We had already addressed, as part of a article relating to non-solicitation clauses, the risk, for the subcontractor, of seeing some of its most qualified employees be poached by certain customers or contractors wishing to hire already trained and competent talents in order to internalize these skills.
However, the subcontracting relationship is also not without risk for the client, who may legitimately fear that his subcontractor will offer his services directly to his customers or even to the competition by taking advantage of his situation or the information collected under the subcontracting contract. This is all the more problematic when the subcontractor has access to certain confidential information or to specific know-how since he may be tempted to use this information to his advantage in order to obtain new markets, including from competitors of the original contractor.
In order to limit risks as much as possible, it is therefore imperative for the client to include a non-competition clause in the commercial contract (1°/) as well as a confidentiality clause (2°/). For its part, the exclusivity clause should be used sparingly (3°/).
1°/ The non-competition clause in commercial contracts
It aims to prohibit the service provider from working with the client of the client, both during the execution of the service, but also at the end of the mission.
a) To be valid, the non-competition clause must be limited in time and space and be proportionate to the legitimate interests of the company (Cass. Com. July 1, 2003, No. 02-11381). In fact, the Court of Cassation strictly assesses the validity of non-competition clauses and does not hesitate to dismiss clauses written too broadly in the name of the parties' commercial freedom (Cass. Com. December 13, 2011, No. 10-21653).
No legal provision defines the maximum duration of a non-competition clause and this assessment is made on a case-by-case basis. Thus, by way of illustration, the Court of Cassation accepted the validity of a non-competition clause prohibiting a subcontractor from working for clients of the client (PSA Peugeot-Citroën and Renault groups) for a period of 4 years from the end of the contract (Cass. Com. September 10, 2013, No. 12-20933).
b) The non-competition clause must also be drafted in a sufficiently precise manner. Model clauses are therefore to be avoided. and, in order to best ensure the effectiveness of the clause, it is essential to draft a text adapted to the specificities of the subcontracted service. In all cases, it is imperative to ensure that the clause is not too extensive to the point of disproportionately impairing the provider's freedom of work.
c) Finally, The existence of a financial counterparty is not, for the time being, considered a condition of validity in the context of commercial contracts by the Court of Cassation, contrary to what is provided for in terms of labour law (Cass. Com. February 10, 2015, No. 13-25667 ; Cass. Com. October 8, 2013, No. 12-25984).
2°/ The confidentiality clause
The confidentiality clause is the one by which the parties undertake to keep confidential the information to which they have access in the context of the execution of the service but also in the negotiation of the contract: in general, this is all sensitive data that the client communicates to the subcontractor (identity of the suppliers and customers of the contractor, identity of the suppliers and customers of the ordering party, purchase prices, particular technologies and know-how, etc.)
Particular attention must be paid to the period preceding the signing of the finalized contract since during the discussions, the contractor will necessarily be required to communicate certain confidential information to the subcontractor, without a subcontracting contract including a confidentiality clause being yet drawn up and signed by the parties. In this respect, while the communication of confidential information obtained during the negotiation is likely, in itself, to engage the responsibility of the person who uses or discloses it (Article 1112-2 of the Civil Code), drawing up a specific confidentiality contract for negotiations, as early as possible, is strongly recommended, especially when the partners are foreign and the application of French law is not a given.
Moreover, confidentiality clauses inserted in commercial contracts are all too often standard clauses, imprecise both in their scope and in their duration. In this respect, litigation in this area calls for the greatest caution, as some substantive courts do not hesitate to rule out confidentiality clauses that are too imprecise (TGI Nanterre, Oct. 2, 2014, Sté Digitre v. Sté Neo Avenue and M. N.)
It is therefore essential to systematically recall the existence and extent of this obligation of confidentiality with respect to the parties in a precise manner.
3°/ The exclusivity clause
Finally, some contractors have become accustomed to providing, as part of their subcontracting contracts, an obligation of exclusivity with respect to the subcontractor who is therefore prohibited, during the execution of the contract, from working for other customers.
Such clauses must be handled with care and be limited to short and very specific benefits. Indeed, it must be borne in mind that the subcontractor must remain independent from the client and that prohibiting him from working for other customers constitutes an attack on his independence.
Thus, in the presence of an exclusivity clause, the risk of litigation is significant and the concept of economic dependence, defined as” the impossibility, for a company, to have a solution technically and economically equivalent to the contractual relationships it has established with another company ”, is never far away (Cass. Com. February 12, 2013, No. 12-13603).
In such cases, the subcontractor whose contract is broken or not renewed could then be tempted to seek damages for abuse of a dominant position in the context of the negotiation of his contract or even for the abusive termination of contractual relationships.
HUBERT Avocat is in a position to assist you in the drafting of your commercial contracts to provide you with protection adapted to your needs as well as in the context of your litigation.
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