Commercial Agent or VRP? France's Salaried Sales Representative

What is a VRP under French law?

The VRP — voyageur-représentant-placier — is a salaried sales representative, assigned to a defined territory (historically "the place") or to a determined clientele, to promote products and gather orders. Acting in the name and on behalf of a supplier, the VRP performs a function that looks closer to a mandate than to employment, and indeed the sales representative was originally an independent professional mandatary. A law of 18 July 1937, in the great expansion of French social law, assimilated the representative to an employee while, unusually, preserving its right over the clientele it created — an arrangement long criticised as a contradiction, but one that survives and defines the figure.

The consequence is that the VRP straddles two worlds. It works like a salesperson in the field, with autonomy over how and when it canvasses; but it is an employee, with the protections of labour law, and its disputes go before the labour court (conseil de prud'hommes), not the commercial court. For a foreign company, this is the heart of the matter: where its French intermediary is a VRP, it is an employer, with all that follows — social charges, employment protections and a customer indemnity on termination.

The conditions that make someone a VRP

Article L 7311-3 of the Labour Code fixes the conditions, and they are, as the courts put it, necessary and sufficient: a natural person whose function is to prospect a determined clientele or sector, with a view to taking orders, in a manner that is personal, constant and exclusive, for commission. The case law adds a requirement of autonomy. Each element carries weight.

The autonomy the status requires is real but bounded. Because the VRP works outside the enterprise's premises, it must be able to determine for itself how and when it canvasses; a representative who merely keeps appointments the employer has fixed, and does not master the establishment of the customer relationship, falls outside the status. Yet that autonomy must remain limited, for otherwise the representative would no longer be in the state of dependence that justifies applying social law at all — the courts add, however, that the absence of a relationship of subordination does not by itself exclude the legal status of VRP. It is this combination — an autonomous canvasser who is nonetheless an employee — that gives the VRP its distinctive, and for a foreign company treacherous, character.

The distinction between exclusivity and non-competition is worth holding: exclusivity bars the VRP from doing anything but representation, whereas a non-compete would bar it only from working for competitors. And the multicartes representation — one representative carrying complementary product lines for several suppliers — is expressly compatible with the status, letting employers share the representative's cost and benefit from the synergy of presenting complementary products to the same clientele. A change to the object of a multicartes VRP's representation — new products, or a new employer's line — will, however, generally require a fresh agreement, so the range a VRP carries is not easily altered without planning for it in the contract.

A status of public order — presumed, and not waivable

The legal qualification of VRP is of public order (Article L 7313-4 of the Labour Code): where the substantive conditions are met, the clauses of the contract binding the representative to its employer do not matter. Two consequences follow, and they cut in opposite directions.

First, the status is presumed. Where a person carries on an activity of representation in the name and on behalf of a business without a written contract, that person is presumed to be a VRP; the presumption is rebuttable, and the employer may defeat it by showing the substantive conditions are not met. Second — and decisively for a foreign company — the status cannot be waived. The parties' sole will is powerless to remove from a representative the social status that necessarily flows from the actual conditions in which the activity is carried on; a contract that labels the relationship otherwise cannot be opposed to a person who in fact meets the conditions. The reverse is also possible: the parties may conventionally attach VRP status even where the conditions are not fully met, provided the stipulation is express and unequivocal — a device employers use, for instance, to obtain the representative's acceptance of a change to the territory or product range, which the requirement of a stable clientele would otherwise make difficult.

VRP or commercial agent? The decisive difference

The VRP and the commercial agent are close cousins: both canvass a clientele in a supplier's name, both are rewarded on the business they bring, and both earn a clientele-based indemnity when the relationship ends. The difference is status, and it is fundamental. The commercial agent is an independent professional, governed by the commercial-agent statute, registered as such, litigating in the commercial court. The VRP is an employee, governed by the Labour Code, litigating in the labour court, and bringing to the supplier the whole apparatus of employment: contributions to the general social-security scheme, employment protection, and the employer's obligations.

Which one applies is not a matter of choice but of substance, and the frontier is genuinely fine, because a natural person who canvasses personally, constantly and exclusively for commission satisfies both descriptions. The practical stakes of getting it wrong are large: a company that appointed what it believed to be an independent agent, but whose representative is in truth a VRP, faces reclassification as an employer, with back-contributions and the panoply of employment claims. The safest position for a foreign company that wants an independent intermediary is to appoint a legal person or a genuinely independent operator, or a registered commercial agent, and to ensure the relationship does not, in fact, meet the VRP conditions — rather than to rely on the contract's chosen label.

Where the parties do choose the VRP route, or where the status is imposed by the facts, the analysis does not stop at the label either. The courts have held that the parties' voluntary submission to VRP status cannot deprive the representative of the ordinary employee status that would otherwise apply: social law being of public order and applied in the worker's favour, the representative benefits, as the case may be, from whichever status is globally more advantageous or, provision by provision, from the more favourable rules of each. The upshot for a foreign employer is that VRP status is not a menu from which the harsher parts can be selected and the protective parts declined; it comes as a protective whole, measured against ordinary employment, and always read in the representative's favour.

The customer indemnity (indemnité de clientèle)

The signature protection of the VRP is the customer indemnity of Article L 7313-13. Where the contract is terminated at the employer's initiative and not on account of the VRP's grave fault, the representative is entitled to an indemnity "for the part personally due to it in the importance, in number or in value, of the clientele it brought, created or developed." The courts have been careful to explain its nature: it is not the price of a clientele passing from the representative's estate to the employer's, but reparation of the harm the representative suffers on leaving — losing, for the future, the benefit of the clientele it built, and with it the regular flow of commissions that clientele generated.

