The case recently decided by the Federal Labour Court concerned an employee, who was employed at the management level at an annual salary of approximately 450,000 Euros. After the employer received several anonymous complaints regarding possible compliance violations, the employer hired a law firm specialised in compliance investigations in order investigate the allegations. The law firm undertook investigations and found that the suspected employee invited people at the employer’s expense without official cause and had charged the employer for private travel expenses. The investigation cost a total of 210,000 Euros and led to a dismissal without notice.
Furthermore, the employer demanded reimbursement of the investigation costs on the basis of the Federal Labour Court’s case law regarding the reimbursement of private investigator costs. In the present case, the employer’s claim was questionable, especially considering the total amount of costs. Accordingly, the lower courts had not (or only partially) awarded the claim for reimbursement.
The Federal Labour Court has now ruled that the employer can demand full reimbursement of investigation costs even when hiring a law firm for compliance investigations. The prerequisites of reimbursement are that a specific suspicion of a serious misconduct was formed and that the misconduct is actually proven through the investigations. However, the reimbursement shall be limited by the conduct and decision of a reasonable person.
If the requirements are met and the investigations were not inappropriate, the employer can therefore demand reimbursement of the costs for investigations regarding the misconduct of employees. This judgement is of major importance for practice. Compliance investigations are playing an increasingly important role and the costs are not inconsiderable. The reimbursement of investigation costs in the event of misconduct – especially in this amount – is rather unusual, as claims against employees can usually only be enforced to a limited extent (seizure limits, private insolvency). When it comes to the (large) costs of a compliance investigation, it can, nevertheless, be worthwhile (especially with regard to management and well-paid employees) to assert claims for reimbursement. That this possibility exists and its prerequisites are clear now. In any case, employers can use such reimbursement claims as additional leverage in separation negotiations.
In the present case, however, the employer had not substantiated that the costs claimed were actually necessary. There was no substantiated explanation of which specific activities or investigations were carried out by the law firm, when and to what extent and because of which specific suspicions against the employee. In the event of a lawsuit, employers must be able to present the investigations in detail to reimburse costs. It is therefore advisable to document the investigations in detail from the first step onwards and to present this in court accordingly.