for his personal account without however preventing him from working.

To be lawful, the non-competition clause must be limited in time and space. It must also be essential for the protection of the legitimate interests of the company.

The non-competition clause must also provide for financial compensation because of the constraints it generates for the employee. Otherwise, the clause is null.

Non-competition clause: the legitimate interests of the company

The non-competition clause aims to limit the freedom of an employee to exercise, after the termination of his employment contract, certain activities in order to protect the interests of the company.

But be careful, the employer is not asked to specify these different interests in the non-competition clause for the clause to be lawful.

Indeed, for the Court of Cassation, the fact that the non-competition clause must be essential to the protection of the interests of the company does not imply that the incurred competitive risks are mentioned in the employment contract.

The drafting of the non-competition clause is very limited. To remember nothing, the “Commented models for ACTIV ‘personnel management” documentation offers customizable models and the interactive Lumio solution that allows you to automatically generate documents.

Cour de cassation, social chamber, December 15, 2021, n ° 20-18.144 (the non-competition clause must be essential to the protection of the legitimate interests of the company without this condition implying that the competitive risks incurred are mentioned in the employment contract)

.