• The German Federal Labor Court held that blanket release clauses in employment contracts that entitle the employer to grant a release upon termination constitute an unreasonable disadvantage and are invalid.
• An employee’s interest in continuing employment until the termination of the employment relationship generally outweighs an employer’s interest in granting the employee a leave of absence in a terminated employment relationship until the expiration of the notice period.
• Exemption is also possible without a contractual basis if the employer’s interests worthy of protection preclude continued employment until the end of the notice period.

Nevertheless, an exemption may be justified if, in the specific case, the employer’s overriding interests worthy of protection conflict with the employment relationship, the BAG said.

The employee had been working as a regional manager in the field sales department since January 2022 and used a company car, which was also provided for private use. The standard employment contract contained a clause stating that the employer was entitled to release the employee from work “upon or following the issuance of a notice of termination—regardless of which party issued it”—while continuing to pay compensation. After the employee resigned, the employer granted him leave and demanded the return of the company car. The employee returned the car but claimed compensation for loss of use in the amount of EUR 510 per month due to the withdrawal. The...

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