Yves Rocher found liable in Duty of Vigilance Law case
- On 12 March, the Paris Commercial Court found Yves Rocher in violation of the Duty of Vigilance Law in relation to violations of freedom of association at its Turkish subsidiary.
- This is only the second ruling on the merits, following the La Poste decision in December 2023. It is also the first case concerning violations at subsidiaries abroad, and the first in which financial compensation was awarded as a remedy.
- This alert is based on an unofficial English translation of the ruling and coverage by IndustriALL.
Case background
On 23 March 2022, French NGOs Sherpa and ActionAid France, Turkish trade union Petrol-Is, and 81 workers brought a case against Yves Rocher, alleging that Yves Rocher’s due diligence plans from 2018 and 2019 (published in 2020) failed to include analysis of labour risks in its subsidiaries, including in Turkey – the company’s most recent Duty of Vigilance Law report does include references to risks in its subsidiaries. Additionally, Yves Rocher failed to regularly assess its subsidiaries and apply risk mitigation and prevention measures.
Timeline:
- In 2012, the company had acquired a 51% stake in two Turkish companies – Kosan Kosmetik Sanayi (KKS), which operates a production facility in Gebze, and Kosan Kosmetik Pazarlama (KKP), which is responsible for distribution. As part of the process, it commissioned a social audit which noted risks related to trade unionisation in Turkey.
- In 2018, Petrol-Is launched a membership campaign and attracted workers who wanted to challenge poor working conditions and reports of discrimination and violence against women. It gained recognition as representative within KKS (157 workers out of 379). However, this was contested by KKS in court. The legal basis for this is not clear from the ruling.
- In 2018 and 2019, KKS dismissed 132 employees who were affiliated with Petrol-Is, leading to protests and an investigation by Turkish labour authorities, which established that the employees were victims of “union oppression” in the workplace.
- Yves Rocher then launched an audit in May 2018, which confirmed the anti-union practices and included the adoption of an action plan, which has not been published. It drafted a collective settlement agreement, which included compensation for “any damages arising from their employment with KKS”. The amount of the compensation was not disclosed. This was signed by 126 employees, including 72 of the claimants in this case.
- In 2021, Yves Rocher acquired 100% of the Turkish companies, which became Yves Rocher subsidiaries, and they were sold to a Turkish company in 2024.
Decision
On 12 March, the Paris Court held that Yves Rocher had breached its obligations under the Duty of Vigilance Law, focusing on claims related to freedom of association, for which it established there was clear evidence, rather than discrimination or violence against women.
The Court found:
- Yves Rocher’s vigilance reports, including its 2018 report, had only focused on risks related to suppliers and subcontractors, but not subsidiaries
- Yves Rocher should have been aware of the link between union activities and subsequent dismissals, particularly in light of the 2012 audit. The Court did not accept the company’s arguments that the circumstances around the dismissals were concealed by local management
- If these risks had been properly addressed, the harm could have been avoided.
The Court ordered Yves Rocher to pay €8,000 in compensation to each of six workers, €40,000 to the trade union, and symbolic damages of €1 to Sherpa and ActionAid. The 72 plaintiffs who were part of the group that accepted the 2019 settlement were found not to be entitled to further compensation. Two further plaintiffs did not sufficiently demonstrate that their job loss was due to trade union activity, and one plaintiff has already received a positive ruling against KKS in Turkey and is in negotiations over final compensation.
Yves Rocher has not yet announced whether it intends to file an appeal. The company’s most recent Duty of Vigilance Law report includes references to risks in its subsidiaries. In the meantime, the company has sold both Turkish subsidiaries mentioned in this case.
Implications under the CSDDD
The CSDDD, which will begin applying to companies in 2029, will likely result in similar outcomes. Companies are required to prioritise the most severe and likely risks. Where a company has appropriately prioritised, failure to address lower-priority risks should not in itself trigger liability.
Procedural questions
The Court determined that French law rather than Turkish law should apply to this case. We have not examined the Court’s reasoning on this question in detail.