Background
Au Forum du bâtiment, G. Jorlin & fils, and Quincaillerie Setin sold building hardware to professional customers and belonged to EQIP, a business group through which companies in the sector pooled purchases and services. In June 2018, EQIP added a clause to its internal rules prohibiting one member from hiring another member’s employee during the six months following the employee’s last day of work.
An Au Forum du bâtiment employee resigned in October 2020, left the company on December 4, 2020, and was immediately hired by G. Jorlin & fils. Au Forum sued for damages, alleging breach of EQIP’s no-hire clause. Quincaillerie Setin later succeeded G. Jorlin & fils through a merger. The Orléans Court of Appeal held the clause unlawful and denied Au Forum’s damages claim, prompting Au Forum to appeal to the Court of Cassation.
The Court’s Holding
The Court of Cassation rejected the appeal. It held that, under Article 1103 of the Civil Code and the principles of freedom to work and freedom of enterprise, a contractual provision restricting those freedoms is lawful only if it is proportionate to the legitimate interests requiring protection in light of the contract’s purpose.
The party seeking to rely on such a restriction bears the burden of proving that proportionality. Because the clause was agreed among competing businesses and restricted both employees’ freedom to work and the member companies’ freedom of enterprise, the Court of Appeal correctly required Au Forum—not Quincaillerie Setin—to show that the restriction was proportionate to a legitimate interest connected with EQIP’s purpose. The Court also dismissed Au Forum’s second ground without a reasoned discussion because it was manifestly incapable of supporting reversal.
Key Takeaways
- A contractual no-hire or non-solicitation clause that restricts freedom to work and freedom of enterprise is lawful only if proportionate to a legitimate interest connected with the contract’s purpose.
- The party seeking to enforce the restrictive clause bears the burden of proving that proportionality.
- A clause’s limited duration and scope do not, by themselves, establish that it protects a legitimate interest proportionately.
Why It Matters
The decision clarifies the evidentiary burden for enforcing no-hire provisions between competing businesses in France. A claimant cannot presume that such a clause is valid and force the opposing party to prove otherwise; it must identify the legitimate interest protected and demonstrate that the restriction is proportionate to that interest.
Businesses participating in purchasing groups, trade networks, joint ventures, and similar collaborations should therefore document why employee-mobility restrictions are necessary and tailor them closely to the collaboration’s legitimate objectives.