Labor Court: Side business as grounds for dismissal

A Berlin labor court ruled that an employee’s unauthorized side business on social media can justify immediate termination. The decision clarifies when competitive or reputation-damaging activities breach employment duties, even without a formal non-compete clause. Case: 22 Ca 10849/25 (2026).

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Ruling: Side business justifies termination

The Berlin Labor Court ruled on January 27, 2026 (Case 22 Ca 10849/25) that an employee’s side business on social media can justify immediate termination. The court found that offering competing services—even without a formal non-compete agreement—violated the employee’s duty of loyalty. For someone facing a similar situation, this means: if your side activities directly compete with your employer or harm their reputation, termination without notice may be lawful.

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Why the court decided this way

The case hinged on whether the employee’s social media profile breached their duty of loyalty. German labor law requires employees to avoid actions that harm their employer’s interests. Here, the court saw the employee’s public offers for marketing services as direct competition, even though the contract didn’t explicitly ban side jobs. The ruling clarifies that loyalty obligations apply regardless of written clauses.

What happened in this case

The employee, a communications manager, ran a social media profile advertising freelance marketing services. The employer discovered this after the employee had already been terminated for unrelated reasons. The court focused on whether the profile’s content—including direct pitches for services similar to the employer’s—justified the initial termination. The employee’s remote-work clause and high salary didn’t change the outcome.