Newsflash
Data protection and privacy

On 11 May 2021, the European Court of Human Rights ruled that the fine imposed by a Luxembourg court on an employee who disclosed secret tax documents of his employer’s clients does not constitute a violation of his right to freedom of expression. In future, whistleblowers will always have to weigh up the public interest in receiving certain information against the damage this may cause to the employer.

The employee or “whistleblower” was at the time of the offence employed by a consultancy firm based in Luxembourg where he worked mainly on tax matters. During the performance of his employment contract, he became aware of tax agreements between several multinational companies and the Luxembourg tax authorities, whereby these multinationals benefited from highly advantageous tax regimes.

At the end of 2012, the employee disclosed several of these tax agreements to an investigative journalist, which later became better known to the general public under the name “LuxLeaks”. Subsequently, the employee was convicted by a Luxembourg court of unlawful disclosure of trade secrets and confidential information.

The employee took his case to the European Court of Human Rights, as he considered that this conviction violated his right to freedom of expression. The European Court of Human Rights considered first of all that the employee should indeed be regarded as a “whistleblower” in view of the Court’s previous case law.

The Court found that in this case, it had to balance the public interest in receiving certain information against the possible damage that a disclosure of trade secrets could cause to the employer.

The court concluded that the disclosed information had been of insufficient interest to justify the unlawful disclosure. It found that the disclosed documents did not constitute essential, new or previously unknown information. Therefore, the disclosure of the information did not outweigh the damage suffered by his employer, namely a major loss of reputation and the loss of client confidence.

Furthermore, the Court also observed that the Luxembourg court had imposed a fairly modest fine of EUR 1,000. The Court concluded that this fine, given its relatively low amount, did not cause a major restriction of the employee’s right to freedom of expression.

The court also confirmed that the Luxembourg court had remained within its margin of appreciation by correctly weighing up the interests. Thus, in the present case, there is no violation of Article 10 of the European Convention on Human Rights (the right to freedom of expression).

Key message

In future, courts will therefore always have to weigh up the interest involved in the unlawful disclosure of confidential information by an employee. In doing so, courts may take into account the possible damage that this disclosure may cause to the employer.