BAG; 2023-03-09; 5 AZR 55/19
Decision by national courts in the field of European Union law — ECLI:DE:BAG:2023:290323.U.5AZR55.19.0
Date: 2023-03-29
Subject matter: Judicial cooperation in civil matters
Origin: Germany

82023DE0329(52)_ENG_SUMJURE
JURE summary
JURE summary
A private person domiciled in Stuttgart (hereinafter ‘the plaintiff’) filed a claim against a real estate company incorporated under the laws of the US state of Nevada and domiciled in Canada (hereinafter ‘the defendant’) based on a letter-of-comfort type agreement concluded between the parties to the dispute.
The plaintiff worked for the defendant as ‘Deputy Vice President Investors Relations’ on the basis of a service agreement. Due to what they saw as uncertainty about the plaintiff's employment status, the parties decided to transfer the contractual relationship to a newly established Swiss company. In mid-November 2015, they agreed to retroactively terminate the service agreement. On 12 February 2016, the plaintiff concluded a written employment contract with the company ROI Land Investments Swiss AG (hereinafter ‘ROI Swiss’) to work as its director. The shareholder of ROI Swiss was a 100% subsidiary of the defendant. On 1 April 2016, the plaintiff and ROI Swiss entered into a new employment contract in which they agreed on the payment of a signing bonus of 255 000 USD to the plaintiff. After two months, ROI Swiss terminated the plaintiff's employment contract.
The Arbeitsgericht Stuttgart (hereinafter ‘the Court of First Instance’) ordered ROI Swiss to pay the plaintiff the signing bonus of USD 255 000. ROI Swiss did not fulfil its obligation and later bankruptcy proceedings against its assets were discontinued for lack of estate. Subsequently, the plaintiff asserted his claims arising from the relationship with ROI Swiss (1) on the basis of the letter-of-comfort type agreement against the defendant. The defendant requested that the claim be dismissed. It was not liable under the comfort agreement because ROI Swiss was not its subsidiary.
The Court of First Instance denied the international jurisdiction of German courts and dismissed the action as inadmissible. On the plaintiff's appeal, Landesarbeitsgericht Baden-Württemberg (hereinafter ‘the Court of Appeal’) amended the judgment of the Court of First Instance and upheld the action.
With an appeal to the Bundesarbeitsgericht (hereinafter ‘the Supreme Court’), the defendant sought to have the decision of the court of first instance restored.
The Court of First Instance had international jurisdiction pursuant to Article 21(1)(b) of the Brussels I Regulation (recast) (2). The Court of Appeal correctly held that the defendant was liable for the plaintiff's claims against ROI Swiss on the basis of the letter-of-comfort type agreement. The agreement was related to the conclusion of the employment contract between the plaintiff and ROI Swiss, which actually replaced the service agreement between the plaintiff and the defendant. There was a clear link between all three subjects. There was also no evidence of a termination of the letter-of-comfort type agreement. The plaintiff's interest in securing his employment law claims against ROI Swiss through his previous contractual partner remained unchanged. The withdrawal from the letter-of-comfort type agreement declared by the defendant did not fulfil the requirements of Article 313(1) and Article 313(3)(1) of the BGB (3) and was therefore invalid.
However, the Court of Appeal's assumption that the judgement of the Court of First Instance in the proceedings between the plaintiff and ROI Swiss automatically bound the defendant or led to liability for the claims expressed therein was not free of legal error. This judgment could not be binding on the defendant, who was not a party to the proceedings. The plaintiff did not conclusively present several claims in the appeal proceedings, and the Supreme Court could not decide whether and to what extent the action was therefore well-founded. The defendant had to be given the opportunity to respond to the plaintiff's arguments in the further appeal proceedings.
The Supreme Court annulled the judgement of the Court of Appeal and referred the case back to the Court of Appeal for a new hearing and decision.
(1) USD 255 000 as a signing bonus, USD 215 500 as outstanding salary, USD 425 000 as itemised interest, etc.
(2) Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast).
(3) Bürgerliches Gesetzbuch (German Civil Code).