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Urgent need for action for companies

Today (25 April 2019), following its promulgation in the Federal Law Gazette, the Law on the Protection of Trade Secrets came into force. After some changes to the government draft, the Bundestag passed the law on 21 March 2019, and the Bundesrat approved the draft on 12 April 2019. For companies, this entails substantial changes.
In our newsletter last year July (here), we had already informed about the Directive regarding the protection of confidential know-how and confidential business information against illegal acquisition, use and disclosure. After the transposition deadline for the German legislator had already expired in mid-2018, Germany now converted the Directive into national law.

No secret without appropriate secrecy measures

Amendments to the draft version were mainly made to protect freedom of the press and whistleblowers. However, the core of the law is largely unchanged from both the Directive and the government draft. According to the law, an information is only deemed to be a legally protected business or trade secret if it is subject of appropriate secrecy measures of the company. Without such measures, no claims for injunctive relief or damages can be asserted in the event of disclosure or unlawful use. The conceivable protective measures include, in particular, access restrictions, passwords and access codes as well as encryption systems, but also contractual arrangements.

Employment contracts need to be adapted

This means, in particular, that the hitherto usual clauses in employment contracts, which oblige employees to maintain secrecy about "all business secrets and processes in the company in general", should urgently be reviewed and, if necessary, revised. The clauses formulated in accordance with previously acceptable patterns will no longer meet the requirements. As a result, trade and business secrets will largely be unprotected, unless changes are made to employment contracts with key employees.

A coordinated secret protection concept is recommended

However, we recommend not only taking a critical look on employment contracts, but also on the protection of secrets in the company as a whole. It is important to clarify, who has access to which business secrets in the company, who is responsible for protecting them, what the appropriate protective measures are and how those are recorded. This requires not only a thorough analysis of the status quo, but also constant monitoring.
We will be pleased to advise you on how a tailor-made protection concept for your company may look like and, in particular and how such a protection concept can be effectively implemented and managed under German Law.
 
For some time, the European Union has been planning better protection for whistleblowers to improve compliance in companies. Now the clock is ticking. The EU Parliament passed the EU Whistleblower Directive with an overwhelming majority of votes, with 591 votes in favor and just 29 against, 33 abstentions were registered last Tuesday (16 April 2019). Thus, the two-year countdown has started for Member States to convert the Directive into national law.

Companies having just faced the initial hype around the General Data Protection Regulation (which entered into force at the end of May this year) have just noticed that another new European Regulation has somewhat gone under the radar and escaped their notice. Few noticed that European Parliament and the council of the European Union on June 2016 have passed directive (EU) 2016/943 on the protection of undisclosed know how and business information (trade secrets) against the unlawful acquisition, use and disclosure. Other than a regulation such as GDPR the directive is not directly applicable within the EU, but has to be translated into national laws within a two year implementation period. Germany has – once again – missed that deadline which leads to the consequence, that German courts now have to interpret German law in accordance with the directive although no corresponding German law has yet been past. Nonetheless companies, whose business is based on the protection of business secrets, must act immediately in order to protect their business interests.

Following the introduction of the General Data Protection Regulation (GDPR) on May 25th 2018 a number of large companies have decided to ban the use of WhatsApp, SnapChat and similar services on mobile devices, which are either company owned or privately owned devices which are used for business purposes (Bring Your Own Device).
The main reason has to be seen in recent decisions of German courts and opinions publicized by data protection authorities e.g. in Schleswig-Holstein, Thuringia and Lower Saxony.
 

On May 25, 2018, the new EU General Data Protection Regulation (GDPR) and the new German data protection law are entering into force simultaneously. They are no grandfathering clauses; the new laws immediately apply as of the first day without any limitations.
In order to enforce the new regulations in practice especially the GDPR establishes drastic penalties. Fines to the height of 20 Mio Euros or 4% of the total worldwide turnover of the undertaking in previous business year can be imposed.
As before, special rules apply for employee data. This brief overview explains which organisational steps should now be taken by companies, which have not yet started a review in order to avoid huge financial risks as of spring 2018.

2017 is an election year in Germany. Usually this means that parties change into the campaign modus and legislative amendments are rare. This is not the case in 2017, partly due to the fact that most pundits expect the grand coalition to continue after the election.

The evaluation of employee performance and quality of work is essential for employees in all industries. Deficits can lead to complaints of customers and clients and thus may seriously endanger the success of the business enterprise. Specific issues arise in call centers, where main task of employees is answering calls in order to deal with the customer problems or to create new business. The solicitation of new business through calls initiated by the employee is a main line of business for many companies. Employers in such situation have a valid interest in monitoring and / or recording both the verbal communication between the employees and the customers and to record the details of calls that have been made. Employees on the other hand have a valid interest to protect their personality rights, the same applies to customers who call or are contacted.

2016 promises to be an interesting year in German employment law. Only a few days after a draft law on new regulations for temporary work and the differentiation between employment relationships and freelance and works contracts have been published (although it has been meanwhile been withdrawn and will be newly discussed in January) a new draft law on equal pay for men and women has been published by the competent Ministry for Families, Senior persons, Women and Youth. Further the government announced to prepare a further law giving employees the right to return to a fulltime job after having reduced the work time previously.

EMPLAWYERS partner Roland Falder has published a trilingual handbook on German und Chinese labour and employment laws together with his co-author Michael Lorenz, international tax expert and owner of a law firm based in Bangkok and Hong Kong. Roland Falder has a longstanding experience with international secondments to and from China and is a frequency speaker on Chinese employment law topics.

The handbook contains a description of the principles of German and Chinese labour, social security and tax laws in German, English and Chinese. It further includes templates and excerpts from relevant legal materials (such as the Sino German Double Taxation Treaty).

The book will be useful for foreign HR experts dealing with China and makes communication between HR departments and consultants in China and abroad easier. Even experts only interested in German or Chinese employment law will be able to benefit from the handbook.

The book is available in stationary German and Chinese bookstores and with many online dealers (such as amazon.de).

The European Court of Justice (ECJ) has decided that time spent travelling to and from first and last customers by workers without a fixed office must be regarded as working time.

In July 2015 we informed about the non-binding opinion of the Advocate General and the upcoming decision of the ECJ concerning the Spanish case Federación de Servicios Privados del sindicato Comisiones Obreras v. Tyco Integrated Security SL, Tyco Integrated Fire & Security Corporation Servicios SA.

In its decision the European Court of Justice has now acted on the suggestion of the Advocate General and has held, that for the purposes of the Working Time Directive the time spent travelling between an employee's home and the premises of the customer designated by the employer at the beginning and end of each day, should count as working time.