Case

Vito was an executive working for Company, a business firm, on a contract obligating him to continue working, and Company to continue employing him, for a period of ten years. Company promised to pay him a large sum of money, equal to a year's pay, (a) in the midst of his term of employment because he received an offer of immediate employment at higher pay from a competing firm, or (b) at the end of his term of employment, after he had announced his intention to retire, to thank him for his services. Is Company obliged to keep this promise? Does it matter if Vito has already bought a vacation house he could otherwise not afford?

Discussions

FRANCE

In French law, Cases 10(a) and 10(b) raise quite different questions.

The question in Case 10(a) is whether an agreement that restricts an employee's choice of employment is valid. Such a restriction is valid provided that three conditions are fulfilled: the agreement must be limited as to time; it must be limited as to space; and its purpose must be to serve a legitimate interest of the employer. If these conditions are all satisfied, the restriction is valid, but it is still subject to a special rule that is foreign to the requirement of cause in contract law: the employer is not obliged to give something in exchange for the restriction. There are two exceptions to this special rule: it does not apply when a quid pro quo is provided for by a collective agreement with a trade union or by a contract between the employer and the employee.