Former French Telecom CEO Jailed for Harassment After Staff Suicides

(Bloomberg) -- France’s biggest phone company and its former chief executive officer were found guilty of harassment in a criminal trial linked to a wave of employee suicides that rocked the firm a decade ago.

France Telecom, a former monopoly now called Orange SA, and ex-CEO Didier Lombard used “forbidden” methods to carry out staff cuts and are criminally responsible for harassment that took place between 2007 and 2008, Paris judge Cecile Louis-Loyant said.

Lombard was given a one-year prison sentence -- of which 8 months are suspended -- and a 15,000-euro ($16,700) penalty. France Telecom was fined 75,000 euros. The sentences represent the maximum allowed by French legal provisions at the time of the offenses. About 3 million euros in damages were also allocated to the many victims.

The ruling may help heal some hurt after the case reopened decade-old debates about a corporate culture at France Telecom that was blamed for a spate of employee suicides. While the verdict will also be analyzed by the business community, Paris lawyer Marie-Alice Jourde said companies have already changed their behavior.

‘Huge Impact’

“CEOs are fully aware they risk criminal convictions in harassment cases,” said Jourde, who isn’t involved in the trial. “The charges pressed against Lombard seven years ago had a huge impact. The law evolved and companies have adapted since then.”

Francois Esclatine, a lawyer for Lombard, said his client is appealing his conviction.

The Paris court also found six other current and former France Telecom staff guilty for their role in the case. The company and all defendants were ordered to jointly pay the damages.

Orange said it won’t appeal. In addition to court-ordered damages, the company said it has also set up an internal panel to find “acceptable compensation solutions.” Orange added that it has implemented measures to prevent workplace suffering and psycho-social risks.

Tensions started building up at the company after the management announced in 2006 it was planning to shed 22,000 jobs over three years as profitability declined. Yet the previously-state-owned company’s circumstances were rather peculiar: it had been recently privatized but many workers were still classified as civil servants and couldn’t be easily fired.

Unions claim a toxic corporate culture developed. Unwanted employees were sidelined or given meaningless jobs to force them out. In the following years, more than 30 employees ended their lives, with one leaping out of the window of a France Telecom building in 2009.

During the Paris trial, Lombard’s lawyers admitted he’d been clumsy but warned that convicting him could cause trouble for other CEO who risk being accused of workplace harassment when they announce staff cuts.

Lombard was sidelined in 2010 and replaced by Stephane Richard, who’s still CEO of Orange.

To contact the reporter on this story: Gaspard Sebag in Paris at gsebag@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Peter Chapman

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