An employee disclosed trade secrets, yet the employer’s request for injunctive relief was denied because the confidentiality clause in the employment contract was invalid. The German Federal Labor Court (BAG) held that the broadly worded “catch-all” clause placed an unreasonable disadvantage on the employee.
In a recent decision (BAG, 8 AZR 172/23), the German Federal Labor Court (BAG) heard a case where an employee transferred the sensitive information of his employer to a potential competitor. The facts were clear: the employee, acting under a pseudonym, sent several emails with attachments to the shareholders of a competing company. This was held to be a violation of German trade secret law.
Nevertheless, the employer’s request for injunctive relief was rejected. The reason was not the lack of a violation, but the defective confidentiality clause in the employment contract.
The clause was drafted extremely broadly: it covered not only “business and trade secrets,” but also all other matters and processes of the company that came to the employee’s knowledge in the course of his work. In addition, it imposed this duty of confidentiality indefinitely, including after the termination of employment. The court considered this “catch-all” formulation an unreasonable disadvantage for the employee. As a result, the entire clause was invalid and could not serve as a legal basis for injunctive relief.
Without valid contractual language, companies may...
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