The Lower Saxony State Labor Court In its judgment of May 22.05.2025, 5 (case no. 249 SLa 25/XNUMX), the German Federal Court of Justice (Bundesgerichtshof) made an interesting decision regarding the withdrawal of a company car during a period of leave. According to the judgment, a clause in the employment contract that authorizes the employer to release the employee without further requirements being met violates Civil Code § 307 and is therefore ineffective.
1. FACTS
The parties are disputing the payment of compensation. The plaintiff employee worked as a regional manager for the defendant company. His employment contract guaranteed him a company car, which he was also permitted to use privately. The employment contract also contained a clause entitling the employer, in the event of a regular termination, to release the employee from his duties during the remaining notice period and to confiscate the company car.
The employment relationship ended due to the employee's voluntary resignation on November 30.11.2024, 31.05.2025. The defendant employer released the employee from his duties as of May 30.06.2025, XNUMX, and demanded that he return the company car by June XNUMX, XNUMX.
The plaintiff complied with this request. The defendant did not pay the plaintiff any compensation for the confiscation of the company car. The exemption clause in the employment contract contained no further requirements beyond the employer's right to exemption.
With his action, the plaintiff claims compensation for the withdrawal of the company car for the months of July to November 2024.
The labor court partially granted the claim. The plaintiff's appeal was successful, and the Lower Saxony State Labor Court granted the claim in full.
2. DECISION
The Court of Appeal essentially justified its decision as follows: The plaintiff is entitled to damages under the §§ 280 para. 1, 283 sentence 1 BGB for the improper confiscation of the company car and the associated lack of private use.
The indemnity clause in the employment contract is invalid. Furthermore, it is not justified under general considerations.
The granted right to release an employee in the event of termination without the existence of special conditions is incompatible with the fundamental principle of the right to employment recognized by the highest courts. This right generally exists even after termination. It only ceases during the notice period if overriding legitimate interests of the employer or at least objective reasons conflict.
The reason must not refer abstractly to the employment relationship, but rather must reflect a concrete interest of the employer in exemption (e.g. disclosure of customer data, competitive activity). The transparency requirement of the § 307 para. 2 BGB requires that the reasons justifying exemption be specifically stated in the agreement.
3. CONCLUSION
The Regional Labor Court's decision demonstrates that the release clauses that are used in almost every termination dispute are not without risk for employers. Companies should review their employment contracts and have the release clauses amended if necessary.
