Unfair competition: a new employer may be held liable for possessing a competitor’s confidential information
Key takeaways
In a decision dated September 2, 2026, the French Cour de cassation held that possession of confidential information belonging to a competitor and brought by a former employee may be sufficient to establish the appropriation of that information by the new employer and may therefore constitute an act of unfair competition.
Employee mobility between competing companies regularly raises questions about the transfer of files, commercial data and other confidential information. In a decision dated September 2, 2026, the French Cour de cassation significantly increases the exposure of companies hiring employees from competitors to unfair competition claims. (1)
The Court held that mere possession of confidential information belonging to a competitor and brought by a former employee may be sufficient to establish its appropriation by the new employer and therefore constitute an act of unfair competition, without any need to demonstrate that the information was actually used in order to establish such appropriation, and even where the employee is not subject to a non-compete clause. However, this does not apply to all information originating from a former employer.
1. Possession of confidential information may be sufficient to establish its appropriation by the new employer
A former employee of a company had joined a competing business. Confidential documents originating from the former employer were found on the employee’s new work computer.
The Court of Appeal had held that the presence of these documents was not sufficient to establish that they had been appropriated by the defendant companies.
The Cour de cassation overturned that reasoning, holding that “the mere possession, on the employee’s work computer, of confidential information belonging to the employee’s former employer establishes the appropriation of that information by the new employer (…)”.
The issue therefore extends beyond the individual conduct of the employee who brought the files to the new employer. The mere presence of such data on professional equipment provided to the employee may expose the employer to an unfair competition claim.
For companies, this means that an employee’s work computer should not be regarded as legally neutral where it contains information belonging to a competitor.
2. It is not necessary to establish actual use of the information by the new employer
The decision concerns the appropriation of a competitor’s confidential information. Since the Court considers that possession of the information on the employee’s work computer is sufficient to establish such appropriation, it is not necessary, at that stage, to demonstrate that the new employer actually used the information.
A company therefore cannot eliminate the risk of an unfair competition claim merely by arguing that the files were not used, shared with other employees or used to solicit customers.
The decision therefore shifts the analysis upstream: the risk of unfair competition may arise as soon as the company comes into possession of confidential information originating from a competitor, regardless of whether any actual commercial advantage obtained from that information can be demonstrated.
In practice, a company that discovers such files on systems made available to a newly hired employee should therefore act promptly rather than wait to determine whether the files have already been used.
3. The absence of a non-compete clause does not preclude a finding of unfair competition
The Cour de cassation also makes clear that the appropriation of confidential information constitutes an act of unfair competition even where the former employee is not bound by a non-compete clause.
Accordingly, for the new employer, the absence of a non-compete clause does not provide protection against an unfair competition claim based on the appropriation of such information.
4. Not all information originating from the former employer is covered
The decision expressly concerns confidential information. The mere presence, on an employee’s work computer, of a document originating from a former employer is therefore not necessarily sufficient to constitute an act of unfair competition. The nature of the information concerned must be assessed.
Publicly available information or information that is readily accessible on the market does not have the same status as a customer database, pricing terms, contractual documents, technical data or strategic information belonging to a competitor that is not accessible to third parties.
Determining whether the information is confidential therefore remains a key step in the legal analysis.
This issue must also be distinguished from the protection of trade secrets. Confidential information does not necessarily constitute a trade secret within the meaning of the French Commercial Code. (2)
A trade secret requires not only that the information be secret, but also that it has commercial value because it is secret and that it has been subject to reasonable measures to keep it secret. Information may therefore fail to meet all of these criteria while remaining confidential and may still be protected against appropriation under the rules of unfair competition. Accordingly, the fact that information does not qualify as a trade secret does not preclude an unfair competition claim.
This decision by the Cour de cassation is a reminder that employee mobility is not limited to the issue of hiring employees from a competitor. Companies must also control the movement of their data and information assets, for example by implementing classification, access management and confidentiality measures.
When onboarding new employees who previously worked for a competitor, companies are advised to expressly remind them that they must not import files or confidential information from their former employer, include this rule in onboarding procedures, and ensure that IT, HR and legal teams are aware of the steps to take if such a file is identified on the company’s systems.
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(1) Cass. Com., September 2, 2026, No.25-12.718.
(2) See Articles L.151-1 et seq. of the French Commercial Code.
Bénédicte DELEPORTE
Avocat
Deleporte Wentz Avocat
September 2026