Category: Legal news

Looking back and forward

Since the Internet entered in home in the 1990s, our relationship with cyberspace has evolved : we have moved from a libertarian philosophy to the application of our real law in the virtual world, and finally, to the need to make the actors of the Web accountable.

The whole challenge of the legal framework of the cyberspace can be summed up in one word : adaptability. Over the last 20 years, legislators and judges have constantly adapted the legal framework of the liability of technical intermediaries to the Web evolution in France and within European Union.

“Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us.”^[1]

This was the philosophy of cyberspace at the time of the advent of the Internet: the promise of a new universe in which no political control is possible and where freedom is the rule.

But quickly, faced with the excesses of bad behaviour on the Internet, it became necessary to apply real world law in the virtual world. In France, the first decision that marked the end of the libertarian philosophy of the web concerned copyright^[2]. On that occasion, the judges affirmed that there is indeed infringement of copyrighted works when they are made available to Internet users without the authorisation of the rights holder.

Once it had been established that real world law should also govern the virtual world, the question then arose was whether Web actors should be held liable for damage to the rights of third parties caused by the dissemination on the Internet of illegal content provided by their customers.

Initially, French judges considered that hosting providers were bound by an obligation of vigilance^[3]. In « Estelle Hallyday v. Alter » case, intimate photographs had been posted on Internet through the server of the hosting company Altern.org. French judges enjoined the defendant to make impossible to disseminate the photographs on the sites it hosts, because they considered that the host « clearly exceeds the technical role of a simple transmitter of information » and must « obviously assume, with regard to third parties whose rights would be infringed (…) the consequences of an activity that it has deliberately undertaken to carry out (…) »^[4]. By this decision, the French judges chose to make Web actors responsible for the consequences of their economic activities on the Internet.

This case law was part of an awareness’ movement, at the end of the 1990s, of the growing power of technical intermediaries on the Internet. In 1999, in response to John Perry Barlow’s Declaration, the American jurist Lawrence Lessig published a book entitled Code is Law in which he demonstrated that the libertarian logic of the Internet is only an utopia and that cyberspace is indeed regulated by the Code: it creates normativity in cyberspace. For lack of being regulated by law, cyberspace is therefore framed by the codes established by private companies of the web. Then the regulation of the web was left in the hands of private interests.

The public authorities, taking the measure of the ongoing digital revolution, have taken up the subject in order to regulate the responsibility of the technical service providers involved in setting up and distributing services on the Internet. In 2000, the European Commission, inspired by the US legislation on copyright in the information society^[5], adopted the so-called E-commerce Directive^[6]. In France, this directive was transposed by the law for Confidence in the digital economy known as the LCEN^[7].

Unlike the French judge, the European legislator has opted for a more lenient liability regime for technical intermediaries: they are not bound by a general monitoring obligation for information they transmit or store^[8].

The mere conduit and caching providers enjoy a kind of immunity regarding the information circulating on their networks. Indeed, the law provides that the access provider is not responsible for the content, unless it leaves its role of mere conduit or caching provider.

The hosting provider will not be liable for the content stored on its servers under two cumulative conditions : firstly, it must not have knowledge of the illegal activity or information – knowledge of the litigious facts is presumed to be acquired by the host when it is notified of certain elements provided for by the law^[9] – and, secondly, as soon as it has knowledge of them, it must act promptly to remove the information or make access to it impossible. Compared to French common law on civil liability, hosting providers benefit from a lighter liability. However, they lose this benefit if the two conditions are not fulfilled.

Finally, the editorial service provider who makes pages available to the public on the Internet and which he controls the content, is subject to an obligation of monitoring the information he publishes. The editor will thus be considered responsible for all illicit content on his website^[10].

The question of the liability of the various Internet actors has brought to light a new problem: the identification of the technical intermediaries, in particular distinguishing a host from an editor. If the qualification of host or editor is that important, it is because it determines the liability regime. And regarding the lighter liability of the hosting provider, it is in the interest of the Web actors to be identified as hosts by the judges. If it is so thorny, it is because the development of Web 2.0 has highlighted the fragility of the categorisation established by the LCEN. However, case law has succeeded in identifying the criteria for qualifying a hosting provider: the criteria of data storage as the main activity carried out by the site and the criteria of the passive role of the host in its storage activity with regard to the content stored^[11]. On the contrary, the free or paid nature of the service and the presence or absence of advertising on the site concerned are ineffective in identifying a host. According to this jurisprudence, the following sites have been recognised as hosts: the video sharing sites Dailymotion, Fuzz or Amen^[12], search engines such as Google^[13], the e-commerce platforms eBay and Amazon^[14], or the social network Facebook^[15].

In 2019, in order to fight against the piracy of copyrighted works on the Internet, the European Commission adjusted the liability regime of sharing^[16]. A new type of host was created: the « provider of online content sharing services » (i.e. YouTube, Instagram, TikTok). This is a host whose main objective is to store and give the public access to a large quantity of copyrighted works that have been uploaded by its users. According to Article 17 of the Directive, a platform which provides public access to a protected work uploaded by its users must obtain prior authorisation from the right holders. In the event that no authorisation has been granted, a derogatory liability regime applies to providers of online content sharing services: they are liable for unauthorised acts of communication to the public. In other words, Article 17 of the DANUM Directive breaks with the E-commerce Directive’s philosophy, because the DANUM Directive imposes targeted monitoring of uploaded content to prevent the posting or re-posting of illegal content. This obligation to monitor sharing platforms technically takes the form of preventive filtering mechanisms. The Republic of Poland, considering that these mechanisms violate the freedom of expression of platform users, initiated an action for annulment before the CJEU. The latter took the opportunity to confirm the legality of the liability regime for providers of online content sharing services, particularly regarding the absence of a general monitoring obligation for technical intermediaries^[17].

Twenty years after the adoption of the E-commerce directive, the distinction of technical intermediaries into three categories seems to be inadequate. Indeed, since 2000, new web actors have appeared: social networks, search engines and e-commerce platforms. The European Union has drawn the consequences of this digital evolution by adopting the Digital Services Act^[18] in order to modernise the legal framework laid down by the E-commerce directive. The DSA is applicable to the already known intermediary services: mere conduit, caching and hosting services. However, the DSA innovates in the categorisation established by the E-commerce Directive because the Regulation now creates sub-categories of hosting providers: 1) classic hosting providers as provided by the E-commerce Directive, 2) online platforms and search engines, and 3) very large online platforms and very large search engines (with a monthly number of recipients in the EU of 45 million or more).

