Wecontinue our series of articles on the metaverse. This article contains further important aspects concerning the labour law challenges in the metaverse: What is the "diversity & inclusion" situation in the metaverse? And how should you deal with harassment and discrimination risks?

The metaverse requires a whole new way of looking at things. Unlike the current internet, the metaverse is based on permanent communication and interaction. With the help of virtual and augmented reality technologies, people can interact in the metaverse in a variety of ways. Physical reality is networked with virtual space. With the aid of avatars, users can shop, play games or explore the virtual world in the metaverse.

The metaverse is also modernising the workplace and creating new interaction opportunities for businesses. For example, employees from all over the world can contact each other and collaborate from different locations. Most of the work is done in virtual offices or "collaboration hubs". Furthermore, employees can be trained in virtual training models. In addition, employees can meet customers in the metaverse to advertise and sell the company's own products, or they can meet applicants during the recruiting process.

Diversity & inclusion also a topic in the metaverse

One of the most exciting things about the metaverse is the creative freedom and the ability to have yourself represented by an avatar. When designing avatars, users can decide on skin colour, gender and ethnicity, for example. They can even give their avatar characteristics that they themselves do not have. In Meta's Diversity Report 2022, the company boasts of more than a trillion different possible combinations in avatar design. This in turn raises important questions about diversity and integrity in the workplace, thus shifting discrimination law risks into the metaverse.

On the one hand, avatar design options must be diverse enough to enable all users to find a portrayal of themselves in the options in order to prevent discrimination according to Secs. 7 (1), 3 (1), (2) of the German General Equal Treatment Act [Allgemeines Gleichbehandlungsgesetz, AGG]. The portrayals in the metaverse therefore have to reflect the diversity of the real world. Another important inclusion factor is that work in the metaverse must be equally possible for all employees by making the necessary equipment available to all employees. One should bear in mind in this connection that the technology chosen does not exclude people with disabilities. The latest update of Meta therefore includes the virtual representation of assistive technologies such as cochlear implants and wheelchairs to include people with disabilities in the virtual world.

Specifications for avatars by the employer?

On the other hand, this gives rise to the question of whether digital avatars must represent the user identities "realistically" or whether users are allowed to invent their identities in the metaverse completely freely. Can employers demand that an employee's avatar be designed realistically or can such an instruction be considered unfair as a violation of general personal rights?

Here, the employer's interest in a real representation of its company in the metaverse is likely to outweigh the employees' interest in freely designing their avatars. In our opinion, an employer's order to appear at the virtual workplace under one's real name and to make one's own avatar as realistic as possible is not only permissible, but also recommendable from the employer's point of view. This is because the permitted anonymity in the metaverse is likely to lower the inhibition threshold for virtual misconduct such as virtual harassment or discrimination and thus increase employers' liability risks.

Employers must protect employees

In the metaverse, as in the real world, employers have an obligation to protect both their employees and their customers from harassment and discrimination by their own workforce. This requires companies to take appropriate preventive measures when dealing with the metaverse, such as the realistic design of avatars, a personalised login, and suitable instructions for employees when working in the metaverse. In practice, for example, specifications already exist for minimum distances to be adhered to between avatars to ensure protection against sexual harassment in physical form.

Who is liable for employee misconduct in the metaverse?

In addition to the aspects of occupational health and safety law described above, the possibility of performing tasks in the metaverse also raises numerous liability issues for companies. What claims can they face if their employees behave incorrectly in the metaverse?

Whether an employer is liable for the misconduct of its employees towards third parties in the metaverse will be determined by whether the employee was acting as a vicarious agent for the employer at the time of the breach of duty or damaging act pursuant to Sec. 278 of the German Civil Code [Bürgerliches Gesetzbuch, BGB]. Insofar as the misconduct had no factual connection with the task assigned to the employee, liability is likely to be rejected. For employers to be able to determine this, there is therefore a need for appropriate supervisory and control mechanisms in the digital space. Here, the employer must strike an appropriate balance between monitoring activities and the employees' right to privacy.

If, on the other hand, an employee is subjected to harassment in the metaverse, this raises the question of whether they have a right to refuse performance under Sec. 14 AGG. According to this provision, employees are entitled to suspend performance of their work until the employer has taken appropriate protective measures.


Companies that want to present themselves in the metaverse and have their employees work there need to be forearmed and should give timely thought to suitable instructions for the design of avatars and the behaviour of employees in the metaverse, as well as the appropriate protection, sanction and control mechanisms.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.