Reference decision: cc • No. 86-45.591 • 1990-01-17 • View the decision →
Imagine: you are an engineer in Antibes, working for a company in the metallurgy sector. You resign, your notice period (the period between the announcement of your departure and the actual end of the contract) is three months. Your employer excuses you from performing part of this notice period. Eight days after this dispensation, he notifies you that he waives the non-competition clause. You think you are free? Not so sure. The question that plagues every employee: At what point can the employer still waive the non-competition clause? The Court of Cassation answers clearly in this judgment of 17 January 1990. And its answer may surprise you.
This decision, although rendered for the metallurgy sector, sheds light on a crucial point of employment law: the starting point of the period for waiving a non-competition clause. In short, if you are an executive and your contract contains such a clause, the eight-day period for the employer to waive it does not begin at the end of the notice period, but from its notification. A detail that can change everything.
But what exactly does it change for you, whether you are an employee in Cannes or an employer in Grasse? Let's dive into this case.
The facts: a story that happens every day
Mr. X, an executive engineer in the metallurgy sector, worked for a company in Antibes. His employment contract contained a non-competition clause (a clause preventing him, after his departure, from working for a competitor). The collective agreement for engineers and executives in the metallurgy sector provided that the employer could waive this clause within a period of eight days from the notification of the actual termination of the employment contract.
In March 1984, Mr. X resigned. His notice period was three months. The employer excused him from performing part of this notice period. Eight days after this dispensation, the employer notified him that he waived the non-competition clause. Mr. X contested: according to him, the eight-day period runs from the actual end of the notice period, not from the notification. Therefore, the employer had waived too late.
The case was brought before the employment tribunal (the jurisdiction that judges individual labour disputes), then the Court of Appeal (second instance). The Court of Appeal ruled in favour of the employer. Mr. X appealed to the Court of Cassation.
The reasoning of the court — dissected
The Court of Cassation dismissed Mr. X's appeal. It upheld the judgment of the Court of Appeal. Its reasoning: the eight-day period runs from the notification of the notice period, not from its expiry. Why? Because the 'actual termination' mentioned in the collective agreement is understood as the notification of the termination, i.e., the moment when the employer or employee officially announces the end of the contract.
However, note: the judgment specifies that the dispensation from performing the notice period is not a termination without notice. Mr. X indeed had a three-month notice period, even if he did not work all that time. The actual termination remains the notification of the notice period.
What few people know is that this decision fits into a strict interpretation of non-competition clauses. The judges consider that the withdrawal period must be set clearly and predictably for the employer. In other words, the employer must know from the outset whether he can waive, without waiting for the end of the notice period.
undefined, I have encountered cases where employees, thinking that the period ran until the end of the notice period, accepted competing job offers believing the clause was void. Fatal mistake: the employer had waived within the time limit, and the employee found himself in violation of his non-competition obligation, risking damages (financial compensation for the harm suffered by the employer).
In this case, the Court of Cassation applied Article 26 of the collective agreement, but the same principle applies to any similar clause in other agreements. The legal basis is contractual freedom (Article 1103 of the Civil Code – contracts must be performed in good faith) and the protection of the freedom to work (principle that an employee cannot be indefinitely deprived of the possibility to practice his profession).
What this changes for you — concretely
If you are an executive employee (engineer, manager): Your contract or collective agreement may provide a period for the employer to waive the non-competition clause. This period runs from the notification of your notice period, not from the end of your notice period. Example: you resign on 1 March, your notice period is three months, i.e., end of May. The employer has eight days from 1 March to waive. If he does so on 10 March, it is valid. You cannot work for a competitor during the non-competition period (often 6 to 12 months after departure).
If you are an employer (in Cannes, for example): You must act quickly. From the notification of the notice period, you have a very short period (often 8 days) to waive the clause. If you forget, you will be required to pay the financial consideration (non-competition indemnity) for the entire duration of the clause. Example: for an employee in Cannes with a salary of €4,000/month and a consideration of 30% (€1,200/month) over 12 months, the employer would owe €14,400 if he does not waive in time.
If you are a property professional (agent, developer): These clauses also exist in your employment contracts. Be vigilant: the case law applies to all collective agreements that provide a similar period.
Four tips to avoid this type of dispute
- Check your collective agreement: Consult the articles relating to the non-competition clause. Note the exact withdrawal period and its starting point. Do not presume anything.
- Notify your departure in writing: Whether you are an employee or employer, formalise the termination by registered letter with acknowledgement of receipt. The date of notification will be decisive.
- For the employer: act immediately: As soon as you receive the resignation or dismissal letter, decide within 24-48 hours whether to waive the clause. Do not let the period pass.
- For the employee: do not presume waiver: Even if your employer excuses you from the notice period, he can still waive during the initial period. Wait for written confirmation of the waiver or its absence before signing a competing contract.
Further reading: related case law and developments
This 1990 decision has been confirmed by subsequent judgments. For example, the Court of Cassation ruled in 2005 (No. 03-46.123) that the withdrawal period runs from the notification of the dismissal, even if the notice period is served. However, some collective agreements provide for a period from the 'actual termination of the contract', sometimes interpreted as the end of the notice period. The prevailing trend, however, is that of the 1990 judgment: the period runs from the notification.
What this means for the future: the courts favour legal certainty and predictability. Employers must be able to know their obligations quickly. Employees, for their part, must be cautious: never consider a clause void until the period has expired.
Key points to remember
Quick FAQ:
- When does the withdrawal period begin? At the notification of the notice period (resignation, dismissal), not at its end.
- What is the typical duration of the period? 8 days in metallurgy, but check your agreement.
- What if the employer waives after the period? The waiver is invalid. The employee is entitled to the financial consideration.
- Can I work for a competitor during the notice period? No, the non-competition clause applies after the end of the contract, not during.
- What to do in case of dispute? Consult a lawyer specialising in employment law. The employment tribunal procedure can be lengthy but effective.
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