The main principles governing the civil liability of technical intermediaries laid down by the E-Commerce Directive are retained by the DSA, whereas the opposite solution was adopted by the Copyright Directive regarding providers of online content sharing services. Thus, technical intermediaries retain their lighter liability for the information they transmit, store or host and the cases law defining the contours of the host are not, in principle, challenged.

Moreover, the DSA innovates by imposing specific obligations on technical intermediaries according to a five-tier pyramid scheme depending on the activity of the intermediary: intermediate service providers, hosts, online platforms, e-commerce platforms, and together very large online platforms and very large search engines.

By adapting the categories of technical intermediaries, the European legislator has taken the measure of the evolutions of Web 2.0. Moreover, today, these categories are broad enough to capture new digital actors emerging with the Web 3.0, such as the Metaverse of the Meta company, which is considered as a platform within the meaning of the DSA.

Finally, the next challenges facing European and French judges and legislators will be, not to categorize the new actors of the Web, but to determine what roles they play in the infringements that occur on their networks to know whether the lighter liability regime should be applied or not[19]. As such, French lawyers have an important role to play in defending the interests of Web actors, whether they are provider or recipient, by taking into account the technical and legal evolution. These reflections are even more relevant when we see the increasingly active role that technical intermediaries play in our daily lives.

Corinne Thiérache, Partner

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^[1] John Perry Barlow, A Declaration of the Independence of Cyberspace, February 8th, 1996, wrote in response to a US law aimed to censor certain content and limit freedom of expression on the Internet

^[2] TGI of Paris, August 14th, 1996; n°60138/96 ; « Ecole centrale de Paris et ENSPTT v/ Brel and Sardou »

^[3] TGI of Paris, June 9th, 1998; JCP E 1998.953; « Estelle Hallyday v/ Altern.org »

^[4] Court of Appeal of Paris, February 10th, 1999; n°1988/16424 ; « Estelle Hallyday v/ Altern.org »

^[5] Digital Millennium Copyright Act (DMCA) adopted on October 8th, 1998

^[6] Directive 2000/31/EC of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market

^[7] Law n° 2004-575 of 21 June 2004 for confidence in the digital economy

^[8] Article 6.I-7 LCEN

^[9] Article 6.I-5 LCEN

^[10] Law n° 82-652 of July 29th, 1982, on audiovisual communication and Law of July 29th 1881 on the freedom of the press

^[11] CJEU, March 23rd, 2010; C-236/08, C-237/008, C-238/08 ; “Google France SARL and Google Inc. v/ Louis Vuitton Malletier SA and Others”.

^[12] Court of Cassation, February 17th, 2011; n° 09-67896, n°09-13202, and n°09-15.857

^[13] Court of Cassation, July 12th, 2012; n°11-13.666

^[14] Court of Cassation, May 3rd, 2012; n° 11-10.505, n°11-10.507, and n°11-10.508

^[15] TGI of Paris, April 13rd, 2010; “Giraud v/ Facebook France

^[16] Directive 2019/790 of April 17th, 2019, on Copyright and related rights in the Digital Single Market transposed in French Law by and Order n° 2021-580 of May 12th 2021

^[17] Court of Justice of the European Union, April 26th 2022; C-401/19

^[18] Regulation 2022/2065 of October 19th, 2022, on a Single Market For Digital Services and amending Directive 2000/31/EC

[19] About a trademark infringement, see CJUE, December 22nd, 2022 ; C-148/21 and C-184/21 ; « Louboutin v. Amazon »

Since its appearance in the 90’s, e-commerce has revolutionized the consumption habits and the distribution of products and services in the world. Its development, intrinsically linked to the evolution of new technologies, has been growing rapidly for two decades[1].

The consecration of electronic commerce has brought to light new stakes (1) to which the law has been forced to adapt (2) in particular to face the new operators: the online platform (3).

1. The challenges of electronic commerce

E-commerce has given rise to new economic players, new distribution methods and new issues that continue to challenge the French and European authorities. The distribution of products and services can no longer do without the Internet. The website becomes essential to such an extent that today, in the European Union, 78% of commercial companies have a website[2]. Similarly, the share of French companies using social media has tripled from 20% in 2013 to 61% in 2021[3]. Professionals, including the most reluctant at first, such as luxury manufacturers, have fully embraced these new modes of communication to transform them into powerful marketing and sales tools for their products and services in order to gain new customers that their traditional geographic markets did not allow them to reach, and establish targeted relationships with them.

The reinforcement of competition and the reinforcement of the transparency of pricing policies are eminently favorable to the buyer (consumer or professional) who has an offer accessible at any time (subject to an internet connection!) and a comparison tool superior to that of traditional trade.

The stimulation of competition and transparency nevertheless entail risks of unfairness and parasitism which have increased. There are many examples. The consumer does not hesitate to compare products and services online before buying them in a physical store. On the other hand, once the advice of the physical salesman or the demonstration of the product is done in the physical store, the consumer will order the product online to benefit from a more attractive price or from the protection of the online sale. Quality products with well-known or recognized brands are used as loss leaders and sold online at knock-down prices by uncontrollable resellers… As for price transparency, it exposes the head of the distribution network to temptations of control… incompatible with the prohibition of cartels.

2. And the law in this revolution?

In order to protect consumers and ensure healthy competition, existing standards have been adapted and new rules have been adopted. The normative framework resulting from both French and European law is forced to be constantly updated in order to take into account the constant evolution of this market.

The main principles of consumer law, such as fairness and transparency of information, have been adapted. E-commerce has brought distance selling into the digital age[4]. Specific information must be provided to the consumer on the website. Online advertising as well as the processing of personal data collected are regulated. New statutes for website hosts and website editors have been specifically created with their own liability regime[5].

In the same way, in the relationships between professionals and particularly in the distribution networks, the effective use of the Internet is protected: direct and indirect restrictions are sanctioned as well as anti-competitive practices caused by online sales such as online price fixing, discrimination between physical and online sales or geo-blocking[6].

3. An omnipresent operator: the online platform

Online platforms, which appeared in the early days of e-commerce, such as Amazon in 1994 or Booking in 1996, have become unavoidable giants for both consumers and companies using their services.

Expedia[7] and Amazon[8] cases have highlighted their abuses towards professional users. The first one imposed to the hotel owners the automatic application of better pricing conditions and promotional offers. The second case gave the company the right to terminate a contract with a professional vendor at its own discretion. The French judge did not hesitate to condemn these practices and to fine these platforms to 1 million and 4 million euros respectively.

