In three judgments of 19 December 2013, recently published, the
Labour Court of Essen (the Court) rejected all damages claims
lodged by different ThyssenKrupp group companies (the plaintiffs)
against Mr Uwe Sehlbach, former ThyssenKrupp Executive Board Member
(as from 2009) and Managing Director of a ThyssenKrupp subsidiary
(until 2009). The plaintiffs argued that Mr Sehlbach had violated
his duties and obligations arising from his employment contracts by
not properly leading and coordinating the group companies belonging
to his business area and by violating his duty to avert and
minimise damage to his employer by omitting to resolve and
terminate competition law infringements by the company. The
plaintiffs also argued that Mr Sehlbach had been aware of
competition law infringements taking place at one of the
plaintiffs, ThyssenKrupp GfT Gleistechnick GmbH (GfT Gleistechnik),
as Mr Sehlbach had been the company's Managing Director during
the period concerned.
GfT Gleistechnik had been directly involved in bid-rigging and
illegal pricing and quota agreements at the expense of Deutsche
Bahn AG. In particular, GfT Gleistechnik had agreed with
competitors at least between 2001 and 2008 on prices charged to
Deutsche Bahn AG for normal rails and was therefore fined
€ 103 million by the German Federal Cartel Office (FCO)
in July 2012 (see VBB on Competition Law, Volume 2012, No. 7,
www.vbb.com). In addition, GfT Gleistechnik was fined another
€ 88 million by the FCO in July 2013 for having engaged
in bid-rigging in the supply of rails, points and sleepers to local
public transportation companies, private, regional and industrial
railway companies and construction companies in the period from
2001 to 2011 (see VBB on Competition Law, Volume 2013, No. 8,
The plaintiffs claimed compensation from Mr Sehlbach for the
damage arising out of both rail track cartels including the total
amount of fines imposed on GfT Gleistechnik, i.e. € 191
million. The Court rejected all claims, finding that Mr Sehlbach
had uncovered and disclosed suspicious cartel conduct at GfT
Gleistechnik to superior group executives already in 2004 and once
again in 2006 during internal compliance audits. No actions had
however been taken by the group.
As regards Mr Sehlbach's liability for the illegal pricing
and quota agreements in view of his monitoring obligations as
Managing Director, the Court found that the management of sales
activities had been the responsibility of GfT Gleistechnik's
other Managing Director. Whilst the Court acknowledged that Mr
Sehlbach had indeed been obliged to monitor also his fellow
Managing Director, the overriding responsibility for the failure of
doing this was with the group superiors who did not act following
the compliance audits in 2004 and 2006.
The Court further clarified that pursuant to the rationale of
the German Act Against Restraints of Competition, the maximum
liability of individuals for competition law infringements is
€ 1 million.
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