Ruling of the Munich Higher Regional Court on July 31, 2024, Case No.: 7 U 351/23 e
The forwarding of company-related emails to a personal email address can justify the immediate dismissal of board members. This was decided by the Munich Higher Regional Court in a ruling on July 31, 2024 (Case No.: 7 U 351/23 e).
An extraordinary immediate dismissal is only possible in labor law for a compelling reason. For managing directors or board members, terminating the service contract can be more complicated. However, in cases of gross misconduct, immediate dismissal is also possible here, according to the business law firm MTR Legal Rechtsanwälte, which advises on labor law, among other areas.
Protection of Trade and Business Secrets
The decision of the Munich Higher Regional Court on July 31, 2024, also highlights this. The plaintiff in the underlying case had been a board member of a joint-stock company (AG) for several years, which was converted into a GmbH in 2022. In the board service contract, which was limited until September 2022, the board member committed to maintaining the confidentiality of all operational matters as well as business and trade secrets. This obligation persists even after the board member leaves the company.
The board member contractually agreed not to directly or indirectly disseminate confidential information. According to the contract, this included information about business partners, calculations, address data, or the company’s work results. A breach of confidentiality was expressly stated in the service contract as a compelling reason for contract termination.
Forwarding of Business Emails
However, the board member had repeatedly forwarded business emails to his personal email address or included himself in the “CC” field. These emails contained information such as commissions, payrolls, revenue summaries, or bank inquiries. In late September 2021, the company noticed that the board member had sent these confidential emails to his private email address. After hearing the board member, the supervisory board decided in October 2021 to dismiss him from his position and to terminate his service contract immediately and without notice for a compelling reason.
The board member contested this. He argued that there was no compelling reason for either the revocation of his position or the extraordinary dismissal. He claimed that forwarding the emails to his personal address did not breach confidentiality or data protection rules due to the extensive security measures on his personal email account, as only he knew the passwords and had access rights. He also stated that he never shared the information or used it for non-business purposes. Moreover, he asserted that this practice had been agreed upon with the former chairman of the board.
Violation of Data Protection Law
His lawsuit against his dismissal as a board member and the immediate termination of his employment contract was unsuccessful at the Munich Higher Regional Court. An immediate dismissal of a service relationship for a compelling reason is possible if circumstances exist that make it unreasonable for the company to continue the service relationship until the end of the notice period or the agreed contract duration, considering all circumstances of the individual case. This was the case here, according to the Munich Higher Regional Court.
While the dismissed board member had not violated his confidentiality obligation under § 93 Para. 1 Sentence 3 of the German Stock Corporation Act (AktG) by forwarding business emails to his personal account—since it was undisputed that he did not make the emails accessible to unauthorized third parties and the storage on a freemail server did not fulfill this criterion—he had violated his duty of care under § 91 Para. 1 Sentence 1 AktG and applicable data protection laws. The court ruled that forwarding the emails to his personal account and storing them there constituted processing of the data without the consent of the affected individuals, thus breaching the General Data Protection Regulation (GDPR).
Compelling Reason for Immediate Dismissal
Not every violation of the GDPR constitutes a compelling reason for immediate dismissal. However, a compelling reason does exist when sensitive personal or business-related data is involved, as was the case here, the Munich Higher Regional Court further explained. It was also taken into account that the emails were forwarded multiple times, not just once. A board member in such a case should be treated no differently from employees who acquire or duplicate business documents without the employer’s permission. In the end, the company could no longer be expected to continue the service relationship, and the immediate extraordinary dismissal was valid, ruled the Munich Higher Regional Court.
MTR Legal Rechtsanwälte advises managing directors, board members, and supervisory boards on dismissals and other labor law matters.
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