Netherlands: Silence Is Golden: Ex-Employees Don't Have To Snitch On Former Employers

The Trade and Industry Appeals Tribunal has resolved a long-lasting dispute on the scope of a company's right to remain silent. It ruled that ex-employees can invoke this right when questioned by the NMa (now: ACM)¹ in connection with an investigation into their former employer. In 2009, the NMa imposed record fines on three ex-employees for failure to cooperate in an investigation into possible anti-competitive conduct by their former employer.² The ex-employees refused to cooperate, arguing that they had the right to remain silent, a right acknowledged by the NMa, but only with in regard to the company under investigation and its current employees.³Unlike 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.⁴

According to the NMa, ex-employees do not have a 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, since an extension of this right to ex-employees would harm the effectiveness of its enforcement powers. The District Court of Rotterdam confirmed the NMa's point of view in the appeals by two of the three ex-employees. The court 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". Accordingly, the right to remain silent applies to individuals in so far as they can make statements on behalf of the company which may lead to self-incrimination by the company. An ex-employee no longer belongs to the company and thus cannot be questioned on behalf of the company, but only as an individual. As a result, he can no longer rely on the company's right to remain silent, irrespective of whether his statements incriminate the company.

In the appeal against the District Court's judgment, the Trade and Industry Appeals Tribunal ruled that such a restrictive interpretation of the right to remain silent will deprive the company of effective protection during investigations. The fact that the employees are no longer employed by the company does not justify such a restrictive approach, since the ex-employees were questioned on the company's behaviour at the time of their employment. The Tribunal overturned the District Court's ruling, thus settling the scope of a company's right to remain silent exercised through ex-employees once and for all.

Footnotes

1 The NMa, the Netherlands Consumer Authority and the Dutch Independent Post and Telecommunications Authority (OPTA) joined forces on 1 April 2013, creating a new regulator: the Netherlands Authority for Consumers and Markets (ACM).

2 See our Competition Newsletters of July 2009 and November 2009.

3 It should be noted that employees and former employees can be fined individually for anti-competitive acts committed after 1 October 2007. In such event, they do have a right to remain silent during the investigation.

4 Regulation 1/2003 (OJ 2003, L1/1) does not authorise the European Commission to impose fines on staff members. The European Commission can, however, interview staff members under Articles 19 and 20(2)(e) of Regulation 1/2003. However, 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).

5 Employees and former employees can now also be fined individually for illegal acts committed after 1 October 2007. In such case, these individuals should have a right to remain silent during the investigation.

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