Key points
- A former manager may be held liable if they disrupt the running of their former company, even in the absence of a non-competition clause.
- Recruiting employees whilst knowing that they are bound by a non-competition clause constitutes a breach of duty for which the employer is liable.
- The compensation was calculated on the basis of the lost operating margin, rather than the lost turnover.
- The court awarded €20,296 in respect of economic loss
Former manager convicted of unfair competition
On 18 May 2026, the Toulouse Commercial Court convicted a former manager of unfair competition against his former company, which was represented by Goldwin Avocats. The judgement holds the former manager liable for poaching employees, even in the absence of a non-competition clause – that is, without a commitment not to compete with the company. It also sets out how the compensation is to be calculated.
The facts: a former co-manager sets up a rival company.
Company A, which operates in the fields of consultancy and IT programming, accused its former co-manager of orchestrating the departure of its employees. Mr X, a partner and co-manager since May 2019, had been dismissed in July 2020. In December 2020, he set up Company B, operating in the same sector.
According to Company A, represented by Goldwin Avocats, Mr X encouraged the employees to bring a collective action before the labour inspectorate in early 2021. He then recruited several of them to work for Company B.
Mr X denied any wrongdoing: he was no longer a partner or manager, and was not bound by any non-competition clause. As Company B was placed into compulsory liquidation – a procedure that brings its business to an end – in March 2024, the proceedings continued against him alone.
Why did the court rule against the poaching of employees by a former manager?
The court ruled that the poaching of employees by a former manager, combined withthe disruptioncaused to the business, constituted an act of unfair competition, that is to say, a wrongful act committed to the detriment of a competitor. It based its ruling on Article 1240 of the Civil Code, which obliges the perpetrator of a wrongful act to make good the damage caused.
No longer being a partner or manager does not exempt one from this liability, and the claim does not require any non-competition clause. Emails verified by a judicial officer (formerly a bailiff) prove that Mr X orchestrated the employees’ collective action.
The court also took into account the recruitment of employees whose non-competition clause Mr X was aware of. The causal link stems from the coincidence between these manoeuvres and the resignations; the health crisis does not exonerate Mr X. However, the claim of customer poaching is dismissed: a shared customer base is not sufficient.
What this ruling means for a director or a company
A company may take action against a former director who disrupts its teams, even in the absence of a clause. It must, however, prove three elements: fault, loss and a causal link. In this case, three pieces of evidence were decisive:
- written correspondence, recorded by a judicial officer;
- the single staff register, which records the date of each departure;
- the balance sheets, which set out the actual operating margin.
The compensation awarded depends on this evidence: €20,296 was awarded, plus €2,000 in legal costs. The judgement, handed down at first instance, is subject to appeal, and each situation is assessed on a case-by-case basis.
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Related areas of expertise
Commercial and business law › Unfair competition solicitor in Paris: defending your business
Frequently asked questions about unfair competition by a former manager
Yes: on 18 May 2026, the Toulouse Commercial Court ruled that a claim for unfair competition, based on Article 1240 of the Civil Code, does not depend on a non-competition clause. The company must demonstrate a specific wrongdoing, such as the disruption of its teams, as well as damage and a causal link between the two.
Yes, where the new employer is aware of the clause. The court regards this as a tortious act, that is to say, a wrongful act giving rise to liability outside the context of any contract. In this case, the former manager argued that payment of the financial consideration under the clause had not been proven, but failed to convince the court.
On the lost profit margin, not on turnover. The court accepted 25 per cent of the loss of turnover, amounting to €548,543, and then applied the average operating margin of 3.7 per cent, amounting to €20,296. The claim for non-pecuniary damage was dismissed due to a lack of evidence of lasting damage to reputation.