French Duty of Vigilance: Key Takeaways from the Yves Rocher Case

  

The judgment handed down by the Paris Judicial Court on March 12, 2026 in the Yves Rocher case marks a further important step in the development of French duty of vigilance[1]litigation.

 

Following the La Poste case, it is the second ruling finding a French company liable for breach of its duty of vigilance. It is of particular significance, however, as it concerns violations of fundamental rights within foreign subsidiaries

 

Beyond the specifics of the case at hand, the ruling provides practical guidance for international groups, in particular on the application of French law to events occurring abroad, the starting point of the limitation period, the effects of local settlement agreements, and the incorporation of social and human rights risks into vigilance plans.

 

Factual Background

The case arose from the activities of two Turkish subsidiaries of the Yves Rocher group, in which the French parent company initially held a 51% stake before becoming the sole shareholder.

 

In 2018, a union campaign led within those subsidiaries by the Turkish trade union Petrol-Is was followed by the dismissal of 132 employees who had joined the union.

 

The affected employees challenged their dismissals before the Turkish courts. A collective settlement agreement was subsequently entered into in 2019 with a number of them.

 

Taking the view that these events revealed failings in the group’s vigilance program, the Petrol-Is trade union, alongside Sherpa and ActionAid France, issued a formal notice to the French parent company to comply with its obligations under the French Duty of Vigilance Law of March 27, 2017.

 

Following this formal notice, several former employees, the trade union and the associations initiated proceedings before the Paris Judicial Court, seeking compensation for the harm sustained and asking the Court to hold the parent company liable for such harm.

 

The judgment handed down on March 12, 2026 is of particular interest.

 

It is the first decision ordering a French company to compensate for harm caused abroad on the basis of the duty of vigilance. It is also the second ruling finding a French company liable for breach of this obligation, following the ruling against the La Poste group.

 

Beyond the specifics of the case, the decision provides several key lessons for international groups regarding the extraterritorial scope of the duty of vigilance, the applicable statute of limitations, and the conditions governing the liability of the parent company.

 

Takeaway 1: The duty of vigilance may lead to the application of French law to events occurring abroad

One of the key takeaways from the judgment pertains to the determination of the governing law. International groups may legitimately assume that events occurring abroad will be governed exclusively by local law. This, however, was not the approach taken by the Paris Judicial Court.

 

Yves Rocher argued that, pursuant to Article 4(1) of the Rome II Regulation, the law applicable to tortious liability should be the law of the country in which the harm occurred. Since the disputed dismissals took place in Turkey, the parent company maintained that Turkish law should govern the dispute.

 

The Court, however, adopted a different approach, relying on Article 16 of the Rome II Regulation concerning overriding mandatory provisions. The question was therefore whether the French provisions relating to the duty of vigilance were sufficiently mandatory in nature to apply irrespective of the law normally applicable to the dispute.

 

To answer this question, the Court relied on the criteria established in European case law. It recalled that a provision may qualify as an overriding mandatory provision when it has a sufficiently close connection with the State concerned and seeks to protect a fundamental interest of that State’s legal order.

 

In the case at hand, both conditions were met. First, the dispute had a clear connection with France, given that the company involved was a French company subject to the obligations imposed by the French Duty of Vigilance Law of March 27, 2017. Second, the Court held that the protection of human rights and the environment within the chains of activities of French companies constitute an essential objective of French economic public order.

 

On that basis, the Court characterized the French duty of vigilance statutory regime as an overriding mandatory provision and applied French law, even though the facts giving rise to the harm occurred in Turkey.

 

This approach confirms the potentially extraterritorial scope of the duty of vigilance and heightens the exposure of French groups to actions based on harm occurring within their subsidiaries or chains of activities abroad.

 

Takeaway 2: Inadequate disclosure of the vigilance plan may extend litigation risk

As with any legal action, the issue of the statute of limitations arises in duty of vigilance matters, particularly with respect to the starting point of the limitation period.

 

Under French law, such actions are time-barred after five years pursuant to Article 2224 of the French Civil Code. Since the action was brought on May 15, 2023, the question was whether the limitation period started to run from the date of the dismissals, which occurred in March 2018 – which would have rendered the action time-barred – or from the disclosure of the vigilance plan in June 2020, rendering the action admissible.

 

In the case at hand, the Court adopted the second approach and held that the limitation period only started to run from the date on which the vigilance plan was disclosed, i.e., June 2020. The Court justified this position on the basis that only from that date were the employees able to confirm the existence of the vigilance plan and assess its content.

 

As a result, a breach of the duty of vigilance resulting from the absence or inadequate disclosure of the plan has a direct impact on the starting point of the limitation period. This potentially extends the litigation risk for the companies concerned. It is therefore essential for any company subject to the French Duty of Vigilance Law of March 27, 2017 to strictly comply with its obligations, in particular by disclosing its vigilance plan within the required timeframe.

 

Takeaway 3: Settlement agreements entered into by a subsidiary do not automatically shield the parent company from liability

The Court also ruled on the effects of the settlement agreement entered into in 2019 between the Turkish subsidiary and some of the dismissed employees.

 

The former employees who had signed the settlement agreement sought further compensation based on the duty of vigilance. The Court, however, dismissed their claims.

 

The Court first recalled that, as a matter of principle, a settlement agreement is binding only on the parties to it.

 

In the case at hand, the relevant employees were unable to establish harm distinct from that already compensated under the settlement agreement entered into with the subsidiary. The Court therefore held that awarding further compensation would amount to compensating the same harm twice, which is prohibited under the principle of full compensation.

 

This ruling serves as a reminder that settlement agreements entered into locally may have effects in duty of vigilance litigation. However, they do not automatically shield the parent company from liability, in particular where claimants allege harm distinct from that already compensated.

 

Takeaway 4: Social and human rights risks must be incorporated into vigilance plans

The most significant lesson from this ruling likely concerns the scope of the risks that companies must now incorporate into their vigilance programs.

 

The Paris Judicial Court held the parent company liable on the grounds that its Turkish subsidiaries were not included in its vigilance plans for 2018 and 2019. The Court considered that the alleged violations of freedom of association and acts of harassment constituted identifiable risks that should have been addressed through appropriate prevention measures.

 

In reaching this conclusion, the Court noted that the parent company possessed information enabling it to identify the risk of freedom of association violations within its subsidiaries. It held that an adequate vigilance program would have made it possible to prevent, or at least limit, the occurrence of the harm suffered by the relevant employees.

 

The March 12, 2026 ruling therefore adopts a stringent approach to the duty of vigilance. It does not merely penalize the formal absence of a plan or the inadequacy of its content, but examines whether the identified risks were effectively addressed and mitigated through appropriate measures.

 

Beyond the specifics of the case at hand, this ruling urges French groups to pay close attention to social risks and adverse impacts on fundamental rights within their foreign subsidiaries. Issues such as freedom of association, discrimination, harassment and working conditions must now be treated as vigilance risks requiring specific assessment, just like environmental and corruption risks