GRP Rainer LLP

BAG Judgment: An Employee Is Not Obliged to Return the Salary Obtained from a Competitor

The judgment of BAG (the Federal Labour Court of Germany) outlines the principle that there is no obligation for a former employee to return his salary agreed upon with a new employer to the previous one for the reason of the breach of non-competition.


Cologne, NRW -- (SBWIRE) -- 12/19/2012 -- GRP Rainer lawyers and tax advisors in Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The above cited judgment is of great importance in such cases when an employee is indemnified by his or her previous employee for the period between the application for dismissal and the end of his/her employment and in this period starts an employment relationship with a competitor. The Federal Labour Court of Germany (BAG) in its judgment dated 17.10.2012 (Case No.: 10 AZR 809/11) expressed its opinion concerning the claim for compensation for the breach of non-competition.

The employee’s claim assumed that due to a violation of the non-competition clause the employee was obliged to return the salary received from the competitor. She asked to use the compensation received by her former employee from the competitor as partial coverage of the claims of the latter against her.

The applicant’s appeal before the Federal Labour Court (BAG) was unsuccessful. The action had been already dismissed in the lower courts. The claim would be grounded if there were a "business" within the meaning of the Commercial Code. The conclusion of the employment contract with the competitor could not be regarded as such a "business". It is apparent from the BAG’s decision that the employee is not obliged to return to the employer the salary agreed upon with a competitor.

In the labour law, you have to expect short deadlines. In the event of your dismissal you should consult a lawyer immediately.

Most errors in the labour law are related to reprimands and dismissals. In such situations negotiation skills and perseverance are as important as detailed knowledge of the labour law. The choice of a correct strategy in a dismissal-related process determines the outcome. It depends on the choice of the right lawyer.

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GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, and Stuttgart, Germany and London UK.

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