The French[9] and European[10] legislators are supervising the activity of these platforms by subjecting them to obligations of fairness and transparency, and by imposing the respect of special rights for consumers and the regulation of online reviews.

The next step is European with the two latest European regulations:

• Digital Service Act (DSA)[11], (applicable from 17^th February 2024): whose aim is to better protect European internet users and mitigate the risks of misinformation and aims at making platforms accountable.
• Digital Market Act (DMA)[12] (applicable from 2^nd May 2023): whose aim is to fight against the anti-competitive practices of the giants of the net and in particular of GAFAM (Google, Apple, Facebook, Amazon and Microsoft) and to correct the imbalances of their domination on the European digital market by imposing new obligations and prohibitions under penalty of heavy fines.

One thing is certain: technological evolutions directly impacting the development of e-commerce have not finished challenging legislators and jurisdictions. We are thinking in particular of the development of artificial intelligence which will allow to increase the personalization of the interactions with the customers, or the implementation of the semantic web known as “web 3.0” still little known by the general public whereas it promises to transform the web into a gigantic base of knowledge and will certainly create new problems in terms of management of security and confidentiality.

Our team is at your disposal to advise you and provide you with legal support on all issues related to online sales.

Catherine Robin, Partner – Johanna Guerrero, Lawyer – Distribution, competition and contract law

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[1] « Chiffres clés du e-commerce 2022 » report published by the French Fédération E-commerce et Vente à distance (FEVAD)

[2] « Les entreprises en France – Insee Références – Edition 2022 » report published by the French Institut national de la Statistique et des Études Économiques (INSEE)

[3] « Les entreprises en France – Insee Référence – Edition 2022 » report published by the French INSEE

[4] Directive 2000/31/EC of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (“Directive on electronic commerce”)

[5] Law n°2004-575, 21 June 2004 « pour la confiance dans l’économie numérique »

[6] Commission Regulation (EU) 2022/720 of 10 May 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreement and concerted practices

[7] CA Paris, 21 June 2017, RG n°15/18784

[8] CA Paris, 2 September 2019

[9] Law n°2016-1321, 7 October 2016 « pour une République numérique »

[10] Regulation (EU) 2019/1150  of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services

[11] Regulation (EU) 2022/2065 of 19 October 2022 on a Single Market for Digital Services and amending Directive 2000/31/EC

[12] Regulation (EU) 2022/1925 of 14 September 2022 on contestable and fair market in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1228

1.- What is a Blocking Statute

The French Blocking Statute (“Loi de Blocage”, Statute n° 68-678 of July 26, 1968, modified by the Statute n° 80-538 of July 16, 1980) prohibits the disclosure of sensitive economic, commercial, industrial, financial, or technical information by French natural and legal persons to foreign authorities or its use in foreign judicial or administrative proceedings[1], issued outside the framework of international mutual legal assistance schemes[2].

Initially adopted in reaction to American discovery rules (subpoenas, production orders, disclosure requirements, etc.) on French territory for use in U.S. proceedings, the French Blocking Statute has only been enforced once by the French Supreme Court (“Cour de cassation”), resulting in a EUR 10,000 fine[3]. As a result, foreign authorities – mainly American courts – consider that the statute is not a valid reason to not comply with discovery or pre-discovery requirements[4].

Ten years after this enforcement by the Supreme Court, the French Anti-Corruption Agency (“Agence française anticorruption”, “AFA”) was created by the so-called “Sapin II” Law, reenforcing anti-bribery regulations and empowering the AFA with the monitoring of the Blocking Statute[5]. In the same year, the European General Data Protection Regulation (“GDPR”) was adopted[6]. Article 48 of the GDPR prohibits transfer of personal data to any non-EU court, tribunal or administrative authority which is not based on a valid international agreement, such as a mutual legal assistance treaty.

The French Agency for Strategic Intelligence and Economic Security (“SISSE”), created in 2016 and attached to the Directorate General for Enterprise (department of Economy), oversees France’s economic security policy. It coordinates the protection from foreign threats of technologies and companies. The SISSE works closely with other ministries, agencies (including intelligence agencies) and independent authorities to unify the national response.

Faced with increasing demands, mainly from the U.S. (such as Alstom (2014), Société Générale (2018) or Airbus (2020) cases), French companies were asking for a real “weaponization” of the legislation to protect themselves from extraterritorial procedures.

Since April 1, 2022, the SISSE assists French companies receiving discovery demands or requests from foreign authorities to disclose sensitive and strategic information[7].

2.- From a Neglected Text to an Efficient Application?

To determine whether a foreign laws bars U.S. discovery, American Courts analyze several factors.

The five first factors are: (i) the importance to the litigation of the documents or other information requested, (ii) the degree of specificity of the request, (iii) the country of origin of the information, (iv) the availability of alternative means of securing the information, and (v) the extent to which noncompliance would undermine US or the State of the information’s interests[8].

Two other factors shall be considered: (i) the hardship that compliance would impose on the party or witness from whom discovery is sought and (ii) the good faith of the party resisting discovery[9].

Recently, in Kashef v. BNP Paribas SA[10], the U.S. District Court for the Southern District of New York analyzed the seven above-mentioned factor, as BNP Paribas invoked the French Blocking Statute to rebut plaintiff’s motion to compel several documents.

In this case, victims of the Sudanese genocide alleged that BNP Paribas effectively facilitated the genocide by processing financial transactions on behalf of Sudanese entities, in violation of U.S. sanctions. In 2014, BNP Paribas pled guilty to the violations of sanctions. The civil case was brought in 2016, with plaintiffs seeking recovery for damages.

Several discovery disputes arose between the parties, including the de-pseudonymization of French and Swiss documents. BNP Paribas stated that the pseudonyms were necessary to remain in compliance with French and European laws – French Bank Secrecy law, French Evidence law and the GDPR.

The Court noted in its decision that “the French blocking statute places limits on the taking of foreign discovery in France” and that the GDPR “requires further consideration of necessity”, placing a “further analytical requirement on the production of data that is not contemplated in the U.S. discovery regime”.

Analyzing the seven factors, the Court explained that “Plaintiffs are, in effect, asking the Defendants to break the laws of the countries in which they operate. While both sides concede that prosecutions in this area have been all-but-nonexistent, the laws still exist and Defendants and the producing entities could expose themselves to potential liability, however slight [which] represents a hardship to Defendants”. The Defendants also acted in good faith in resisting discovery. The Court finally indicated that alternative means for obtaining the information sought was available through the Hague Convention.

