Definition and Fundamentals of Employee Bribery
Employee bribery refers to a criminal offense under German criminal law that regulates the improper influence of employees in private companies through benefits. The aim is to protect economic interests, ensure competitive neutrality, and safeguard the integrity of private legal relationships. Employee bribery is a corruption offense and is distinct from classic bribery in the public sector.
Statutory Regulations
Standardization in the Criminal Code
Employee bribery is regulated in Sections 299 et seq. of the German Criminal Code (StGB) under the title ‘Bribery and Corruption in Commercial Practice.’ Both the demanding, allowing to be promised, or accepting of benefits by employees (Section 299(1) StGB) as well as the offering, promising, or granting of such benefits by third parties (Section 299(2) StGB) are punishable offenses.
Purpose of the Provisions
These provisions serve to ensure fair competition conditions and protect private companies from improper influence on internal decision-making processes by third parties. This safeguards the integrity of decision-making in business enterprises and counters distortions of competition.
Elements of the Offense of Employee Bribery
Circle of Perpetrators and Victims
The addressees of the offense are employees, staff, or agents of companies or businesses. Public officials or individuals in public service are not covered; these are subject to the regulations of (public) bribery (Sections 331 et seq. StGB).
Acts of Commission
Benefit
A ‘benefit’ refers to any material or immaterial consideration to which there is no legal entitlement and which puts the person in question in a better position objectively.
Impropriety
The granting or acceptance of an advantage is only punishable if it is done ‘improperly’, i.e., in violation of contractual duties toward the employer. It is irrelevant whether the advantage benefits the offender or a third party directly or indirectly.
Competition
Another prerequisite is acting ‘in competition.’ The act must therefore occur in the context of a business competition situation, such as the awarding of contracts or business relationships.
Subjective Circumstances of the Offense
Intent is mandatory for the offense of employee bribery. Conditional intent regarding all objective elements of the offense is sufficient.
Legal Consequences of the Act
Employee bribery can be punished with imprisonment of up to three years or a monetary fine. In particularly serious cases, the penalties may be higher. Confiscation and forfeiture of unlawfully obtained benefits are also possible.
Distinguishing from Other Criminal Offenses
Distinction from (Public) Bribery
Employee bribery is different from bribery in the public sector (Section 334 StGB). While the latter involves public officials, employee bribery is limited to private economic transactions.
Distinction from Fraud
Employee bribery must be differentiated from fraud and breach of trust offenses. While fraud requires deception about facts and breach of trust requires a violation of duty towards one’s employer, employee bribery consists solely of improper influence on competitive decisions.
Procedural Aspects
Report and Prosecution
Employee bribery is an offense prosecuted ex officio and is pursued by the authorities. In particular, companies harmed, competitors, or supervisory authorities may be entitled to file a report.
Limitation Period
According to Section 78 StGB, the regular limitation period is five years, starting from the completion of the offense.
International Aspects
European Union
In the European context, there are also criminal law standards to combat corruption in companies, particularly through EU Directive 2017/1371 (the so-called ‘PIF Directive’) and the OECD Convention on Combating Bribery.
Relevance in Global Trade Relations
International companies must therefore observe not only national but also international anti-corruption standards, for example, the UK Bribery Act or the U.S. Foreign Corrupt Practices Act (FCPA).
Prevention and Compliance
Corporate Obligations
Companies are required to establish compliance measures and internal control mechanisms to identify and prevent corruption risks.
Training and Whistleblower Systems
Regular employee training and whistleblower systems contribute to the early detection and avoidance of employee bribery and are integral parts of effective compliance programs.
Summary and Significance
Employee bribery is a significant criminal offense designed to protect fair competition in the private sector. It covers improper influence by and on employees in a competitive context and is subject to comprehensive legal regulations and compliance requirements. The ongoing internationalization of business relationships and stricter regulations emphasize the growing importance of prevention and consistent prosecution of cases of employee bribery.
Frequently Asked Questions
What criminal consequences do employees face in cases of bribery?
