Business

Ruling against France's Orange over suicides sets precedent for corporate responsibility

Reuters

A landmark ruling against the former French telecommunications monopoly could pave the way for similar collective procedures.

The telecom group Orange and former CEO Didier Lombard were guilty of “moral harassment” that prompted a spate of suicides during a restructuring in the late 2000s, a Paris court ruled on Dec. 20.

The court sentenced Lombard to a year in prison, of which eight months will be suspended, and a €15,000 ($16,700) fine. Yet since that term is under two years and as Lombard does not present a danger to society, he will not spend time behind bars under French court rules.

The traumatic episode of workers’ deaths at the company in the late 2000s led to deep soul-searching over corporate culture in France.

The court found Orange guilty of the same charge, and fined it €75,000 ($83,200).

“In financial terms, the sentence is light, but this is the first time a French company gets a criminal conviction for moral harassment and that is very bad in terms of reputation,” said a lawyer specializing in white-collar crime.

The lawyer added the ruling will be a major concern for other companies as it sets a precedent for corporate responsibility in moral harassment and employee burn-out cases.

Many individual managers have been convicted of harassment — and often fired as a result — but not companies themselves.

Orange has previously acknowledged the suffering expressed by victims and recognized there may have been management errors in implementing the restructuring plan but denies there was any systemic plan or intention to harass employees.

Prosecutors argued that some of the methods employed in a deep restructuring of the company, then known as France Telecom, after privatization prompted a wave of suicides.

Lombard, 77, and three other former Orange executives also accused of “moral harassment” have denied any wrongdoing and said the restructuring plan was an economic necessity.

The judge estimated that claims for compensation so far were about €2 million ($2.25 million).

The case centers around a drive by the former state monopoly to shed 22,000 jobs and redeploy another 10,000 as it adapted to competition in the private sector.

In a country where workers employed on state contracts expect jobs for life and employees in both private and public sectors enjoy strong labor law protection, unions alleged that management sought ways to encourage workers to quit or accept reassignment.

Prosecutors listed at least 18 suicides and 13 suicide attempts between April 2008 and June 2010. According to union records, one employee stabbed himself in the stomach during a staff meeting and one woman threw herself out of a window.