Employee Share Plans in Europe and the USA - Sorainen

Employee Share Plans in Europe and the USAFrance8.3 The consent of each employee should in principle be obtained for the use andtransfer of personal data to a country situated outside of the EEA and whichdoes not ensure adequate protection of his personal data in connection witheach employee share plan in which he takes part. However, the CNIL hasexpressed some doubt as to whether consent obtained from existing employeesmeets the requirement for consent to be "freely given, specific and informed".Therefore, it is recommended that a data transfer agreement should be enteredinto (between the transferor and the recipient situated outside the EEA) which isthen submitted to the CNIL for approval 55 . An exception exists for the transfer ofpersonal data to the US and a transfer to entities located in the US is possible ifthese entities have adhered to Safe Harbour principles.8.4 The employees of French entities participating in an employee savings plan(PEE) must be informed that they have a right to object, on legitimate grounds,to the processing of their personal data before or after such processing.9. Employment law9.1 Please refer to paragraph 4 on pages 5-6 of this guide. This explains theemployment law issues which are generally applicable to a greater or lesserdegree in all the countries covered by this guide. There is a risk that employeesmay claim a right to continued participation in an employee share plan or thatrights under a plan may be included in compensation on termination.Companies should seek specific advice on these issues and other employmentlaw issues which may be applicable.9.2 Where the employee share plan is to be offered to a significant number ofemployees in France, this will be subject to the prior notice to and consultationwith the relevant French works council. Under the French Labour Code, failureto inform and consult the works council may constitute a criminal offence.9.3 Companies operating employee share plans in France should ensure that theyare aware of the risks associated with the operation of any "good/bad leaver"rules in those plans.The French Labour Code provides that any "fines or other financial sanctions"imposed on an employee are null and void. This provision has, in the past, beensuccessfully invoked by employees in relation to their entitlement to a number ofdifferent types of employment-related benefits on termination and there had long55Articles 68 and 69 of the French DPL. It is highly recommended that the standard clauses publishedby the European Commission in its decisions be used in the data transfer agreement.UK/1729295/03 75 September 2010