Consequently, the Court denied the Motion to Compel the production of several de-pseudonymized documents.

This recent application and recognition of the French Blocking Statute in U.S. Courts has important potential implications. This decision demonstrates that it is possible for French natural and legal persons to oppose the disclosure of sensitive information sought by foreign authorities outside the framework of international mutual legal assistance schemes.

3.- Looking Forward

As both international mutual legal assistance schemes and discovery procedures are time consuming, and do not always produce the results sought, it is possible to envisage few possibilities for entities and institutions to share some sensitive information outside the judicial framework.

The first possibility would be cooperation agreements between governmental authorities. As an example, the French Financial Markets Authority (“Autorité des Marchés Financiers”, “AMF”), and the French Prudential Control and Resolution Authority (“Autorité de Contrôle Prudentiel et de Résolution”, “ACPR”) signed two cooperation agreements with the Securities Exchange Commission (“SEC”) in 2021 in order to allow French entities to register as Security Based Swap Dealers with the SEC and to benefit from a substituted compliance regime[11].

Agreements of this nature, governed by article 50 of the GDPR, would allow, within a specific and established framework, sharing some sensitive information between authorities and entities. We can imagine agreements with export control and dual-use goods departments, banking governmental bodies, or cybersecurity agencies.

Moreover, some French and European companies, may start to take into account the burdens of producing information or denying such production and adapt/amend their internal rules, including Binding Corporate Rules (“BCR”) as provided by article 47 of the GDPR, to manage the relations of the company with other companies or authorities. BCRs are to be established by the production and internal diffusion of procedures and manuals, including rules to be followed by the employees of the company. Documents of this nature are already, and in certain circumstances, mandatory for certain companies, in accordance with both the GDPR and the various EU Member States’ anti-bribery regulations.

The establishment of internal procedures and processes may be taken into account by the U.S. Department of Justice in case of sentencing. The Evaluation of Corporate Compliance Programs states that “the United States Sentencing Guidelines advise that consideration be given to whether the corporation had in place at the time of the misconduct an effective compliance program for purposes of calculating the appropriate organizational criminal fine”[12].

In any case, internal compliance programs would demonstrate good faith in the defendant company, if it is invoking the French Blocking Statute before U.S. courts.

Frédéric Saffroy, Partner & Alice Bastien, Associate.

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[1]               Article 1 bis of the Blocking Statute.

[2]               For example, the Hague Convention of March 18, 1970, on the Taking of Evidence Abroad in Civil or Commercial Matters, providing a specific framework for the cross-border communication of evidence, through a letter of request sent by a court in the requesting State, and the Mutual Legal Assistance Treaty of December 10, 1998 between France and the United States.

[3]               Criminal chamber, Cour de cassation, n° 07-83.227, December 12, 2007, in the “Executive Life” case.

[4]               Société Nationale Industrielle Aérospatiale v. U.S. District Court for the Southern District of Iowa, 482 U.S. 522 (1987)

[5]               Law n°2016-1691 of 9 December 2016

[6]               Regulation (EU) 2016/679 of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data

[7]               Decree n° 2022-207 of February 18, 2022.

[8]               Société Nationale Industrielle Aérospatiale v. U.S. District Court for the Southern District of Iowa, 482 U.S. 522 (1987)

[9]               First Am. Corp. v. Price Waterhouse LLP, 154 F. 3d 16 (2d Cir. 1998)

[10]              Kashef v. BNP Paribas SA, 16 CV 3228 AKH-JW filed on 05/23/2022

[11]              Memorandum of Understanding, Concerning Consultation, Cooperation and the Exchange of Information Related to the Supervision and Oversight of Certain Cross-Border Over-the-Counter Derivatives Entities In Connection with the Use of Substituted Compliance by Such Entities, July 23, 2021

[12]              U.S. Department of Justice, Criminal Division, Evaluation of Corporate Compliance Programs, updated June 2020

Looking back over the past twenty years, one cannot deny that labour and employment law is a constantly evolving and dynamic field of law.

A retrospective observation enables us to identify, for illustrative purposes, the main examples of the most striking developments in these fields of law.

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Working time – Solutions to meet your needs

• How many hours can your employees work before paying their over hours? Before the Aubry laws of 1998 and 2002, the legal working time was fixed at 39 hours per week.

• As of 1^st January 2000, for companies with more than 20 employees and 1^st January 2002 for the remaining companies, the legal working time was lowered to 35 hours per week.

• A number of arrangements for the calculation of working time have been introduced progressively, including the organization of working time based on a yearly number of worked days, created in 2000.

Remote work and right to disconnect – The future has been here all along

• Have your employees got used to remote working? Such a dispositive was initially governed by a national interprofessional agreement dated 2005, which only concerned regular remote working.

• The evolution of lifestyles led the legislator to consecrate in 2016, the employee’s right to disconnect, allowing them to achieve a better work-life balance, and to regularise and increase in 2017 the flexibility of the rules both on regular and occasional remote working. 

Internal investigation into harassment – Always dreamed of being a detective?

• How to avoid sexual and moral harassment? When a moral or sexual harassment situation is identified, there is in principle no obligation for the employer to hold an internal investigation.

• It is however recommended to proceed as such, and the French Supreme Court case law established some guidelines into good practices in 2022:
• An internal investigation cannot be simply dismissed because the employer only interviewed the employees who raised the complaint.
• It is not mandatory to hear the alleged harasser, confront them with the plaintiff employees or give them access to file and documents collected during the investigation.
• The employer is not obliged to involve the staff representatives in the internal investigation.

The increased protection of whistle-blowers – When good faith brings you protection

• How to react when facing a whistleblowing situation? Protection for whistle-blowers was introduced in 2013 and reinforced by a second law in 2016.

• A recent law of 2022 further strengthens the guarantees offered to whistle-blowers and requires, since 1^st September 2022, to include the existence of the whistle-blower’s protection system in the internal regulations (“Règlement intérieur”).

The non-compete clause – An effective protection of a company’s interests necessary implies money!

• Protect the company from competition is unfortunately not free! Since 2002, case law raised the financial counterpart of a non-compete clause as a mandatory condition. Otherwise, it will be null and void.

The termination of employment contracts – Many changes over the last twenty years:

• Looking for a fast and amicable way to terminate an employment contract? Since 2008, French labor law provides a new way to terminate the working relation with the mutual termination agreement (“rupture conventionnelle individuelle”). It is an autonomous form of employment termination where an employer and employee mutually agree to end the relation.

