Germany: Discrimination by accommodating the client's request for a male consultant

The article discusses the Regional Labor Court (LAG) Baden-Württemberg’s ruling of 20 November 2024 - 10 Sa 13/24, which deals with the obligation of employers to protect their employees from discrimination by third parties. In the present case, the regional manager of a construction company complied with a client's request to be advised by a man rather than a woman. The court found that the employer was liable for damages for complying with this request without fulfilling its duty of protection under the General Equal Treatment Act (AGG). The ruling underlines the challenge for employers to protect their employees from discrimination on the one hand and not to alienate their own clients on the other.

Protection of employees against discrimination by third parties

According to the AGG, employers are not only obliged to refrain from direct or indirect discrimination themselves but must also protect their employees from discrimination by third parties (Sect. 12 para. 4 AGG). This obligation often comes into play in cases of internal discrimination or harassment by other employees, whereby the employer has a variety of measures at its disposal, ranging from warnings and transfers to dismissal of the discriminating employee. Cases in which discrimination is committed by the employer's clients are more difficult to assess and have been decided less frequently to date. An example of this is the case in which the owner of an upmarket clothing store, in a dispute over the scope of his right to issue instructions, relied on the fact that clients would expect his female employees to work without headscarves (Federal Labor Court, judgment of October 10, 2002 - 2 AZR 472/01). The LAG Baden-Württemberg has now ruled that the employer may be obliged to actively oppose discriminatory client requests regarding cooperation with its employees in order not to expose itself to the risk of liability for damages.

Potential female client asks for male consultant

The court ruling was based on a dispute between an architect and her former employer, a construction company. The architect was assigned a client's request through the internal distribution system and contacted her for an initial meeting. The potential client then contacted the company's regional manager and informed him that she did not want a woman as a consultant. The regional manager then had the case reassigned to him. The plaintiff felt disadvantaged by this decision and asserted claims for compensation based on the AGG. She argued that the decision to withdraw her case constituted direct discrimination based on her gender. The regional manager had accepted the discriminatory statement without further ado and had in no way protected the plaintiff.

Employer must not accept discrimination as unalterable

The court followed the plaintiff's submission and, contrary to the decision at first instance, affirmed direct discrimination by the employer and therefore a violation of the prohibition of discrimination under Sect. 7 para. 1 AGG. The subsequent withdrawal of the case from the case worker's portfolio was considered to constitute direct discrimination.

The plaintiff had thus been deprived of a professional task because of her gender. Discrimination was also not ruled out because the employer had merely complied with a request from the prospective client. This is because the employer could have reacted differently, in particular in order to comply with its obligation under Sect. 12 para. 4 AGG. The law obliges the employer to take suitable, necessary and appropriate measures, whereby the Regional Labour Court emphasizes that what is appropriate is largely at the discretion of the employer and that success is not owed due to a lack of enforcement possibilities.

However, the employer must not "accept the discrimination as unalterable or even adopt it as its own". In this case, the court considered reasonable alternative conduct to be that the employer could have inquired about the reasons for the reservations towards women or tried to convince them that the plaintiff was doing a sufficiently good job. Since the employer itself was actively involved in the discrimination, it was not important whether a mere omission with regard to the duty to protect could trigger a claim for damages. The prevailing legal opinion has thus far denied this assertation.

Amount of a claim for non pecuniary damages

However, the court did not accept the compensation payment of six gross monthly salaries (here: EUR 84,300.00) demanded by the plaintiff. A payment of EUR 1,500.00 was sufficient to satisfy the purpose of the non-pecuniary damages and, in particular, the preventative purpose of the same. In the employer's favour, the court took into account that the HR manager himself had informed the company's AGG complaints office and that the other actions of the management gave the impression that the incident had caused lasting concern. A risk of repetition was therefore unlikely.

Practical note: Requirements for employers

Unfortunately, discriminatory behaviour by clients is still not an isolated case. The judgment requires employers to develop a certain degree of resistance to discriminatory behaviour by clients and to protect their own employees, at least to a certain extent. They must not simply accept this behaviour and allow themselves to be tempted into discriminatory behaviour as a result. The court recognises the balancing act between client wishes and the protection of their own employees. Employers need to be sensitive in order to strike the right tone. Tolerating discriminatory behaviour towards employees cannot be the answer.

The ruling is also interesting in view of the fact that behaviour after the discrimination can also have a significant influence on the amount of compensation and circumstances such as reporting to an AGG complaints office can have a reducing effect. The Regional Labor Court therefore also sees "subsequent conduct" as having a far-reaching influence on the amount of compensation. It is therefore always advisable for employers to carefully investigate such allegations and report cases to complaints offices themselves.