France: Corporate Due Diligence Duty: 1st Court of Appeal Ruling

For context, by a law of 27 March 2017, France was the first country to impose a corporate duty to implement due diligence measures on environmental stewardship, health and safety, and respect of human rights. This applies to foreign companies that employ at least 10,000 employees worldwide, including at least 5,000 employees in France.

Several NGOs have initiated proceedings against large French companies considering that the measures taken were insufficient. The recent ruling against France’s privatised postal service, the La Poste Group, is the first to see what is expected in practice.

This ruling deemed the information published by La Poste insufficient because its risk mapping was not sufficiently precise regarding which risks were deemed most serious and why. However, the Court of Appeal confirmed the lower Court’s ruling that employee representative bodies were not required to participate in such risk mapping exercise.

The law also provides that companies are required to set up a grievance mechanism “in consultation with” employee representative bodies and that this required sufficient information and exchange prior to its implementation.

It is interesting to note that the Paris Court of Appeal rendered this ruling notwithstanding the fact that there is a certain level of uncertainty with regard to the future contents of the EU Corporate Sustainability Due Diligence Directive.

Key Action Points for Human Resources and In-House Counsel

Check if your activity in France is within the scope of this law or if you are required to provide certain information to your French clients who are within the scope of such law.