La Cour de Cassation, the French supreme court, heard that in 2000, Garnier, L'Oreal's beauty division, was looking to recruit a sales team for the Fructis Style haircare range.
When the brief went out, one of the requisites was that staff should be "BBR", an acronym for the colours of the French flag and widely used to signify someone who is white and of French descent. It also wanted the women sized between 8 and 12.
The case was brought by anti-racist group SOS Racisme after it was discovered that only 4.65% of sales staff hired were black, Asian or Arab despite those groups covering 38.7% of potential candidates.
L'Oreal and recruitment consultancy Adecco, which handled the recruitment drive, has been fined £25,500 each and ordered to pay the same amount again to SOS Racisme.
L'Oreal expressed "disappointment" over the verdict while Adecco insisted the company had been looking for candidates who "could express themselves in French." Adecco also said the brief to hire BBR candidates was a personal initiative rather than company policy.
The case is the latest embarrassment for L'Oreal over its attitude towards race. Last year it came under scrutiny over allegations it had whitened Beyonce Knowles' skin in an ad, a claim it was forced to deny.
While in India, actress and L'Oreal brand ambassador Aishwarya Rai, who starred in 'Bride and Prejudice', refused a request from the manufacturer to appear in a campaign for a skin whitening cream.
The L'Oreal discrimination case ends as another featuring fashion retailer Abercrombie & Fitch is about to start. A former employee with a prosthetic arm who claims she was forced to work in the storeroom because she did not fit in with the company's "looks policy" is taking the store to an employment tribunal.
Law student Riam Dean is seeking £25,000 in compensation. She said Abercrombie's policy made her question her "worth as a human being". However the store claimed Dean's problems stemmed from anxiety issues rather than Abercrombie's personnel policy.