Employees who make themselves liable to prosecution under Section 299 StGB face significant criminal consequences. German criminal law distinguishes between active bribery – i.e., offering, promising, or granting a benefit – and passive bribery, which involves accepting such a benefit. If an employee is lawfully convicted of bribery or corrupt practices in commercial transactions, the usual penalty is imprisonment of up to three years or a fine; in particularly severe cases, imprisonment can be up to five years. Additional consequences may include a professional ban (Section 70 StGB) or entries in the certificate of conduct, which can have a negative impact on future career prospects. Employers may also have the opportunity to assert claims for damages against the employee.
What role does the company play in employee bribery?
Companies may, in the context of employee bribery, be both victims and indirect perpetrators, especially if management is itself involved or if the corporate management contributes to the offense through breaches of organizational duty. The company itself cannot be prosecuted directly under German law as in some other legal systems, but according to the Administrative Offenses Act (OWiG), a fine can be imposed on legal entities—such as GmbHs or AGs—if responsible persons have committed an offense (Sections 30, 130 OWiG). Additionally, employees involved in wrongdoing may be internally liable to pay compensation to the company if their unlawful conduct has caused financial losses.
Can dismissal be legally enforced based on bribery?
Yes, if an employee is bribed or bribes others in connection with their professional duties, this usually constitutes good cause within the meaning of Section 626 BGB for extraordinary (immediate) termination. The labor court generally recognizes such termination, as the employment relationship between employer and employee is fundamentally destroyed by breach of loyalty and duty. However, an individual case assessment is always required. In the event of repeated offenses following a warning, an ordinary termination may also occur. Furthermore, factors such as the circumstances of the individual case—especially the severity of damages, confession, and length of employment—can affect the actual enforceability of a termination.
What civil claims does the employer have?
In addition to criminal consequences, the employer may have civil claims against the employee in the event of employee bribery. The basis here is in particular the claim for damages under Section 280 BGB due to breach of secondary contractual obligations. The employee is liable for compensation for damages caused by the bribery, such as lost profits, contract cancellation, or reputational harm. In serious cases, the employee may also be required to transfer the benefit obtained from the offense (e.g., bribes) to the employer under Section 812 BGB (‘claim for restitution due to unjust enrichment’). Third parties (business partners) may also conceivably assert civil claims for damages against the bribed company or the employee.
How can employees defend themselves against suspicion of bribery?
Employees accused of bribery should immediately seek legal counsel and, in principle, exercise their right to remain silent. In the investigation procedure, it is advisable not to make any statements regarding the facts of the case before reviewing the investigation file. Defense may focus in particular on disputing the existence of a criminal act, for example, by proving that no unlawful benefit was granted or that there was no substantive connection to official duties. It is also important to thoroughly document one’s activities and secure possible exculpatory testimony. If the employee is wrongly suspected, proactive cooperation in clarifying the matter can be helpful, for example, to avoid reputational damage or to assist their own employer.
What is the significance of compliance management within the company?
An effective compliance management system plays a central role in the prevention of employee bribery. According to Section 130 OWiG, companies are obliged to ensure by appropriate supervisory measures that no criminal offenses are committed from within the company. This includes, in particular, the introduction and continuous monitoring of internal guidelines, regular training, reporting channels for suspected cases (whistleblowing), and consistent audits. An effective compliance management system can not only minimize the risk of criminal offenses but also be regarded as a mitigating factor in official investigations or criminal proceedings. In the event of negligence, significant fines and civil claims for damages may follow.
Is employee bribery prosecuted ex officio?
Yes, employee bribery is an offense prosecuted ex officio in Germany and is generally prosecuted by the authorities. This means that police and prosecutors must initiate an investigation as soon as there is an initial suspicion, regardless of whether a formal criminal complaint has been filed. As a result, employers, employees, and third parties cannot settle a known offense ‘internally’ and refrain from filing a criminal complaint. However, the public prosecutor’s office may, under certain conditions, discontinue proceedings or impose conditions in accordance with Sections 153 et seq. of the German Code of Criminal Procedure (StPO).
