‘Thou Shalt Not Lie’: Termination Without Notice Due to (Attempted) Trial Fraud

Quick Hits

• On August 13, 2025, the Lower Saxony Regional Labor Court ruled that an employee’s false claims in legal proceedings against the employer justified extraordinary termination without notice.
• The court found that the employee’s submission of an alleged employment contract with misleading information constituted a misrepresentation of facts, amounting to attempted trial fraud.
• The ruling emphasizes the importance of distinguishing between legal opinions and factual assertions in court.

Facts of the Case

The employee had been employed by a retailer of e-bikes since January 2016,and had been a branch manager since July 2021. The employer issued the employee an ordinary notice of termination. The employee filed an action for unfair dismissal and also sued for payment of bonus claims. To substantiate these bonus claims, the employee submitted an (alleged) employment contract dated January 15, 2016. The employee argued that, in his view, this employment contract entitled him to the bonus payment he was seeking; according to the employee the parties had agreed on this employment contract and had lived by it. The employer objected, stating that the parties had never agreed on a contract with this content. In addition, the employer submitted email correspondence showing that the parties had only negotiated a draft employment contract (with strikingly similar content) at the beginning of 2023. The employment contract submitted by the employee was a modified version of the draft employment contract from 2023. Ultimately, it could not be proven that the parties had actually agreed on the employment contract submitted by the employee. They also had not signed it. From the employer’s point of view, the employee had therefore lied when he submitted his copy of the employment contract, and claimed that the parties had agreed on and lived by a contract with this content. The employer therefore issued an extraordinary termination without notice for attempted trial fraud. The labor court had to decide whether the employee had lied and whether this justified the extraordinary termination without notice.

Legal Background

An employer may be justified in using an extraordinary termination without notice to dismiss an employee if the employee deliberately provided false assertions in an attempt to win a lawsuit against the employer. By making deliberately untruthful assertions, the employee significantly violates his duty to consider the interests of the employer. This duty also applies during the notice period in case an ordinary notice of termination has already been issued. It is irrelevant whether the untruthful assertion is ultimately relevant to the decision in the specific case. The decisive factor is that the employee irreparably destroys the employer’s trust in the employee’s integrity by lying.

However, such lies in breach of duty only apply to untrue assertions of facts, i.e., about the objective situation. These must be distinguished from value judgments. If the employee merely expresses an incorrect legal opinion in court proceedings, this does not constitute an untrue assertion of fact and therefore does not constitute a lie in breach of duty.

Judgment of the Lingen Labor Court (First Instance)

The Lingen Labor Court upheld the action for protection against dismissal. According to the Lingen Labour Court the employee has not committed an (attempted) trial fraud. Essentially, the Labor Court justified its decision on the grounds that the employee had not made an (untruthful) assertion of facts. According to the Lingen Labour Court the submission of the unsigned employment contract did not in itself contain the assertion that the parties had also agreed on this employment contract. The employee’s submission that he had “a claim under § 4 of the employment contract” was merely a legal opinion and not an assertion of fact.

Judgment of the Lower Saxony Regional Labor Court (Second Instance)

The Lower Saxony Regional Labor Court ruled differently and affirmed that the employee had attempted to commit trial fraud. This (attempted) trial fraud justified the extraordinary termination of the employment.

The Lower Saxony Regional Labor Court considered the filing of the lawsuit and the reference to the submitted “employment contract dated January 15, 2016” to be a misrepresentation of facts. The falsehood lay in the assertion that an employment contract with the submitted content had been agreed upon and lived between the parties. However, this proved to be objectively false in the course of the proceedings. Thus, the employee did not merely assess a fact as the conclusion of a contract and express a legal opinion. Instead, this assertion by the employee contained a “core of fact” beyond a legal opinion: the assertion of an agreement on the employment contract submitted, which did not exist in the claimed manner.

Conclusion

The ruling of the Lower Saxony Regional Labor Court clarifies the consequences under labor law of lies told by employees in legal proceedings against their employers. Employees cannot exonerate themselves by arguing that the untrue assertion was not made by them, but only by their lawyer. The employee must take responsibility for the untrue statements made by their lawyer (Section 85 (1) sentence 1 ZPO of the German Code of Civil Procedure (Zivilprozessordnung – ZPO) in conjunction with Section 46 (2) of the German Labour Courts Act (Arbeitsgerichtsgesetz – ArbGG)). This means that even untrue assertions of facts made by a lawyer can lead to the employee being dismissed due to these lies. The ruling of the Lower Saxony Regional Labor Court thus urges both employees and lawyers to exercise caution when presenting the facts in court proceedings with the employer.

Legal opinions, as value judgments, are exempt from the procedural duty of truthfulness in civil proceedings, as the courts are free in their legal assessment and are not bound by the submissions of the parties. However, the situation is different when it comes to assertions of facts. The ruling of the Lower Saxony Regional Labor Court serves as a reminder to consider carefully checking whether legal opinions also contain a “core of fact” and could thus constitute a factual claim that may be untrue.

Ogletree Deakins’ Berlin and Munich offices will continue to monitor developments and will post updates on the Cross-Border and Germany blogs as additional information becomes available.

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