Two conditions govern it. The termination must be imputable to the employer — which includes the non-renewal of a fixed-term contract (Article L 7313-14) and a termination following an accident or illness causing the VRP's permanent total incapacity — and it must cause the VRP a loss, which supposes a genuine contribution of clientele to the employer: there is no indemnity where the products are not the subject of repeat purchases, because no durable clientele is built. It is not due where the VRP commits a grave fault, nor to the VRP's heirs on death (there being no lost future remuneration), nor where the remuneration was a fixed sum rather than commission.

As to amount, Article L 7313-16 requires the indemnity to equal the loss suffered and forbids fixing it as a lump sum in advance — save by a collective agreement — so a clause pre-setting the figure is void; the judges assess it sovereignly. The indemnity does not cumulate with the redundancy indemnity or the retirement indemnity, because their object is the same reparation of the loss of leaving, so the VRP claims whichever is highest; where there is no customer indemnity, the VRP may still claim the statutory redundancy indemnity. It does, however, cumulate with damages for a breach of the notice period or for the employer's fault, and with the financial counterpart of a post-contractual non-compete, which repair different harms.

The rationale is worth understanding, because it explains the indemnity's limits. The representative is said to have built up a "situation rent" by winning and retaining a clientele that secures it a regular flow of commissions; the termination destroys that rent and the indemnity repairs the loss. A subtler analysis treats the indemnity as correcting an enrichment of the employer without proper counterpart — the clientele the representative created and left behind — since the employment contract, by definition, pays for the representative's work and not for the result of that work, the clientele. Either way, the indemnity attaches to a clientele genuinely built by the representative, which is why it fails where no durable, repeat clientele exists.

Two related mechanisms round out the picture. Where a successor is approved to take over, that successor pays the outgoing VRP a sum in principle equal to the customer indemnity it would have been owed — a droit de présentation that confirms the indemnity measures the flow of business the VRP personally created between the employer and the clientele. And to escape the uncertainty of a case-by-case valuation, the 1975 interprofessional collective agreement has pre-set end-of-contract and retirement indemnities; that conventional indemnity cumulates with the reimbursement of professional expenses but not with the redundancy, customer or retirement indemnity. The indemnity is also not owed where the contribution of clientele has already been rewarded — because the remuneration incorporated it as an advance, or a retirement indemnity already covered it — provided that reward genuinely matched the loss.

Exclusivity, the collections, and post-contractual non-compete

The VRP's status carries its own set of obligations and protections beyond the indemnity. The employer may require the VRP to prospect only for it — an exclusivity — but only within the ordinary limits on restricting a worker's freedom: the restraint must be indispensable to the employer's legitimate interests, justified by the nature of the task and proportionate, and it opens a right to a minimum remuneration; it is excluded where the canvassing is only partial. The VRP must, for its part, keep and present the collection of products entrusted to it, and the employer must not hinder the VRP or violate any territorial or customer exclusivity granted to it, including by marketing products that would compete with those the VRP distributes.

A post-contractual non-compete is governed, where the 1975 interprofessional collective agreement applies, by conditions that echo the general law: it must be limited in space and time — to a maximum of two years from the end of the contract — failing which it is void, and the court may not itself cut it down. Because it restricts the former VRP's activity, the collective agreement requires a financial counterpart, set at two-thirds or one-third of the average monthly remuneration of the last twelve months depending on whether the non-compete runs for more or less than a year, with a floor; and it deprives the clause of effect where the VRP is dismissed in the first three months, or resigns in the first forty-five days, of employment. The employer may nonetheless renounce the clause, formally, within fifteen days of termination. This counterpart cumulates with the customer indemnity, because it repairs a different harm — the restriction on future activity rather than the loss of the clientele already built.

Frequently asked questions about the VRP

What is the difference between a VRP and a commercial agent in France?

A VRP is a salaried employee governed by the Labour Code, with social contributions and disputes before the labour court; a commercial agent is an independent professional governed by the commercial-agent statute, with disputes before the commercial court. Both canvass a clientele and earn a clientele-based indemnity, but through entirely different regimes.

Can a company avoid VRP status by calling the person an independent agent?

No. VRP status is of public order (Article L 7313-4) and is even presumed where a person represents a business without a written contract. Where the conditions of Article L 7311-3 are met, the label does not matter. A company can only avoid it by ensuring the conditions are genuinely not satisfied.

What are the conditions to be a VRP?

A natural person who prospects a determined clientele or sector to take orders, personally, constantly and exclusively (representation as the sole activity), for commission, and with autonomy (Article L 7311-3). These conditions are necessary and sufficient.

What is the customer indemnity (indemnité de clientèle)?

Under Article L 7313-13, where the employer terminates without the VRP's grave fault, the VRP is owed an indemnity for the clientele it brought, created or developed. It repairs the loss of that clientele's future commissions, cannot be fixed in advance (Article L 7313-16), and does not cumulate with the redundancy or retirement indemnity — the VRP takes the highest.

Can a VRP work for several companies?

Yes. A multicartes VRP may represent several employers, with the employer's agreement, because exclusivity means representation as the sole activity, not a single employer. This lets employers share the representative's cost and present complementary products to the same clientele.

Is the customer indemnity due if the VRP resigns?

Generally no — the indemnity requires a termination imputable to the employer. It is also excluded for the VRP's grave fault, on death (to the heirs), and where the products are not subject to repeat purchases so that no durable clientele was built.

Key takeaways

How our French lawyers help with VRP and representation status

This article is for general information only. It does not constitute legal advice. Whether a representative is a VRP is fact-specific and turns on how the activity is carried on. Contact our French lawyers for qualified advice before appointing a sales representative or on a termination.