France: Exemption from notice period: attention to the non-compete clause cancellation period (Cass. Soc. 21 January 2015, n°13-24471)

30 March 2015

Benjamine Fiedler, Alexandra Stocki

If the employer wishes to waive the application of a non-compete clause, the employer must inform the employee who is dismissed and exempted from performance of the notice period before effective departure from the company, notwithstanding contractual or conventional stipulations to the contrary. Failing this the lifting of the clause is delayed and payment of compensation is due.

This solution is a logical confirmation of the position adopted by the Cour de Cassation in a 2011 decision (Cass. Soc., 22 June 2011, n°09-68.762) in which the Court stated that "in the event of dismissal with waiver of performance of the notice period, the date of the dismissed employee’s effective departure from the company is the date from which the non-compete obligation runs and is the date from which the obligation to pay a financial compensation is due and is the date of reference for calculation of said compensation."

The clarification offered by the ruling consists of the addition of the words "notwithstanding contractual or conventional stipulations to the contrary". Thus in the event of a waiver of the notice period, any conventional or contractual provision setting the duration or start date of the non-compete clause exemption period should be ignored by the employer. The latter has a duty to inform the employee of its decision to waive the clause at the latest on the date of departure from the company.

In practice, it is in the employer’s interests to set out its position in the dismissal letter with regard to application or lifting of the non-compete clause.