Claims arising from the breach of trade secrets may only be asserted by a party that protects its secrets from access by third parties through appropriate measures. These measures also include contractual provisions with employees. Following a ruling by the Federal Labor Court (BAG), the question arose as to whether the use of invalid “catch-all” clauses automatically gives rise to the allegation that no reasonable protective measures were taken. However, a new decision by the Baden-Württemberg Regional Labor Court (LAG) offers hope (Judgment of July 3, 2025, Case No. 8 Ta 1/25, available here).
Protective Measures
When assessing whether protective measures are adequate within the meaning of Section 2 no. 1 (b) GeschGehG, the courts consider not only individual measures (alarm systems, access control, IT security, confidentiality agreements, etc.) but also, in particular, two aspects:
On the one hand, it is decisive for the court whether the company has classified and assessed its trade secrets. This is a prerequisite for the design of protective measures. On the other hand, the courts expect that the “need-to-know” principle has been observed. Accordingly, the business owner should grant lawful access to the information requiring protection only to those persons who actually need such access to fulfill their duties or contractual obligations.
In the context of labor law disputes, confidentiality provisions in employment contracts are also particularly decisive for labor courts.
Invalidity of “Catch-All” Clauses
It is well established that if the confidentiality obligation contained in employment contracts is too broad and vague and applies without restriction beyond the end of the employment relationship, it is invalid. We have already reported this in another article (here).
The Federal Labor Court (BAG) clarified this at the highest judicial level in its ruling of October 17, 2024 (Case No. 8 AZR 172/23). The proceedings stemmed from a legal dispute over the impermissible “taking” of trade secrets by a former employee. The clause read:
“XY shall tacitly maintain the confidentiality of all trade and business secrets, as well as all other matters and processes of the company that come to his knowledge in the course of his employment. This obligation shall continue even after the termination of the employment relationship.”
The Federal Labor Court (BAG) determined that the confidentiality obligation was invalid because, in terms of both duration and scope, it covered without restriction all information that came to the employee’s knowledge in the course of his work. The clause effectively functioned as a post-employment non-compete clause and, in practice, prohibited the use of any (experiential) knowledge with a new employer as well as the pursuit of self-employment. Such a confidentiality obligation constitutes an unreasonable disadvantage within the meaning of Section 307 of the German Civil Code (BGB).
The BAG’s decision makes it clear that an invalid confidentiality clause does not constitute a suitable basis for a contractual claim against the employee. Furthermore, it raises the question of whether the use of an invalid confidentiality clause in an employment contract automatically leads to the conclusion that adequate protective measures within the meaning of Section 2 No. 1 b) GeschGehG are lacking, and that claims for the breach of trade secrets are therefore no longer enforceable.
Do invalid confidentiality clauses preclude a claim under the GeschGehG?
In its decision of July 3, 2025 (Case No. 8 Ta 1/25), the Baden-Württemberg Regional Labor Court (LAG) does refer to the Federal Labor Court’s (BAG) ruling and considers the agreed-upon retroactive confidentiality obligation to be invalid due to disproportionate disadvantage under Section 307 of the German Civil Code (BGB). However, unlike in the BAG’s decision, the LAG also addressed the scope of existing technical security measures and indicated that invalid contractual clauses do not, at least not automatically, preclude the assertion of claims under the GeschGehG.
The Baden-Württemberg Regional Labor Court (LAG) ruled that the confidentiality obligations in the employment contract are invalid because they did not establish appropriate confidentiality measures. Specifically, the clauses merely defined company matters that must be kept confidential but made no mention of trade or business secrets. There is no reference whatsoever to the concept of a trade secret, which is why the clause is too vague. The court also adds further aspects to the Federal Labor Court’s (BAG) reasoning.
For example, the court emphasizes that the argument – as advanced by the Higher Regional Court of Schleswig-Holstein in its ruling of April 28, 2022 (Case No. 6 U 39/21) – that an invalid contractual provision should be regarded as an effective contribution to the implementation of appropriate confidentiality measures due to the “psychological barrier” cannot be accepted. The argument that confidentiality clauses, despite their invalidity, remind the employee of his duty of loyalty under labor law and thus always constitute an appropriate confidentiality measure fails to recognize that the confidentiality measures taken must be assessed using an objective standard. Viewed objectively, they would not deter a potential violator from the outset from using the information at issue within the meaning of the GeschGehG.
The court also addresses the scope of the technical and organizational measures: For instance, in light of the value of the relevant files as claimed by the plaintiff, the LAG considers the implementation of the “need-to-know” principle to be insufficient. Even if only employees of the design department had access to the relevant files, this would still account for 20 % of the workforce. The court also views as positive, in principle, the fact that access to the server room is locked and the private use of USB drives is prohibited; however, it considers even these measures to be insufficient. The LAG explains that, for example, encrypting the relevant files, disconnecting the workstations used for design drawings from the internet, or technically blocking the use of external USB drives would have been further possible technical measures. Furthermore, the LAG criticizes the fact that usage activities were not logged and that no other monitoring system was in place.
This decision can be understood to mean that the use of an invalid contractual clause does not, at least not automatically, imply that adequate protective measures were lacking and thus precludes a claim under the GeschGehG. While the existence of invalid contractual clauses may serve as a starting point for the allegation that appropriate protective measures may not have been taken, it is not sufficient to rely on this circumstance as the sole basis. Rather, the assessment must also consider whether (additional) adequate protective measures were in fact taken. If these measures are adequate within the meaning of Section 2 no.1 (b) GeschGehG, the invalidity of the contractual clause does not necessarily mean that claims for the infringement of trade secrets are unenforceable.
Conclusion
The ruling by the Baden-Württemberg Regional Labor Court (LAG) offers hope that invalid clauses in an employment contract do not automatically mean that no reasonable protective measures were taken and that, consequently, claims for the breach of trade secrets are unenforceable. It remains to be seen whether other labor courts, in particular the Federal Labor Court (BAG), will adopt this view. Furthermore, owners of truly important trade secrets must take protective measures that go beyond the usual standards. The ruling also shows that the courts scrutinize individual technical and organizational measures critically and apply strict – perhaps even excessively strict – standards in doing so.