Case 10: promises to pay more than was agreed II

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to the requirement of cause3 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. In those cases, the employer will have to pay in exchange for the employee agreeing to be bound by the restrictive covenant. The restriction is regarded as separate from the rest of the contract and subject to the usual requirements of art. 1131. It must be acknowledged, however, that some academic writers on labour law contest this analysis. They suggest that agreeing to such a restriction is not a sacrifice and should as a general rule comply with the ordinary requirement of cause.

Company could claim that it only agreed to the modification under duress: Vito was already obliged to work for a definite term at a certain salary and might have threatened to quit unless he received more. It is unlikely to succeed because, as explained in discussing Case 9, French courts have taken a restrictive view of claims of economic duress.

Case 10(a) falls under the second of the exceptions to the special rule. The promise made subsequent to the contract to compensate the employee for staying is a modification of the contract. By this analysis, Vito could argue that he was entitled to the quid pro quo contractually agreed upon. If Company refused to pay him, he would be entitled to specific enforcement of the promise or damages, which would amount to the same thing. It should be noted that the courts have no power to revise the amount contractually agreed upon as a quid pro quo for Vito agreeing to respect the restriction.

In Case 10(b), Company’s promise to pay Vito a large sum of money upon his retirement may be subject to art. 931 of the Civil Code which provides that all gifts must be made in a notarially authenticated document or else are void (see Case 1). The case law generally requires that a promise to make a gift must fulfil the same formal requirements as the gift itself.4

There is a dispute among scholars over when a promise to make a contract requires a formality that the law prescribes for that contract itself. Some claim that the promise requires the formality whenever the contract requires it (contrat solennel). Others want to distinguish according to the main purpose of the requirement. According to them, the formality should be required only when its main purpose is to ensure that a party

3 Article 1131 of the Civil Code states: ‘An obligation without a cause or with a false or an

genuinely consented. They are correct that even if the formality sometimes protects third parties, the essential reason for requiring it is to protect the donor. Therefore, it seems that the promise of a gift should observe the same formalities as the gift itself.

Nor can Vito claim that the promise falls within one of the exceptions which case law has recognized to the requirement of a formality: indirect or disguised gifts, and gifts made by actual delivery.

He may, however, argue that the promise made by Company is gratuitous because Company meant to thank him for his previous services. In that case, the promise would not be simply one of a gift but one of a gift in compensation for something already received (donation rémunératoire). It is quite unclear, however, whether the moral interest in making compensation for services received would be deemed a quid pro quo so that the promise would no longer be subject to the requirement of a formality. This question is left by the Cour de cassation to be decided by the lower courts. One cannot, therefore, expect the decisions to be consistent. Nevertheless, in view of the significant sum of money involved, it is unlikely that the decision will be in Vito’s favour.

Conceivably, the promise is one of payment in return for the services already received. If so, the contract is not gratuitous but onerous (acte à titre onéreux). Nevertheless, in order to be considered as a payment for the services rather than as a gift, the services previously rendered must be valued in money, and the amount of the gift must not exceed their value. This claim seems rather tenuous since Vito has already been properly remunerated for his services, and the sum is significant (one year’s salary).

belgium

The agreement in this case is an employment contract governed by the Law of 3 July 1978 on employment contracts (see arts. 3 and 7).

Normally, this type of contract expires at the end of the term of employment agreed upon between the parties (art. 32). In Case 10(a), the employee may terminate the contract in advance to accept an offer of employment from a competing firm, provided he complies with art. 40 of the Law, which provides:

If the contract was entered into for a set term of employment . . ., the party who terminates the contract before its end, without serious grounds (sans motif grave), is required to pay the other an indemnity equal to the remuneration accruing to the end of the term of employment. This sum may not, however, exceed twice the amount of the remuneration corresponding to the length of the period of advance

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notice which should be respected had the contract been entered into without a set period of employment.

The length of the period of advance notice for a contract with no determined period of employment (contrat à durée indéterminée) depends on both the amount of the annual remuneration and the agreement struck between the employer and the employee (see art. 82). The period of advance notice will lie somewhere between four and six months. Thus, the indemnity could correspond to between nine months and one year of Vito’s remuneration. It is also worth noting that the employee has an obligation to keep confidential (obligation de confidentialité) any secrets he may have been aware of in the course of his employment (art. 17). He also has an obligation not to compete (obligation de non-concurrence), the scope of which varies with the employment contract under consideration (arts. 65 and 86).5 Consequently, Case 10(a) is unlikely to arise in Belgium. In any event, if Vito decided that it is advantageous to breach his contract and to pay the indemnity just described, nothing could prevent his employer from seeking to keep him working for Company. Company could therefore offer Vito extra money, but it would have to be careful that Vito cannot interpret this gesture as a salary increase which could be due to him for the rest of his contract.

In Case 10(b), the promise is to perform a typical natural obligation (obli- gation naturelle), here, to pay a pension not legally due (pension extra-légale) (see Cases 1 and 2). The employer’s promise converts it into a civil obligation which is legally enforceable. Consequently, it will not be treated as a donation which would not be enforceable unless evidenced by a notarial document (acte solennel) (see arts. 931, 932, and 1339 of the Civil Code, and Case 1).6 The case law has repeatedly held that the promise to pay a pension not legally due is the acknowledgment of a natural obligation and therefore a valid promise that the employer can be required to perform (exigibilité).7

the netherlands

As noted in discussing Case 9, a contract which changes an existing contract is valid. So the promise to Vito is valid unless Vito threatened to quit

5 See V. Vannes, Le contrat de travail: aspects théoriques et pratiques (1996), 291–4: for instance, looking for employment from a competing firm does not constitute a violation of this obligation not to compete. 6 See Raucent, Les libéralités nos. 120–3.

7Liège, 27 June 1963, JL, 1963–4, 33; Trib. comm. Bruxelles, 14 March 1967, RPS, 1970, 123; Trib. comm. Bruxelles, 6 May 1971, JCB, 1971, I, 661; Bruxelles, 3 Jan. 1974, RW, 1974–5, column 671, and see Van Ommeslaghe, Droit des obligations, 362–3.