• Such a termination is also possible when various employees are involved at the same time: in 2017, the collective mutual termination agreement (“rupture conventionnelle collective”) was implemented.

• Facing economic difficulties in your company? In 2016, the legislator did not only complete the list of economic grounds that may justify a redundancy by considering those already accepted as such by the case law (the need to safeguard competitiveness and the cessation of activity) but has also clarified the notion of economic difficulties itself.

• Worried about reclassifying one of your employees in your premises abroad in case of economic redundancy or physical incapacity? Since 2017, the scope of reclassification is restricted to the sole national territory.

• Be careful, as an employee could be dismissed for a job abandonment, there is now a presumption of resignation since 2022, which is subject to a specific regime. The dismissal’s regime would not be automatically applied then!

The consequences of an abusive dismissal – Having more visibility on the cost of a litigation is therefore possible!

• Do you want to estimate the cost of a dismissal’s challenge from one of your employees? Before 2017, an employee who suffered an abusive dismissal was eligible to be granted a minimal amount of six month’s salary as damages, with no maximum amount foreseen, since that date, such damages are capped according to the size of the company and the seniority of the employee (the Macron scale). However, such a scale may be excluded in some cases.

The expansion of topics open to the negotiation of company agreements – The end of a monopoly

• You wish to adapt the conventional rules to your company? Before 2017, the hierarchy of regulations in French law provided for the primacy of agreements concluded at the branch of activity level (collective bargaining agreements).

• Since 2017, by principle, company agreements provisions prevail over the ones of the collective bargaining agreements.
  This rule however suffers two exceptions:
  • The collective bargaining agreement’s provisions still prevail on some specific topics (minimum wages, trial period, etc.).
  • The collective bargaining agreement may prohibit company level agreements from containing different stipulations (occupational risks, disabled workers, etc.).

Environmental, Economic and Social database – Give green a chance

• Environmental issues have made their appearance in companies. An Economic and Social Database was incorporated into the Labour Code by a 2013 law and gathers all the information communicated to the staff representatives to enable them to perform their consultative missions.

• The content of this database has been progressively extended by laws that came into force in 2015 and later in 2017.

• In 2022, a new environmental topic was integrated into the database, which then became the Environmental, Economic and Social Database and must include a new theme entitled “environmental consequences of the company’s activity”, enabling the staff representatives to be consulted in this subject, as part of the recurrent information and consultations.

* * *

It appears very clearly that employment and labour law has evolved tremendously over the past 20 years.

These constant changes show no sign of decreasing, leading us to believe that the next 20 years we will also witness major developments.

Alerion Avocats will be here at all times to guide and support you through every new development that may come your way, as it has for the last 20 years.

Jean-Christophe Brun, Partner, Anaïs Edet, and Anne-Sophie Houbart, Associates.

The aim of social and environmental performance confronted with economic performance

Far from being an oxymoron, this title exposes two aims, one of which has tended to take place at the expense of the other or, at best, one before the other.

Even if it is true that a company with more wealth will always be in a better position to share it with its employees than the reverse, it is still true that it would hardly be rational to require a CEO to take care of the environmental impact of his company’s activities before its economic performance.

Back to the past

Once we look past this cliché, the fact remains that this has always been emphasised when adopting major international standards in labor law.

The International Labor Organization was built around a double postulate:

• Social progress should be subject to state action in order to adopt specific labor law standards (international conventions, recommendations, etc.);
• But taking into account the fact that this action in favor of social progress should be left to the voluntary intervention of States through the ratification of conventions by each country benefiting from sufficient economic progress to have the means to achieve it.

To date, no economic integration or free trade treaty has provided common social standards; the objective has only been to seek a convergence of standards.

At European level, the harmonization of social standards is carried out according to two processes:

• either by the European regulation which is integrated directly into the legal framework of each Member State and is the subject of an exclusive interpretation by the Court of Justice of the EU;
• or by the directive which, to be applicable, must be transposed into domestic law, under the control of the Court which verifies the quality of the transposition.

This harmonization process is carried out through the adoption of common minimum standards contributing to the creation of a common basis for the protection of employees.

The objective is also to fight against social dumping based on the reduction of costs linked to weak protection of the health and safety of employees within the Union and thus avoid distortions of competition.

Back to the future

The exponential development of CSR for the last fifteen years is intended to respond to this challenge: faced with the inability of States to establish new coercive social standards, companies have designed their own self-regulation standards considered as ‘soft law’.

Whatever one’s opinion of these debatable standards, their transnational application, for example via codes of conduct or other ethical charters, has made it possible to introduce new guarantees in countries where social protection rules are not provided by local legislation.

The normative value of CSR commitments as a real issue

The central question remains the binding value of the commitment made in terms of CSR by the company and its responsibility in this regard.

• The prerequisite of integration and compliance with domestic legislation

To be both socially and legally relevant, these commitments must first and foremost integrate local regulations as a fundamental starting point; the voluntary standards that the company imposes on itself must be integrated into the national or international legal order and therefore respect the local  legal order in.

• The need for transparency

To date, no certification appears to have the legitimate authority to declare a particular company globally, socially and environmentally responsible.

Thus, the very nature of the standard to which the company agrees to submit via a charter, a label or a specific certification resulted from a selective choice, which relativized its scope as a global standard.

However, only the implementation of a global assessment and reporting process allows effective control of the sustainable commitments made on a qualitative and quantitative level.

Also, the very title of the new European Directive of December 16, 2022 (Corporate Sustainability Reporting Directive) is far from insignificant: such a commitment made according to the selective goodwill of the company will no longer be enough to become virtuous; a real impact analysis of the company’s activities will have to be carried out, which will be accompanied by reporting whose nature is no longer only declarative but will lead to concrete achievements.

In conclusion, if many agree to maintain that the commitments made by companies in terms of sustainability are vectors of growth, employers will still have to learn to manage these new constraints inducing the implementation of evaluation processes and reporting allowing the effective qualitative and quantitative control of their commitments with their economic performance objectives.

Jacques Perotto, Partner and Maxime Hermes, Associate

CORPORATE SUSTAINABILITY REPORTING DIRECTIVE

The climate emergency, and the raising of awareness by the authorities on the paramount necessity for strong corrective actions at the State and corporate levels, have contributed to a political consensus at the EU level, which resulted in this European Directive, December 16, 2022.

It came into force on 5 January 2023; members have until July 6, 2024 to transpose it into national law.

