Legislation and Case Law in France - First Half-Year 2017

Before the major reform of our French labor laws announced for this summer by the new Macron administration, the first part of 2017 brought some interesting legal evolutions as well as case law decisions. We prepared for you a special selection worth your attention! 

I. LEGAL AND STATUTORY UPDATES 

Class actions enter the sphere of labor law: a limited scope (Decree n° 2017-888 of May 6, 2017) 

Introduced by the Modernization of Justice Law of the 20th century on November 18, 2016, class actions allow job applicants, as well as employees who consider themselves to be victims of the same form of discrimination, to be jointly defended in court, whether by a union or by an association.

The decree on May 6, 2017 specifies the applicable procedural rules. 

Clarification of the publication rules of collective bargaining agreements (CBA) (Decree n° 2017-752 of May 3, 2017) 

Pursuant to the Labor Law, CBA are to be made public and collected in a national data base, the contents of which will be published online. These measures must be applied to all CBA concluded starting on September 1st, 2017. 

The signatories involved may, however, agree to anonymize or to publish only part of their CBA (decree of May 5, 2017). 

Specification of the procedures required for receiving reports from whistleblowers (Decree n° 2017-564 of April 19, 2017) 

The Sapin II Law of December 9, 2016 requires all employers of at least 50 employees to establish a procedure for receiving reports from whistleblowers. 

The conditions under which the procedure of receiving alerts issued by employees or by outside collaborators must be established, along with other compulsory stipulations, are fixed by the decree of April 19, 2017. 

This decree will enter into force on January 1st, 2018. 

New obligations regarding the duty of care of multinational companies (Law n° 2017-399 of March 27, 2017) 

This new law concerning the duty of care of parent companies and contracting firms requires that multinational companies implement a plan of vigilance and due care. It aims to hold large enterprises accountable for damages caused by their sub-contractors, particularly those operating abroad.

II. CASE LAW UPDATES 

Managerial deficiencies may justify dismissal on grounds of professional inadequacy (Cass. soc., June 2, 2017, n° 16-13.134) 

A regional director was dismissed for professional inadequacy after a work suspension. The letter of dismissal made reference, among other things, to managerial deficiencies demonstrated through behavior which entailed psycho-social trouble to a number of team collaborators, and also made note of her bossy, authoritarian management style, animated desire to discourage her colleagues, open expression of a lack of respect for others, the use of insulting and degrading language, as well as a scornful, demeaning attitude toward her team. 

The employee asserted that her dismissal for professional inadequacy was baseless, and that, in reality, it relied solely upon disciplinary grounds. 

This argument was rejected by the French Supreme Court, which held that the claims of managerial deficiency invoked by the company did constitute a professional inadequacy, and, thus, did not necessarily qualify as disciplinary grounds. 

An employer may produce in court emails from a professional account that was not declared to the French Data Protection Agency (CNIL) (Cass. soc., June 1, 2017, 15-23.522) 

To justify termination of an employee on the grounds of professional inadequacy, an employer had produced before the labor tribunal the emails exchanged between the employee and company management. 

The Court of Appeals excluded these exhibits, holding that they constituted unlawful evidence as they derived from an undeclared professional email account. Indeed, a professional email account must, at least, be subjected to a simplified declaration to the CNIL. 

The French Supreme Court reversed the appellate decision on the grounds that the absence of a simplified declaration does not render the production of emails in court unlawful, reasoning that: 

• The email account did not contain a system of individualized control of employees’ activity and, thus, did not intrude upon the privacy or liberty of the individual, as defined by the Law on Computer Technology and Freedom; 
• The emails produced constituted exchanges between the employer and the employee, the latter being necessarily aware that such emails were saved or conserved. 

Such a favorable solution to the employer is inapplicable where a company’s professional email account allows for the individualized control of employees’ activity and would call for, in such a case, a standard declaration to the CNIL. 

The misappropriation of information relating to a company’s clientele constitutes a breach of trust (Cass. crim., March 22, 2017, n° 15-85.929) 

A telecommunications company had lodged a complaint concerning a breach of trust against one of its managers, claiming that he had misappropriated information relating to the company’s clientele in order to draw business to a competitor. 

The former employee was condemned to serve a one year conditional sentence, along with a €20,000 penalty for the breach of trust. The criminal court held that this infraction indeed occurs when an employee receiving information related to the employer’s clientele uses this information by unfaithful means with the purpose of drawing a portion of the customer base away from the employer, to a competitor. 

The question of employees’ loyalty also falls within the domain of labor law, where it was recently held that an employer, without having to prove harm, validly dismissed for serious misconduct an employee who, during paid holidays, performed functions identical to those performed for the employer for the benefit of a competitor (Cass. soc., 5 juillet 2017, n° 16-15.623). 

Absent a reinstatement medical visit, only a failure of loyalty duties may justify a disciplinary termination (Cass. soc., March 6, 2017, n° 15-27.577) 

After a sick leave of at least 30 days, a worker must receive a reinstatement medical visit, ideally, on the same day as his return to work and, at the latest, within the eight days following his return. 

In the case at hand, an employee had resumed work after a sick leave which had lasted over 30 days, and ceased working after that. The employer subsequently dismissed him on grounds of serious misconduct, claiming that he had abandoned his position, without having organized beforehand a reinstatement medical visit for the employee. 

The social chamber of the French Supreme Court invalidated the termination. It reasoned that, in the absence of a reinstatement medical visit, an employment contract remains suspended. As a result only a failure in loyalty duties may justify a disciplinary termination in such a case. 

Aside from a breach of loyalty duties, strictly assessed by the judges, no misconduct on the part of the employee occurring upon his return from a sick leave may be used in support of a disciplinary sanction if the employer failed to organize a reinstatement medical visit. 

Clarification of the waiver period of a non-compete clause in the event of entering into a retraining program sponsored by the Unemployment State Agency (CSP) (Cass. soc., March 2, 2017, n° 15-15.405) 

The employment contract of an employee included a non-compete clause, which the employer could waive within the 30 days following the effective departure of the employee. As part of a dismissal on economic grounds, the employee entered into a CSP. The contract was then terminated upon the expiration of the 21-day reflection period during which the employee could accept the CSP. The employer later lifted the non-compete clause. 

The French Supreme Court accommodated the employee’s request for payment of the financial compensation provided for by the non-compete clause on the grounds that, if the employer intends to waive the requirement of the non-compete clause, the employer must act upon these intentions, at the latest, on the date of the employee’s effective departure, notwithstanding any stipulation or provision to the contrary. 

The reasoning of the French Supreme Court relies on the fact that, when an employee enters into a CSP, the termination of the employment contract does not provide notice and occurs as soon as the reflection period expires. 

The consultation period of the works council does not begin to run if the representative body is not provided with the most basic details concerning a project (TGI Nanterre, n° 17/00057) 

A company had issued to the works council a simple informational memo regarding a media consolidation project. Pursuant to legal provisions, the works council had three months to deliver its opinion. However, after the expiration of a period of two and a half months, the council had received no response to questions concerning, among other things, the legal framework of the project, the provisional timeline of its implementation and the potential consequences for the company’s workforce. 

The judge, ruling in summary proceedings, held that the consultation period had not yet begun to run since the works council had not been provided with the most basic information regarding the project. Consequently, he ordered a suspension of the project.