The Rotterdam District Court recently ruled that former employees cannot invoke the right to remain silent when questioned in relation to their former employer.(1) In 2009 the Competition Authority (NMa) imposed record fines on three former employees for failure to cooperate in an investigation into possible anti-competitive conduct by their former employers.(2) Unlike the European Commission, the NMa is authorised to impose fines not only on companies, but also on individuals for failure to cooperate with an investigation.(3) The former employees refused to cooperate on the basis of the right to remain silent, a right acknowledged by the NMa in regard to the company under investigation and its current employees only.(4)
According to the NMa, former employees have no right to remain silent in cases where its investigation is targeted at the company only.(5) In such cases only individuals interviewed by the NMa on behalf of the company can rely on this right. Former employees cannot be seen as representing the company and therefore have an obligation to cooperate with the NMa's investigation.
The district court confirmed the NMa's point of view in recent appeals by two of the three former employees. The court first reiterated earlier case law in which it was held that if a company is interviewed, the right to remain silent can be invoked by anyone who "belongs to the company and through whom the company is being questioned".(6) Accordingly, the right to remain silent applies to individuals insofar as they make statements on behalf of the company which could lead to self-incrimination by the company. A former employee no longer belongs to the company and thus can be questioned not on behalf of the company, but only as an individual. As a result, he or she can no longer rely on the company's right to remain silent, irrespective of whether his or her statements are incriminating for the company. Therefore, the NMa rightfully imposed a fine for failure to cooperate. It remains to be seen whether the former employees will appeal against the judgment with the Trade and Industry Appeal Tribunal.
This ruling pre-dates the NMa's authority to impose fines on individuals who "have instructed on or have exercised de facto leadership" in regard of anti-competitive practices, introduced in October 2007.(7) Consequently, former employees should carefully consider the capacity in which the NMa is questioning them. If they are questioned as former employees who have instructed or exercised de facto leadership in regard of an anti-competitive practice, they will have an individual right to remain silent. In all other cases they will have a legal obligation to cooperate and cannot invoke the right to remain silent.
For further information on this topic please contact Jolling De Pree or Erik H Pijnacker Hordijk at De Brauw Blackstone Westbroek by telephone (+31 70 328 53 28), fax (+31 70 328 53 25) or email ([email protected] or [email protected]).
(1) See Rotterdam District Court rulings of June 9 2011, LJN:BQ7658 and LJN:BQ7633.
(2) For further details please see "Former general managers pay dearly for principles" and "Competition Authority fines another former employee".
(3) Regulation 1/2003 (OJ 2003, L1/1) does not authorise the European Commission to impose fines on staff members. However, the commission can interview staff members under Articles 19 and 20(2)(e) of Regulation 1/2003. Only in the latter case may a fine be imposed on the undertaking for failure to respond to a question (see Article 23(1)(d) of Regulation 1/2003).
(4) See Rotterdam District Court ruling of August 7 2003, Texaco Nederland, LJN:AI1062.
(5) Employees and former employees can now also be fined individually for illegal acts committed after October 1 2007. In such case, these individuals should have a right to remain silent during the investigation.
(6) See Rotterdam District Court ruling of August 7 2003, Texaco Nederland, LJN:AI1062
(7) Since October 1 2007 it is possible for the NMa to fine individuals who have instructed or have exercised de facto leadership in respect of practices contrary to the cartel prohibition or the prohibition on abuse of a dominant position (for further details please see "Revised Competition Act invests Competition Authority with greater powers".