We have taken this occasion to launch the publication of our chronicles on the topic of CSR in companies confronted with sustainability issues.

Why this new Directive?

The EU ultimately wishes to bring the level of information on sustainability, to the same level as financial information, to contribute to its objective of climate neutrality in 2050.

In this regard, the CSRD extends the ambitions of the previous NFRD directive of 2014: with more companies falling into its scope, and more detailed reporting obligations.

Who is impacted?

CSRD applies to the following companies:

• All big companies, including companies outside the EU listed on the European market, and not-listed companies, meeting two out of the three following criteria:

i.    250 employees

ii.   40M€ net of net turnover

iii.  20M€ total balance sheet

All parent companies of a big group fall within the scope of CSRD.

• Small and medium size companies listed on the European market and meeting two out of the three following criteria:

i.    Between 10 and 250 employees

ii.   Net turnover between 700K€ and 40M€

iii.  Total balance sheet between 350K€ and 20M€

• Non-EU companies generating at least 150M€ of net turnover within the EU with a branch or subsidiary (big companies or small and medium size listed companies).

Not-listed companies and listed small and medium size companies (including subsidiaries of non-EU groups) are exempt from  publishing a sustainability report at their level if they belong to a group publishing a consolidated report compliant with CSRD.

Which information to report?

In a nutshell, the report shall mention information which allows a clear understanding of the interactions between the activity and sustainability:

• How the company’s activities impact sustainability matters;

• How the sustainability may impact the growth of the company, its performance, and its position compared to its competitors.

The company will support its report by:

• Identifying the main negative impacts – current or potential – generated by the company’s activities and its value chain;
• Providing a reminder of the commitments taken and the actions performed on sustainability;
• Describing the main risks for the company in relation to sustainability matters and the way these risks are managed.

This is not so different from the process applicable under French law to fight occupational risks in the workplace: the construction of the health and safety risk assessment leads to identifying the risks for employees generated by the company’s activities, as well as actions to be taken to eliminate the risks, or mitigate their occurrence and the consequences.

To be followed…

Jacques Perotto, Partner and Maxime Hermes, Associate

Cass. 1^st Civil Chamber, 28 September 2022, No. 20-20.260, Kabab-Ji v. Kout Food Group

Ten years after the Dallah v. Pakistan case, French and English courts once again rendered opposite decisions on the determination of the rules governing the application of an arbitration agreement to a non-signatory.

In 2021, the United Kingdom Supreme Court declined to recognize and enforce an award which extended the arbitration agreement to a non-signatory third party, on the ground that such an extension was not allowed under English law, the governing law of the contract.

By contrast, in a much-commented decision dated 28 September 2022, the Cour de cassation (French Supreme Civil Court) upheld the same award, considering that before French courts, the validity and effects of the arbitration agreement were not governed by English law but by French substantive rules (règles matérielles).

These opposite decisions illustrate a profound difference in the French and English conceptions of the autonomy of the arbitration agreement. More generally, it could be an incentive for practitioners anticipating enforcement in several jurisdictions, to specify in the contract which law is applicable to the validity and effects of the arbitration agreement. 

Background

In 2001, the Lebanese company Kabab-Ji SAL (hereafter, “Kabab-Ji”) entered into a ten-year franchise agreement with the Kuwaiti company Al-Homaizi Foodstuff Co. (hereafter, “AHFC”) for the exploitation of Kabab-Ji’s restaurant brand in Kuwait. The franchise agreement and subsequent agreements contained governing law clauses providing for English law, and arbitration agreements providing for International Chamber of Commerce (ICC) arbitration seated in Paris.

In 2005, Kout Food Group (“Kout Food”) became the holding company of the AHFC group. Kout Food did not become a signatory party to the agreements but took part in its performance.

In 2011, the parties failed to renew their agreements which expired.

Arbitration proceedings seated in Paris

In 2015, Kabab-Ji commenced arbitration proceedings in Paris against Kout Food, claiming damages for breach of the agreements and unauthorized appropriation of know-how.

Kout Food challenged both the jurisdiction of the arbitral tribunal and the merits of Kabab-Ji claims, on the ground that it was not a signatory party to the agreements.

In 2017, by majority decision, the arbitral tribunal:

• held that it had jurisdiction considering that under French law, the law of the seat of the arbitration, Kout Food was a party to the arbitration agreement;
• found that Kout Food was bound by the agreements, held Kout Food liable for their breach and awarded Kabab-Ji USD 7 million in damages and legal costs.

Interestingly, the only English-qualified lawyer member of the arbitral tribunal issued a dissenting opinion, considering that the strict wording of the agreements precluded Koot Food from becoming a party to the agreements.

This award gave rise to parallel state court proceedings on both sides of the Channel: Kabab-Ji filed an application for an enforcement order before English courts and Kout Food filed an application to set aside the arbitral award before French courts.

U.K. courts refused to recognize and enforce the award

In 2018, Kabab-Ji obtained an ex parte order allowing the enforcement of the award in the United Kingdom. Kout Food appealed this order. On 27 October 2021, the United Kingdom Supreme Court ruled in favor of Kout Food.

The Supreme Court first considered which law applied to the issue at stake and decided that the answer would be found in the law governing the arbitration agreement rather than the law of the seat of arbitration. In the absence of a specific choice of law to govern the arbitration agreement, the Court considered that the parties’ choice of law to govern the contract (lex contractus) also applied to the arbitration agreement (see previously Enka v. Chubb case, schematically resorting to the law of the seat only if there is no other express choice of law). The parties had chosen English law to govern the agreements and therefore, the Court applied English law to determine the scope of the arbitration agreement.

Then, the Supreme Court held that Kout Food was not a party to the arbitration agreement under English law. The terms of the agreements provided that any modification had to be in writing, and the Court found that there was no evidence of such a written agreement of Kout Food.

The Supreme Court concluded that the arbitral tribunal lacked jurisdiction and refused recognition and enforcement to the arbitral award in the United Kingdom.

French courts dismissed the application to set aside the award

In parallel, in 2017, Kout Food filed an application to set aside the award before the Paris Court of Appeal, mainly for lack of jurisdiction of the arbitral tribunal. On 23 June 2020, the Court of Appeal upheld the arbitral tribunal’s jurisdiction and dismissed Kout Food’s application.

