May 2026 News: Watch Out for the expanding Scope of the duty of vigilance: The International Risk!

By a judgment of March 12, 2026, the Tribunal Judiciaire de Paris rendered a major decision regarding the duty of vigilance, establishing for the first time the responsibility of a parent company for acts that occurred abroad. 

On this occasion, Law No. 2017-399 of March 27, 2017, on the duty of vigilance (hereinafter "the Vigilance Law") is classified as a public policy law (“loi de police”), with serious consequences for internationally operating groups.

• Reminder on the duty of vigilance:

- Who is concerned? All stock companies (SA, SCA, SAS) headquartered in France and employing, at the close of two consecutive fiscal years:

• at least 5,000 employees within the company and its direct or indirect subsidiaries headquartered in France; or

• at least 10,000 employees within the company and its direct or indirect subsidiaries headquartered in France or abroad (Art. L. 225-102-1, para. 1 of the Commercial Code).

à Clarification on threshold calculation: Employees working in a foreign branch (without legal personality) must be included in the calculation of the 5,000-employee threshold, even if they are employed under a local foreign contract.

- What does the vigilance plan contain? The plan must cover the activities of the company itself, its subsidiaries (including foreign ones), and its subcontractors and suppliers with whom there is an "established commercial relationship" (Art. L. 225-102-1, para. 3).

- The liability regime: Failure to comply with the plan's obligations incurs the company's non-contractual liability and obliges it to compensate for the damage that the execution of these obligations would have prevented (Art. L. 225-102-2 of the Commercial Code). This is a special regime: although based on Articles 1240 and 1241 of the Civil Code, it does not aim to compensate for all damage as in common law, but to prevent serious harm to human rights, health, safety, and the environment.

• The facts in a nutshell:

Following union actions within the Turkish subsidiary of a French company (Laboratoires de biologie végétale Yves Rocher, hereinafter "Société Yves Rocher") – the parent company of an international group – more than a hundred employees were dismissed in 2018 and 2019

In March 2022, these employees, accompanied by a union and associations, sued Société Yves Rocher before the Paris Judicial Court, raising the parent company's breach of its duty of vigilance.

The judgment was rendered on March 12, 2026.

• The legal deadlock :  

The question of applicable law was, rightly, raised before the Court.

 Under European private international law, Article 4(1) of Regulation (EC) No 864/2007 of July 11, 2007 (known as "Rome II") states that the law applicable to a non-contractual obligation arising from a tortious act is the law of the country where the damage occurs.

• In this case, it was therefore Turkish law that should, in principle, apply. However, under Turkish law, the action was time-barred.
• The plaintiffs therefore invoked, under Article 16 of the Rome II Regulation, the application of French law, considering that the Vigilance Law should be classified as a "public policy law" (“loi de police”) that could be applied by the French judge, by way of derogation from the law of the place of damage.   

For the record, and according to Article 9(1) of Regulation (EC) No 593/2008 on contractual obligations (known as Rome I), a public policy law (“loi de police”) is: "an overriding mandatory provision the respect for which is regarded as crucial by a country (... ) for safeguarding its political, social or economic organisation to such an extent that it is called for the application of the provision whatever the law otherwise applicable to the contract."

First question: is Law No. 2017-399 of March 27, 2017, on the duty of vigilance a public policy law that can therefore apply to the dispute, instead of Turkish law?

-->  Court's Answer: YES, the Vigilance Law is indeed a public policy law based on the following three criteria:

1) Proximity: there is a sufficient link between the disputed situation and the state whose public policy law is invoked:

•  Société Yves Rocher is a French company, directly subject to the Vigilance Law due to its size. The link with France is obvious..

2)  Necessity: the application of French law is essential to protect the vital interest at stake

• The court notes that Turkish law does not guarantee a level of protection equivalent to French law regarding trade union freedom. Without French law, victims had no effective recourse.

3)  Purpose: the law protects public interests of particular importance to the state. 

• The duty of vigilance law aims to protect fundamental human rights, trade union freedom, and the health and safety of workers worldwide. The judges rely, in particular, on parliamentary work during debates in the National Assembly.

--> The Vigilance Law, recognized under this decision as a Public Policy Law, applies, even if the dispute is international and the damage occurred abroad

Second question: Does the court recognize the liability of Yves Rocher for violations committed abroad by its Turkish subsidiary?

-->  Court's Answer: YES, the liability of Société Yves Rocher can be established according to the following three constitutive criteria: 

1. Fault: The vigilance plans for 2017 and 2018 (published late in June 2020) excluded all foreign subsidiaries from the risk mapping. However, Article L. 225-102-1, paragraph 3, expressly states that the plan must cover the activities "of the companies it controls".
2. Damage: The court found that the employees were dismissed "due to their union membership, in circumstances constituting a serious violation of their trade union freedom"
3. Causation: The judge considers that the effective implementation of a vigilance plan would have prevented the damage. Internal alerts dated April 2018 and international sources documenting the social situation in Turkey should have alerted the company to the foreseeability of the risk and allowed it to assess the concrete utility of the omitted measures

The awarded sentence: Société Yves Rocher is sentenced to pay:

• €5,000 (moral damages) + €3,000 (economic damages) to each of the six former employees whose claims were found to be valid (excluding employees who signed a settlement agreement with the Turkish subsidiary);
• €40,000 to the union for moral damages;
• €1 symbolic to each of the two associations

--> Société Yves Rocher is therefore sentenced to compensate for the damages suffered. This is the first time a French company has been ordered to compensate for damages caused by its activities abroad based on the duty of vigilance.

• In brief: important take-aways    

• Law No. 2017-399 of March 27, 2017, on the duty of vigilance (Art. L. 225-102-1 and L. 225-102-2 of the Commercial Code) is a public policy law within the meaning of Article 16 of the Rome II Regulation.
• It can be imposed in international situations and apply to damages occurring exclusively abroad, whether the vigilance plan excludes or does not expressly include foreign subsidiaries within its scope. It requires particular attention from internationally operating groups.

 

Warning for subcontracting SMEs:  even if not directly subject to the Vigilance Law, they are exposed to a real contractual risk if they have signed a contract with the client (a company subject to the Vigilance Law) that "cascades" compliance obligations with the Vigilance Law. Violation of the "vigilance" clauses included in their contracts can trigger a recourse for guarantee from their client, including for acts that occurred abroad.

 

Sarah Temple-Boyer Lawyer & Certified Mediator in France & with CEDR

Ikrame Rassale  Intern - Law Student