French Competition Law provides a comprehensive review of the French rules relating to competition: restrictive agreements, commercial negotiation, abuses of a dominant position, procedure and merger control.

French Competition Law

Freedom of trade in principle conflicts with the idea of contract clauses restricting people from carrying on their business in exchange for remuneration. Nonetheless, such clauses are often included in contracts, such as employment contracts, contracts governing the sale or rental of commercial outlets, franchise agreements, contracts for the sale of company shares  or articles of association , s …

Non-compete clauses

Freedom of trade in principle conflicts with the idea of contract clauses restricting people from carrying on their business in exchange for remuneration. Nonetheless, such clauses are often included in contracts, such as employment contracts, contracts governing the sale or rental of commercial outlets, franchise agreements, contracts for the sale of company shares  or articles of association , subcontracts  or cooperation agreements , insurance agents' contracts , or the rules organizing co-tenants in shopping malls or commercial centers. Although such violations are in fact breaches of contract, they are frequently sanctioned on the basis of unfair competition, especially disruption. 

For examples see CA Versailles, 1 July 1999, LawLex200200000926JBJ,specifying that a non-compete clause envisages all active or passive activity in the geographical zone concerned; CA Paris, 20 October 2010, LawLex201000001290JBJ, for a clause stating that the transferor undertakes not to compete with the company for eight years on the territory of continental Europe in a sector of activity described in broad and imprecise terms, considered disproportionate to the protection of a legitimate interest; Cass. com., 18 October 2011, LawLex201100001730JBJ, a transferor of shares, even if subject to an unlawful non-compete obligation, cannot, without violating the peaceful enjoyment clause ("garantie d'éviction"), organize a pageant competing with that of her former employer insofar as she prevents the transferee from pursuing the activity of the transferred company; CA Paris, 6 November 2012, LawLex201200002302JBJ, for a former associate bound neither by a non re-establishment nor a non-compete obligation of non-restoration obligation but who cannot set up its newly created company next door to the premises of his former associate and employer exercising a similar activity without creating a risk of confusion; Cass. com., 24 September 2013, LawLex201300001407JBJ, finding that the share transfer agreement containing a clause prohibiting the transferee and the company from taking an interest in the clients listed in its annex, prohibits the canvassing of those clients but does not prohibit the participation in a call for tender; 8 October 2013, LawLex201300001723JBJ, specifying that the validity of a non-compete clause stipulated on the occasion of the transfer of interests in a company is only subject to the existence of financial consideration in cases where these partners or shareholders had, at the date of their undertaking, the status of employees of the company that they had agreed not to compete with; 26 September 2018, LawLex201900002080JBJ: harm is not necessarily inferred from the breach of a non-compete clause incorporated in a share transfer agreement. See Cass. com., 10 November 2021, LawLex202100005879JBJ, stating that if entrepreneurial freedom and freedom to trade may be restricted by the effect of the peaceful enjoyment guarantee to which the seller of company shares is bound towards the purchaser, it is on condition that the prohibition on the seller re-establishing himself is proportionate to the legitimate interests to be protected, so that a court of appeal cannot hold that the two sellers of the disputed company shares had failed to respect their obligation arising from the statutory peaceful enjoyment clause, the first, by setting up an undertaking more than three years after the transfer of the shares and the second, by having joined it four years after the transfer, without actually establishing whether, with regard to the activity of the undertaking whose shares were transferred and the market concerned, the prohibition on starting up a business was still justified at the time of the facts complained of.

See in particular Cass. com., 18 December 2007, LawLex200800000010JBJ; CA Aix-en-Provence, 12 November 2009, LawLex201100000806JBJ, specifying that the validity of a non-compete clause in a shareholders' agreement is not conditional on the existence of financial consideration; Cass. com., 4 October 2011, LawLex201100001577JBJ, according to which a former director cannot be held liable for having failed to meet its undertaking, set out in the partnership agreement, to devote all its efforts to the exclusive development of the company, whereas he has been put in a position whereby it was impossible to comply.

CA Versailles, 18 September 2007, LawLex200900001750JBJ.

Cass. com., 3 June 2002, LawLex200200006066JBJ; 6 October 2011, LawLex201100001578JBJ; Cass. 1re civ., 15 October 2014, LawLex201400001094JBJ: a lawyer having published an article in the regional press informing the readers of his registration at the bar of Marseille without mentioning that he has transferred his client list and continues to defend the interests of the clients listed in the deed of transfer, and who takes the fees payable to transferred firm and tries to continue the professional relationship with a former contact, violates his legal obligation to guarantee peaceful enjoyment independently of the non re-establishment clause limited to the jurisdiction of the Aix-en-Provence Tribunal de grande instance. 

Cass. com., 24 April 2013, LawLex201300000749JBJ, ruling out compensation for non-compliance by the insurance agent of its obligation of non re-establishment which was already sanctioned by the forfeiture of his rights to compensation, subject to the finding that his behavior has gave rise to the separate harm resulting from the poaching of customers; 2 October 2013, LawLex201300001759JBJ, holding that the validity of the non-compete clause that binds the insurance agent is not subject to the existence of financial consideration.

French Competition Law

61. Non-compete clauses

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61. Non-compete clauses

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Les décisions de justice citées dans ce paragraphe :

Sous parties

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