An employee received, as part of a negotiated termination, a specific termination indemnity of 230,716 euros, the statutory termination indemnity in this case being 75,000 euros.
Several months later, the employee requests payment from his former employer of the financial compensation for the non-competition clause, which he considers was not explicitly and unequivocally waived at the time of termination of his employment contract.
His former employer opposes the payment of this financial compensation, arguing that the employee received a very high specific severance payment, in return for which he formally declared in the termination agreement that he "had been paid all sums, including but not limited to any fixed, variable or additional remuneration, compensation of any kind, expense reimbursements and other sums owed to him by the company in respect of the performance of the employment contract or as a result of the mutually agreed termination thereof, and more generally in respect of any de facto or de jure relationship that existed between the parties."
Can such wording constitute a waiver of the application of the non-competition clause, even if this waiver is not expressly mentioned therein?
Unsurprisingly, the lower court judges, whose decision was upheld by the Court of Cassation, ruled against the employee and granted his request, ordering his former employer to pay him €60,750 as back pay for non-competition compensation.
The Court of Cassation upheld this conviction, after reiterating its case law according to which "the employer's waiver of the non-competition obligation is not presumed and can only result from acts unequivocally demonstrating the intention to waive it."
The waiver of the non-competition clause cannot therefore be inferred from a very general formulation appearing in a termination agreement or contract: this waiver must be made explicitly by the employer.
Therefore, be careful to specifically target the waiver of the non-competition clause when terminating an employee's employment contract!
