Reimbursement of the “golden hello/welcome bonus” and resignation of the employee

Cass. soc., May 11 2023 n°21-25.136

An employee, hired as a Trader, received a bonus of 150,000 euros under the terms of his employment contract, on condition that he remained with the company for at least 36 months.

In the event of premature resignation, the same clause also provided for reimbursement of the bonus, on a pro rata basis, for the time not spent with the company by the resigning employee.

Also, the employee resigned after 18 months with the company, the employer demanded repayment of part of the bonus, amounting to some 80,000 euros.

The Paris Court of Appeal dismissed the employer’s claim, ruling that the clause infringed the employee’s freedom :

The problem in such circumstances is the impact on the employee of the prospect of having to repay the sometimes substantial part of a bonus and its consequences on his or her decision to resign.

However, in its ruling of May 11 2023, the French Supreme Court overturned the appeal court’s decision, stating that :

– The purpose was to secure the loyalty of the employee whose collaboration the employer wished to secure over the long term,

– The acquisition of the full bonus was independent of the employee’s remuneration,

– The clause did not constitute an unjustified and disproportionate infringement of the freedom to work.

This is a useful guide to the wording of the welcome bonus clause, which must allow the employer to reimburse part of the welcome bonus in the event of resignation before the end of the stipulated period, without this constituting a disproportionate infringement of the employee’s freedom to work.