- Poaching Employees Is Part of Free Competition
- January 12, 2016
- Law Firm: GRP Rainer LLP - Cologne Office
- According to a ruling of the OLG Oldenburg (Higher Regional Court of Oldenburg), luring employees away from competitors does not constitute a violation of competition law (Az. 6 U 135/15).
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: A company requested that a competing firm be prohibited both from competing in its line of business and enticing employees. The 6th Civil Division of the Oberlandesgericht Oldenburg (OLG) rejected the request in the context of proceedings to obtain interim legal protection.
The OLG held that enticing employees is a fundamental aspect of free competition. It went on to state that this would only amount to an anti-competitive infringement if the circumstances indicated significant dishonesty, which did not apply to the present case.
The OLG had to rule on a case involving a dispute between two companies operating in the same industry. Two shareholders of one of the businesses had sold their shares to a group of investors. In doing so, they undertook not to compete with the business carried on by the group and not to lure away employees. However, the two shareholders had another company with a similar scope of business. They had transferred this to their adult children shortly before the sale. The group of investors was not aware of this. The result was that the children continued to run their business and poached several employees from the group of investors.
The group of investors subsequently raised an action against the company of the original shareholders’ children to cease operating in their sphere of business and luring away their employees. The Landgericht Osnabrück (Regional Court of Osnabrück) upheld the prohibition on competition, but the OLG Oldenburg later amended this decision and rejected the entire claim, stating that the defendant company had not undertaken not to compete and entice workers. The Court also said it could not be proven that the shareholders continued to exert significant influence on their former business and thus only wanted to circumvent the prohibition on competition. In the view of the OLG, it was therefore not possible to establish that there had been an infringement of competition. The OLG’s ruling is final. The applicant company has the opportunity to assert its claim during the main proceedings.
When it comes to issues pertaining to competition law or infringements of the German Gesetz gegen den unlauteren Wettbewerb (Unfair Competition Act), companies can turn to lawyers who are competent in the field of industrial property protection.