Numerous proceedings under the German Act on the Protection of Trade Secrets (GeschGehG) relate to an employment relationship. This has significant implications for legal advice and litigation, as such cases must generally be brought before the labor courts. A recent decision by the Frankfurt Regional Court emphasizes that, in this regard, it is irrelevant that the employment relationship had already ended many years before the proceedings were initiated. Does the principle of perpetual jurisdiction of the labor courts therefore apply?
I. Legal Framework: Jurisdiction in GeschGehG Cases
The provisions on subject matter and territorial jurisdiction in Section15 GeschGehG are of limited use for enforcing the law and present several problems.
1. Jurisdiction (Exclusively) at the General Place of Jurisdiction
Even the basic rule, according to which, as a general rule, only the court at the infringer’s place of business has jurisdiction (general venue, Section15 (2) first sentence GeschGehG, makes little sense. Although Section15 (3) GeschGehG contains an authorization to issue regulations that would allow proceedings to be consolidated before a court specialized for that purpose, However, to date, only North Rhine-Westphalia, Bavaria, Hesse, and Saxony have made use of this authority. Rhineland-Palatinate, Baden-Württemberg, Saxony-Anhalt, and Schleswig-Holstein have indeed delegated this authority to their respective ministries of justice; however, these ministries have not yet issued any corresponding regulations. This leads to the unfortunate consequence that GeschGehG proceedings must repeatedly be conducted before courts where the members of the adjudicating panels are, at least in part, overwhelmed by the complex technical and/or economic background of the cases and the procedural peculiarities of the presentation of evidence.
2. Jurisdiction of the Labor Courts in Trade Secret (GeschGehG) Matters
Even more problematic is the fact that Section15 (1) GeschGehG contains a restriction on jurisdiction that is not even apparent at first glance. Specifically, this provision establishes the jurisdiction of the regional courts only “for actions brought before the ordinary courts.” Consequently, even under the GeschGehG, the divided jurisdiction that already existed under Section 17 et seqq. of the Unfair Competition Act (UWG) remains in effect.
To the extent that the requirements of Section2 (1) (3)(a), (c), or (d) of the German Labor Court Act (ArbGG) are met, there continues to be a priority special assignment to the labor courts. This, in turn, has significant practical disadvantages when it comes to enforcement – at least due to the courts’ tendency to rule in favor of employees – and, in any case, labor courts also face fundamental difficulties in understanding the provisions of the GeschGehG in some cases (see blog post). Under what conditions do labor courts have jurisdiction?
The jurisdictions under Section2(1)(3)(a) and (c) of the ArbGG are relatively unproblematic. These cover legal disputes “arising from the employment relationship” or “arising from negotiations regarding the establishment of an employment relationship and from its aftereffects.”
In both cases, contractual claims are covered. This includes claims by both the employee and the employer. The scope encompasses not only claims arising from an existing employment relationship but also those that arise before the relationship is established or after it has been terminated. These include, for example, claims for compensation and damages arising from a job application process, claims for the return of application documents, as well as contractual injunctive relief claims regarding competitive activities, or claims for the return of work-related documents following the termination of the employment relationship.
Greater difficulties arise from Section 2 (1) (3)(d), which establishes jurisdiction over disputes “arising from torts, insofar as these are related to the employment relationship.” One particular problem arises from the fact that the term “tort” is interpreted broadly. The tort may have been committed either during the employment relationship, prior to its establishment, or after its termination. Likewise, it is irrelevant if the damage occurs only after the termination of the employment relationship. However, it is always required that the legal dispute be based on the specific nature of the employment relationship or its typical risks. There must be an intrinsic connection between the tort and the employment relationship; it is not sufficient that the act merely occurred in the context of the employment relationship.
There is disagreement in case law regarding the conditions under which the required connection to the employment relationship must be assumed in cases involving trade secrets. For example, a connection establishing the jurisdiction of the labor court is not deemed to exist merely because a former employee is alleged to have violated obligations under the employment contract by misappropriating design drawings and is being sued by his former employer for an injunction. The Higher Regional Court of Nuremberg (Decision of July 24, 2008, Case No.: 3 W 1462/08, available here) denied the existence of such a connection, since the subject matter of the dispute was precisely not the allegation of a tort. Rather, the asserted claim for an injunction was based on the fact that the respondent had used design drawings that a third party may have stolen from the petitioner. The claims were not derived from any post-contractual fiduciary duties under labor law, and thus there was no connection to an employment relationship.
