Introduction

Scope of application

Compliance program

Protection of whistleblowers

Audit and sanctions

Rules arising from the Sapin II Law

EU law

French law

Rules derived from competition law

Sapin II Law/Competition

Scope ratione personae

Scope ratione materiae

Scope

Development of plan

Measures included in plan

Inclusion in management report

Vigilance plan

Injunctions

Civil liability

Sanctions

Duty of vigilance (devoir de vigilance)

CSR programs

Reporting

Communication

Reporting and communication

Judicial sanctions

Risk to reputation, strategy and stability

Corporate Social Responsability (CSR)

Middlenext Code

IFA Corpus

AFEP - MEDEF Code

Types

Principles of governance

Principles incorporating CSR values

Principles

Comply or explain

Binding force

Private codes of conduct

Compliance

In principle, private codes of conduct are not binding: they merely define objectives and suggest ways of achieving them. They cannot, of course, be enforced against an undertaking that has not expressly adhered to their principles . But beyond the question of their enforceability against the undertaking, the courts have had occasion to specify that a violation of the recommendations of a private  …

Available legal bases

In principle, private codes of conduct are not binding: they merely define objectives and suggest ways of achieving them. They cannot, of course, be enforced against an undertaking that has not expressly adhered to their principles . But beyond the question of their enforceability against the undertaking, the courts have had occasion to specify that a violation of the recommendations of a private code, in the context of a vote, cannot be sanctioned by the invalidation of the deliberations . Similarly, Article 261-1 of the AMF's General Regulations (RGAMF), which requires that an undertaking targeted by a takeover bid appoint an independent expert when the transaction is likely to generate conflicts of interest within its board of directors, cannot be overridden by the recommendations of the Middlenext Code, “which do not have the binding force of the RGAMF" . In addition, a code of ethics containing only recommendations and rules of conduct for the undertaking's employees cannot create obligations or commitments on the part of the undertaking towards third parties .

However, there are a number of ways in which undertakings can be held to their commitments.

Firstly, the code of conduct may, where appropriate, be incorporated into the undertaking's internal regulations. It is then subject to the provisions of Article L. 1321-4 of the Labor Code, which stipulates that “the internal regulations may only be introduced after having been submitted to the opinion of the undertaking's works council (now the Social and Economic Committee - comité social et économique) or, failing this, to the staff delegates, as well as, for matters falling within its remit, to the opinion of the health, safety and working conditions committee" . In addition, Article L. 1321-4, paragraph 3, specifies that “at the same time as it is publicized, the internal regulations, accompanied by the opinion of the works council (now Social and Economic Committee) or, failing that, the staff delegates and, where applicable, the Health, Safety and Working Conditions Committee , are communicated to the labor inspector”. The commitments made by the undertaking in favor of its employees in the Code may therefore, by virtue of their inclusion in the internal regulations, become binding on them.

Secondly, the law of obligations contains a set of rules that can be applied to undertakings that adhere to private codes, and form the basis of a possible sanction in the event of non-compliance with the obligations in question. Although undertakings contained in codes are voluntary unilateral acts which are not, in principle, binding, it would seem possible to hold undertakings liable on the basis of Article 1100 of the Civil Code, which states that obligations may arise out of the voluntary performance or promise of performance of a moral duty obligation towards others.

In effect, for some, by adopting private codes, “undertakings transform a natural obligation into a civil obligation by which they are bound”. However, commitments must be sufficiently precise and express an unequivocal and deliberate desire to be binding . An undertaking which acts in breach of a social or environmental commitment made voluntarily and in precise terms could be held liable by socially responsible institutional investors on the basis of civil liability law. In effect, it has been ruled that an urban community is entitled, in the same way as associations authorized to defend the environment, to claim compensation for harm, however indirect, caused by an oil slick to the ecology of its territory . An undertaking's commitment to CSR may also be classified as a quasi-contract within the meaning of Article 1300 of the Civil Code, which defines quasi-contracts as purely voluntary acts that give rise to a commitment on the part of those who benefit from them without having a right to do so, and sometimes to a commitment on the part of their initiator towards others. Where the undertaking's statements fall within the scope of the contract, they may also give rise to an action for contractual liability. In fact, the Court of Cassation ruled that, by publishing an advertisement containing incorrect information on the number of previous registrations and presenting a severely damaged vehicle, in disregard of the commitments made in its ethical charter, a newspaper committed a fault contributing to the damage suffered by the purchaser and incurred liability in contract .

The law governing the sudden termination of established commercial relations also provides a basis for sanctioning behavior that contravenes an undertaking's code of conduct. For example, a supplier who offers bottles of champagne and a trip to the distributor's procurement manager, in return for listing his products, commits acts of corruption that are sufficiently serious and contrary to the distributor group's code of ethics, which justify termination without notice . Similarly, where a supplier failed to meet its essential obligations to inspect and monitor its production sites with a view to ensuring compliance with the social and ethical standards set by its customer, and failed to respond seriously and substantively to the customer's requests for measures to be taken, this has justified immediate termination of the commercial relationship, insofar as these failings were of sufficient severity .

Furthermore, companies that fail to meet their commitments may be penalized under consumer law for unfair commercial practices. Article L. 121-1 of the Consumer Code in effect prohibits any action, omission, conduct, approach or commercial communication on the part of a professional, in direct relation to the promotion, sale or supply of a product to consumers, which has the dual characteristic of being contrary to the requirements of professional diligence and of altering or being likely to materially alter the economic behavior of the average consumer. Legal entities guilty of misleading commercial practice are liable, alongside a fine, to the additional penalties set out in 2° to 9° of Article 131-39 of the Criminal Code . This is not an obvious textbook case: a few years ago, NGOs took action against a cell phone manufacturer on the grounds of misleading commercial practice, accusing it of seriously undermining the rights of workers employed in its factories in China, Korea and Vietnam, contrary to its public ethical commitments. Although the Court of Cassation dismissed their claim for lack of standing, this case illustrates the extent to which the risk of a boomerang effect is real, and that it is preferable for enterprises to choose their commitments carefully.

CA Montpellier, 8 October 2019, LawLex202400002846JBJ, holding that without a undertaking's willingness to comply with the recommendations of the AFEP-MEDEF Code, the latter cannot be invoked against it.  See also CA Riom, 24 January 2024, LawLex202400002845JBJ, holding that the AFEP-MEDEF Code does not constitute a directly applicable standard unless expressly provided for by the undertaking's governing bodies.

T. com. CA Paris, 7 February 2017, LawLex202300011521JBJ.

CA Paris, 12 May 2022, LawLex202400002847JBJ.

CA Versailles, 22 March 2013, LawLex202400004221JBJ.

See, by analogy, Cass. com, 23 January 2007, LawLex202300000869JBJ, concerning a moral obligation clause contained in a memorandum of understanding.

Cass. crim., 25 September 2012, LawLex201400000335JB.

Cass. 2e civ, 10 June 2004, LawLex202400003204JBJ.

CA Paris, 5 May 2021, LawLex202100002759JBJ.

CA Paris, 13 March 2019, LawLex201900000339JBJ.

Compliance

148. Available legal bases

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

148. Available legal bases

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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