Firstly, the Court of Appeal did not seek to determine a law which would govern the arbitration agreement, but instead applied the well-established French substantive rule under which, as a result of the autonomy of the arbitration agreement from the contract containing it, the existence, validity and effects of the arbitration agreement are determined without any reference to a domestic law but exclusively by reference to the common will of the parties, subject to mandatory rules of French law and international public policy (see Dalico v. Khoms et El Mergeb case).

In the case at hand, the specific provisions contained in the agreements did not reflect, according to the Court, an express designation of English law to govern the arbitration agreement. Therefore, French substantive rules applied.

Secondly, the Court of Appeal recalled the French substantive rule allowing the extension of arbitration agreements to non-signatory parties which directly participated to the performance of the contract and the resulting disputes (see ABS case), “as long as their contractual situation and activities justify the presumption that they accepted the arbitration agreement, the existence and scope of which they were aware”.

The Court found that Kout Food had participated in the performance of the main agreement, notably by taking part in the exploitation of Kabab-Ji’s restaurant brand in Kuwait and paying invoices addressed to AHFC, and concluded that Kout Food had become a party to the arbitration agreement.

Kout Food challenged this decision before the Cour de cassation.

On 28 September 2022, the Cour de cassation confirmed the Court of Appeal’s decision, endorsing the Cour of Appeal’s position and adding that if parties wish to apply a specific domestic law to the arbitration agreement, they must expressly provide for it.

Comments

The outcome of this matter before French and British courts calls for several comments.

Firstly, after these conflicting decisions on both sides of the Channel, Kabab-Ji is now confronted to a race to enforce the award around the world.

Secondly, both courts agree that parties can choose the law applicable to the arbitration agreement. The case at hand shows that this choice has consequences, notably when determining the parties bound by such agreement. However, in the absence of an express provision designing the law applicable to the validity and effects of the arbitration agreement, French courts apply their substantive rules while British courts principally apply the law chosen by the parties to govern the main contract, or failing such a choice, the law of the seat.

Finally, by contrast to the Dallah case where British courts applied French law but reached a decision opposite to that of the French courts, in this case, each court applied its own rules. It would be interesting to know what the position of the French courts would be if they were to apply English law to the existence and the validity of an arbitration agreement.

In any event, parties choosing arbitration in Paris, or anticipating enforcement of a future award in France, must be aware that French courts always review the arbitration tribunal’s jurisdiction under French substantive rules, unless otherwise expressly provided. In the latter case, the given provision would have to clearly designate the law governing “the arbitration agreement.” The designation of a law to govern the “arbitration” would not be considered specific enough to override the applicability of the substantive rules of French law (see Pharaon case).

Jacques Bouyssou, Partner, Marie-Hélène Bartoli Vallet, Counsel, and Juan Diego Niño–Vargas, Associate.

If the first “blockchain” was conceptualized by Satoshi Nakamoto in 2008, NFTs, “non-fungible tokens”, have been successful since 2017, thanks to cryptokitties. From now on, these new technologies are at the heart of Web 3.0 and trademark registration has become one of the main issues.

The various Offices, and in particular the French National Institute of Intellectual Property (INPI) and the European Intellectual Property Office (EUIPO), are receiving more and more trademark applications concerning these new technologies and are confronted with very often imprecise wording. However, Article R.712-3-1 of the French Intellectual Property Code states that “The goods and services shall be designated with sufficient clarity and precision to enable any person to determine, on this basis alone, the extent of the protection.”. It is clear that it is difficult for all the actors involved (applicants, lawyers, legal advisers in industrial property, legal experts, etc.) to draft sufficiently clear, precise, and adequate wording to cover these new products and services rigorously.

In this respect, on June 23, 2022, the EUIPO came to provide its first clarifications (Virtual goods, non-fungible tokens and the metaverse). The EUIPO confirms that virtual goods fall under class 9. On the other hand, the term “virtual goods” is imprecise and will have to be refused by the different Offices. Therefore, the EUIPO states that it is necessary to specify the content to which the virtual goods relate “for example: downloadable virtual goods, namely, virtual clothes“. Furthermore, the EUIPO indicates that the next version of the Nice Classification will include, in Class 9, the wording “downloadable digital files authenticated by non-fungible tokens“, considering the use of the term “non-fungible tokens” alone unacceptable.

The INPI, on November 15, 2022, aligned itself with the recommendations of the EUIPO and proposed different examples of wording. Thus, in the future, “digital content, i.e., downloadable digital files authenticated by non-fungible tokens [NFT] containing toys and graphic designs to be collected“, as well as “downloadable image files containing works of art authenticated by non-fungible tokens [NFT]“, in class 9, but also “services for the authentication of intangible goods by means of blockchain technology [blockchain]” in class 42[1].

In general, these new technologies in Web 3.0 will essentially be integrated into classes 9, 35, 38, 41 and 42.

From now on, it is up to professionals to adapt to their clients’ requests while making their best efforts to reconcile these new trademark filings with the requirements of the Offices.

[1] A. Drappier, C. Neveu, L.Zambito-Marsala, trademark legal experts, K.Bounif, Head of the Trademark pole, at the Department of Trademarks, Designs and Models of the INPI, « Designation of goods and services in the context of trademark applications relating to NFTs, metavers and digital assets », PIBD 1 1912-II-1, November 15, 2022

Alerion’s lawyers in the IP/IT/Privacy Department can assist their clients in all matters related to intellectual property and in particular in determining strategies for Web 3.0 related trademark registrations.

Corinne Thiérache, Partner Lawyer, and Océane Desplands, Master II Intellectual Property and New Technologies (UGA)

Keep it in mind #2: Update your company’s risk assessment document

Employers are required to assess the occupational risks and to implement prevention activities, working methods and production to mitigate them.

The results of this assessment are recorded in a document available to the employees, the occupational physician, the Labor Inspector and the staff representatives.

This document must be updated every year.

Failure to establish or to update such document is punishable by a fine of up to € 7,500.

Case law: Working time arrangement in days over the year does not grant total freedom to set working hours

Employees with a certain level of autonomy may be subject to a working time arrangement in days over the year, in which cases they benefit from a certain degree of independence to organize their working time.

This doesn’t mean a total freedom, without consideration of professional obligations, as recently ruled by the French supreme court: constraint related to the organisation of the work by the employer (such as meetings for example) shall be taken into consideration.

French Supreme Court – 22nd February 2022, n°20-15.744

New regulation on whistle blowing

Since 1^st September, the whistleblowers status has been modified:

• The definition is wider, and more situations are covered;
• The whistleblower has now an immediate choice between internal and external (administration bodies) channels of diffusion;
• Protection has been enhanced: no civil liability, extension of the scope of the lack of criminal responsibility, no possible retaliation for the associations and Trade unions helping the whistleblower;
• The company’s internal policy shall remind the existence of a protective status for whistleblowers.