In contrast, the Higher Regional Court of Frankfurt (Decision of May 20, 2005, Case No. 6 W 44/05, available here) affirmed the necessary connection and thus the jurisdiction of the labor courts if the employee had access to the confidential information solely by virtue of his or her professional activities.
Thus, the labor courts have jurisdiction if there is a clear connection to the employment relationship, for example, because the employee obtained the information precisely by taking advantage of his or her employment relationship. This consideration was also a central point in the decision of the Frankfurt Regional Court.
III. Order of the Frankfurt Regional Court
In the facts underlying the Frankfurt Regional Court’s order, an employee had (apparently) obtained certain information during his employment and was now using it for other purposes. The order contains no further information in this regard but merely clarifies that the employment relationship had already ended some time ago. At the time of the order, the employment relationship had thus ended.
Nevertheless, according to the Frankfurt Regional Court’s decision, there is no doubt that a labor dispute exists. The sole decisive factor was that the respondent had obtained the information at issue within the context of the employment relationship. The fact that this employment relationship had already ended some time ago is irrelevant in this regard. Accordingly, the Regional Court referred the proceedings to the competent labor court (Frankfurt Regional Court, Order of Jan. 29, 2026, Case No.: 2-06 O 469/25, available here).
IV. Practical Significance
The decision is unlikely to be objectionable on its merits. It demonstrates once again the need for legislature to reconsider – or amend – the jurisdiction provisions of Section15 GeschGehG in the interest of effective trade secret protection.
If even an “employment relationship that ended some time ago” establishes the jurisdiction of the labor courts, the question naturally arises as to whether – and, if so, where – a time limit might apply. The decision of the Frankfurt Higher Regional Court (OLG Frankfurt) cited above and in the order (GRUR 2005, 792) concerned a case in which an employee worked as an intern at a company in December 2004 and, the following month – in January 2005 – used that knowledge to the benefit of a competitor at that competitor’s company. In this case, even from a temporal perspective, there is still such a close connection that the jurisdiction of the labor courts can be reasonably justified.
But what about cases that occurred significantly longer ago? Consider, for example, the facts underlying the Federal Court of Justice (BGH) decision “Hohlfasermembranspinnanlage II”:
According to the facts, the second defendant in that case was employed by the legal predecessor of the subsequent plaintiff from November 1990 to June 1993 and had access to certain technical information at that time. Alleging that this information had been used to create a replica, the legal successor initiated legal proceedings in 2005 -that is, 12 years later (!) – (which, incidentally, following remand by the Federal Court of Justice, did not conclude until 2021 with the second and final dismissal of the claim by the Higher Regional Court of Koblenz).
According to the logic of the aforementioned decisions on jurisdiction, these proceedings would likely have fallen under the jurisdiction of the labor courts despite the significant time gap. This no longer seems reasonable. After all, this issue was not even addressed by the Regional Court, even though the court required Section17a (2) GVG to examine the inadmissibility of the legal action ex officio.
V. Solution and Conclusion
To the extent that a dispute over a trade secret relates to a current or even (long) terminated employment relationship, claims against the former employee can only be asserted before the labor courts. Where the labor courts have jurisdiction or are likely to have jurisdiction, there are (unfortunately) only a few options. However, if the former employee has disclosed the trade secrets to a third party who is now exploiting them, there remains at least the option of bringing a claim solely against that third party. In this case, the proceedings are directed against a party with whom no employment relationship exists or has ever existed, meaning that legal action before the labor courts is not available. This solution is also possible if the trade secret owner wishes to bring claims against both the new employer and the former employee. As explained above, the proceedings against the former employee must be brought before the labor courts. However, with regard to the new employer who is using the trade secret disclosed to them, there is no connection to an employment relationship, so the ordinary courts have jurisdiction in this matter.