Employers can breathe easier for now. The Federal Labor Court confirmed in its eagerly anticipated judgment dated 8/23/2018 that even months later (and therefore in violation of data protection law) evaluated footage from overt video surveillance can be utilized as evidence in an unfair dismissal lawsuit.

The case

In the judgment dated 8/23/2018 (Ref. 2 AZR 133/18), the Federal Labor Court decided in favor of a kiosk owner who had his sales area monitored by a video camera. The video data that was collected was not evaluated until after six months. The reason the data was evaluated was the loss of goods that had been determined, which the kiosk owner wanted to clear up. By a chance discovery during the evaluation, he became aware that for two days his employee had not put money that she had received into the cash register. The kiosk owner terminated her without notice. The employee filed an unfair dismissal lawsuit, arguing that the video data was subject to a prohibition of exploitation since, according to the provisions of the German Federal Data Protection Act (FDPA), the video data was supposed to be deleted after no later than 48 hours.

While the first two lower courts agreed with the employee, the Federal Labor Court decided that the long storage period of six months cannot lead to the data being unusable. Rather a comprehensive balancing of interests must be made between the employer's interest to protect its property and the employee's interest to protect its privacy rights. If the kiosk owner's processing and use of the data was permissible under data protection law, there is no violation of the employee's privacy rights in the case of the kiosk owner according to the opinion of the Federal Labor Court. The Federal Labor Court referred the case back to the Regional Labor Court of Hamm to clarify this issue.

Deletion obligation under data protection law

From a data protection perspective, the kiosk owner should have evaluated and then deleted the video recordings immediately after collecting the data. The principle of data minimization mandated deletion of data even under the previous law if the data was not required anymore to achieve the purpose for which it was collected (Section 6b (5) FDPA old version). The new law confirms and substantiates this principle in Article 17 (1) (a) GDPR. In the opinion of the data protection authorities, it is reasonable for employers to clarify within one to two days whether it is necessary to safeguard the video material. That is why the material is supposed to be deleted no later than 48 hours after the data is collected. If these principles are disregarded, the employer could face heavy fines.

Federal Labor Court: labor law trumps data protection law!

In this context, it may come as a surprise that the stored data that violated the deletion obligation is admissible as evidence. Accordingly, a tendency can be noticed in the first and second lower labor courts to conclude that if there is a data protection violation, the evidence is automatically inadmissible (most recently: Regional Labor Court of Baden-Württemberg dated 7/20/2016 – 4 Sa 61/15, LAG Hamm dated 6/17/2016 – 16 Sa 1711/15). In the case of the kiosk owner, both lower courts also held that the video recordings were inadmissible as evidence because of the violation of the deletion obligation under data protection law.

The Federal Labor Court opposes it. Even after the GDPR came into force on May 25, 2018, the court has still always adhered to the balancing of interests on a case-by-cases basis. According to the Federal Labor Court, data protection law is not a prohibition addressed to courts for including data in proceedings, which was collected, processed, or used contrary to data protection law. The decision of the Federal Labor Court is in line with a series of decisions about whether evidence obtained by surveillance can be exploited for labor-law proceedings. In labor-law proceedings, the Federal Labor Court in the past has repeatedly referred to the sensitive relationship between protecting the privacy of employees and protecting the property of employers (Federal Labor Court dated 9/22/2016 – 2 AZR 848/15; Federal Labor Court dated 7/27/2017 – 2 AZR 681/16).

Conclusion

The decision of the Federal Labor Court is to be welcomed. Evaluating video material within 48 hours is not possible, especially for smaller employers. If every violation of data protection law always resulted in the collected material being inadmissible, video and other forms of surveillance would lose their preventative effect and often make it impossible to discover criminal offenses against employers. In this respect, the Federal Labor Court correctly emphasizes the importance of an employer's rights to protect its property. Nevertheless, this judgment is unsatisfactory in practice since it does not give any clear answers. Determining specific deletion periods that would be more feasible for smaller businesses would be more preferable than weighing each individual case.

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