Do not hesitate to reach out on the multiple features of this status.

Law 2022-421, 21^st March 2022

Article: Guidelines on internal investigation about harassment

Anne-Sophie Houbart introduces a few recommendations on how to handle an investigation, in light of the most recent cases law of the French Supreme Court.

Case law: dismissal of an ill employee

Dismissing an ill employee in consideration of illness is discriminatory and therefore void.

By exception, an employee may be dismissed if:

• her/his continued or successive sick leaves disrupts the functioning of the company;

• there is no satisfying temporary solution to manage the situation;

• the employee is permanently replaced shortly after her/his dismissal.

These conditions are very strictly appreciated: the Supreme Court recently confirmed that the disruption of a service/unit is insufficient: the employer shall demonstrate and mention the disruption of the whole company.

French Supreme Court, 6 July 2022, n°21-10.621

Case law: content of the dismissal letter

Since 2017, the employee may request clarification on the grounds of the dismissal letter within 15 days of the dismissal. It was not yet clear whether the employer must inform the employee of this possibility or not.

The French supreme court ruled that it is not mandatory for the employer to mention such opportunity, which may therefore be removed from the templates.

French Supreme Court – 29th June 2022 – n°20-22.220

Jacques Perotto, Partner, Maxime Hermes, Anne-Sophie Houbart, Eloïse Ramos, Associates.

Facing facts possibly qualifying as moral or sexual harassment, the employer is required to react, under the risk of failing its obligation to prevent occupational risks.

When such a situation is identified, an internal investigation, which unveils the reality, nature and extent of the facts reported, is in practice one the first measures to be taken.

There is no legal obligation to hold an internal investigation, except if a right of alert is triggered by at least one member of the Works council (“CSE”); although:

• A national Collective bargaining agreement (“ANI”) of 2010 recommends the implementation of an appropriate procedure to identify, understand and address harassment and violence in the workplace;

• Moreover, pursuant to the case law of the Supreme Court (“Cour de cassation”) the absence of an internal investigation after the disclosure of harassment may constitute a violation of the employer’s obligation to prevent occupational risks (Cass. Soc., 29 June 2011, n°09-70.902). 

In this regard, the lack of a reaction of an HR Manager informed of a harassment situation may be regarded as a misconduct and may lead to a disciplinary sanction, up to a dismissal (Cass. Soc., 8 March 2017, n°15-24.406).

On the other hand, the practical approach of the investigation is up to the employer: although good practices can be identified[1], the Supreme Court accepts the result of the investigation as valid evidence, even when such good practices are not strictly applied.

This article reminds some of these practices at the light of recent case law.

1. The scope of the interviews to be conducted during an internal investigation

The first question is about the framework of the investigation: should a systematic approach be adopted by interviewing all employees likely to have witnessed acts of harassment?

In a decision of 29 June 2022, the Supreme Court reminds the role of the judge in assessing the value as evidence of the internal investigation (Cass. Soc., 29 June 2022, n°21-11.437).

In a case where the employer only interviewed the employees who complained about the harassment, the Court deemed that judges can neither simply dismiss the internal investigation report nor refuse to examine the other elements of proof communicated by the parties.

Our recommendation consists of hearing, in the framework of an internal investigation:

• Direct witnesses (declared or in frequent contact with the victims and potential harassers);

• Employees who have complained of harassment.

On the other hand, employees who do not belong to this “first circle” should be interviewed at a later stage, if it is relevant to the investigation (was this employee mentioned during the other interviews? Will he or she male it possible to confirm a statement? Will he or she bring something new to the investigation?).

Depending on the circumstances of the case, this allows to adapt the investigation to the nature and seriousness of the facts brought to the company’s attention, to bring balance between serious information gathering and counterproductive comprehensiveness:

• Too extensive, the investigation may generate a miscommunication about the incident by bringing too many employees into its scope, when such a situation requires to act swiftly and discreetly.

• Excessively limited, the investigation may give rise to criticism, or event to its results being questioned.

2. The absence of an obligation to hear the alleged harasser 

In a decision of 29 June 2022, the Supreme Court specified that it was not mandatory, during an internal investigation:

• To hear the alleged harasser;

• To confront him or her with the plaintiff employees;

• To give him or her access to the file and documents collected during the investigation.

The rights of the defence are not disregarded, insofar as the employee can provide explanations during the pre-dismissal interview, if applicable, or during legal proceedings (Cass. Soc., 29 June 2022, n°20-22.220).

The internal investigation carried out by the employer without the accused employee’s version is therefore admissible evidence.

However, avoiding confrontation may look shady to the judges.

Our recommendation is to systematically include the accused employee in the interviews conducted as part of the internal investigation in order to demonstrate impartiality and to obtain a complete view of the facts, enabling the most appropriate decision to be taken at the end of the investigation.

3. The staff representative (“CSE”) does not have to be involved in the internal investigation

Except for the exercise of their right to alert[2], the employer is not obliged to involve the “CSE” in the internal investigation.

This is the solution adopted by the Supreme Court in a case where the unloyalty of an investigation that revealed moral harassment, conducted by the HR Department without including the staff representatives, was raised (Cass. Soc., 1 June 2022, n°20-22.058).

However, in order to avoid the risk of bias in the analysis, our recommendation is to involve the “CSE” members in the internal investigation, but to make sure they don’t take the lead: the conduct of the investigation is first of all the employer’s responsibility.

The harassment referent in the “CSE” is then the preferred point of contact.

Furthermore, when facing a tricky cases, it is advisable to entrust the lead of the investigation to an external consultant.

These three decisions illustrate the pragmatic approach of the Supreme Court, which unreservedly accepts the results of investigations which, in certain cases, may have seemed insufficiently serious.

However, the internal investigation remains a delicate exercise that requires to be framed and conducted with sufficient objectivity and discernment.

Otherwise, and even if it constitutes an admissible form of evidence, its strength as evidence is likely to be reduced.

[1] See for example the guide against sexual harassment: https://travail-emploi.gouv.fr/IMG/pdf/30645_dicom_-_guide_contre_harce_lement_sexuel_val_v4_bd_ok-2.pdf

[2] Article L.2312-59 of the Labour Code

Jacques Perotto, Partner, and Anne-Sophie Houbart, Associate.