Null intra-group mobility clause: an employee cannot accept a change of employer in advance

Imagine: you own a property in Évron, and you rent a flat to an employee of a large company. This employee, who has worked in the same town for years, one day receives a transfer letter: he is being sent to Strasbourg, to a subsidiary of the group. He refuses. The employer dismisses him. The employee brings a claim before the employment tribunal. What will the judge decide?

Many people ask this question: can an employee be compelled to accept a transfer to another company, even if it is part of the same group? The answer is clearly no, as the Court of Cassation ruled in a judgment of 23 September 2009. A mobility clause that provides for a change of employer is null, because it requires the employee to accept a new employment contract in advance.

This article analyses this decision for you, landlord owners or tenants, so that you understand the rights and obligations relating to professional mobility. We will look at the facts, the reasoning of the judges, and above all what this means in practice for you.

The facts: a story that happens every day

Mr X, a property owner in Évron, rented his flat to an executive of Renault France automobile. This employee, hired in 1999, had signed an employment contract containing a mobility clause requiring him to accept any transfer to another company in the Renault group, including a subsidiary. In 2004, the employer offered him a transfer to Strasbourg, to a marketing manager position. The employee refused, considering that this change of posting involved a change of employer, since the subsidiary is a separate legal entity. The employer dismissed him for gross misconduct.

The employee brought a claim before the employment tribunal, which found in his favour. The Court of Appeal confirmed: the clause is null. The employer appealed to the Court of Cassation. The Court of Cassation, in its judgment of 23 September 2009, dismissed the appeal and confirmed the nullity of the clause. It held that an employee cannot accept a change of employer in advance, even within the same group or the same economic and social unit (UES).

This case illustrates a classic conflict: on the one hand, the employer seeking flexibility and mobility within its group; on the other, the employee wishing to remain with his original employer, with his rights and guarantees. The judge ruled in favour of the employee, recalling that the employment contract is a personal relationship between an employer and an employee.

The reasoning of the court — analysed

The Court of Cassation relies on article 1134 of the Civil Code (now articles 1103 and 1104), which provides that agreements lawfully entered into have the force of law for those who have made them. But it draws an essential consequence: one cannot, in advance, waive a fundamental right, such as the right to choose one's employer. Indeed, the employment contract is a contract intuitu personae, i.e. concluded in consideration of the person of the employer. The employee agreed to work for Renault France automobile, not for another company, even a subsidiary.

The judges specify that, to be valid, a mobility clause must be limited to transfers within the same company (the same legal entity). As soon as it provides for a change of employer, it is null. It does not matter that the companies belong to the same group or to the same economic and social unit: legally, they are distinct entities.

The Court rejects the employer's argument that the clause was justified by the needs of the company and the interest of the group. It recalls that the individual freedom of the employee prevails over the economic interests of the employer. In this case, the employee did not have to prove an abuse of right (article 1240 of the Civil Code, which requires reparation for damage caused by fault): the mere fact that the clause imposes a change of employer is sufficient to render it null.

This decision is a confirmation of previous case law (notably Cass. soc., 3 May 2006, no. 04-46.230). It is not a reversal, but it reaffirms a protective principle for employees. The judges thus prioritised the stability of the employment contract over the flexibility of the group.

What this means for you — in practice

For a landlord owner, such as in Évron or Ernée, this decision has an indirect but real impact. If your tenant is an employee who risks being transferred to another company, he can refuse without losing his job. This means he stays in the area, and you retain a stable tenant. Conversely, if your tenant accepts a transfer and moves, you may face an early departure. In this case, check the notice period in the lease.

For a tenant who is an employee, this decision is a protection: you are not obliged to accept a transfer to a subsidiary. If your employer dismisses you for this refusal, the dismissal is null and you can claim damages. Example: an employee in Ernée, transferred to a subsidiary in Lyon, refuses and is dismissed. He can bring a claim before the employment tribunal and obtain up to 6 months' salary (depending on length of service) for dismissal without real and serious cause.

For a purchaser or a property professional, be attentive to mobility clauses in the employment contracts of sellers or tenants. If a seller is transferred and must leave his home, the notice period may be reduced in case of professional transfer (ALUR law). But note: the transfer must be genuine and justified. If it is disputed, the judge may reclassify the departure.

In practice, if you are in this situation, you should: 1) refuse the transfer in writing if it involves a change of employer; 2) keep all documents (employment contract, mobility clause, transfer letter); 3) bring a claim before the employment tribunal within 12 months of the dismissal.

Four tips to avoid this type of dispute

• Check the mobility clause in your employment contract: if it provides for a transfer to another company in the group, even under the same brand, it is probably null. Do not hesitate to consult a lawyer to have it annulled.
• If a transfer is proposed, ask your employer in writing to specify the identity of the host company: if it is a separate legal entity, you can refuse without risk. Keep a record of your reasoned refusal.
• If you are a landlord owner, anticipate your tenant's departure: in case of professional transfer, the notice period is reduced to one month (Law of 6 July 1989). But require written proof from the employer.
• If you are dismissed for refusing a transfer, do not sign anything: do not sign a settlement agreement or a mutually agreed termination without consulting a lawyer. You could lose your rights to challenge it.

Further analysis: related case law and developments

The Court of Cassation had already ruled, in a judgment of 3 May 2006 (no. 04-46.230), that a mobility clause imposing a change of employer was null. The 2009 decision confirms this principle. Since then, the courts have been consistent: an intra-group mobility clause is null if it does not specify that the transfer is within the same legal entity. In 2015, the Versailles Court of Appeal annulled a similar clause in a case involving an EDF subsidiary.

However, a nuance exists: if the clause provides for a transfer within an economic and social unit (UES) recognised by a court decision, it may be valid, because the UES is considered as a single employer. But in practice, the judges are strict: they require that the clause be limited in scope and time, and that it be justified by the nature of the employee's duties.

The trend of the courts is therefore towards the protection of the employee. In the future, it can be expected that intra-group mobility clauses will be increasingly challenged, and that employers will be forced to propose contract addenda for each transfer.

Summary and next steps

FAQ - Frequently Asked Questions

• Can I refuse a transfer to a subsidiary of my company? Yes, if this transfer involves a change of employer (separate legal entity). The mobility clause that obliges you to accept is null.
• What should I do if my employer dismisses me for refusing a transfer? Bring a claim before the employment tribunal within 12 months. The dismissal will likely be null, and you can obtain damages (up to 6 months' salary depending on length of service).
• Can my landlord refuse to reduce my notice period in case of a transfer? No, the law provides for a reduced notice period of one month for professional transfer. You must provide written proof from your employer.
• Does this rule apply to the civil service? No, the civil service has its own rules. For civil servants, mobility may be imposed within certain limits.
• What are the time limits for taking action? To challenge a dismissal, 12 months from notification. To challenge a mobility clause, no time limit, but it is better to act quickly.

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