ALERT: European Court of Justice Rules: Words Not Only Hurt, But Can Constitute Discrimination

The European Court of Justice ruled on July 10, 2008 that not only can words hurt but that an employer’s public statements can constitute discrimination in violation of the European Council Directive 2000/43 EC requiring equal treatment irrespective of racial or ethnic origin (Case C-54/07 of July 10, 2008, Centrum voor Gelijkheid van Kansen en voor Racismebestrijding v. Firma Feryn NV). The case involved a Belgian seller and installer of automated garage doors, Feryn, whose executive told a local newspaper that because of customer prejudice his company would not recruit or hire persons of Moroccan origin. A violation was found even though there was no individual who had applied for and was denied a job because of his ethnic origin.

On a reference from the Belgian Labor Court of Appeal, the European Court of Justice ("ECJ" or "European Court") was asked to rule on three issues:

(i) to interpret the provisions of the European Racial Equality Directive 2000/43 for the purpose of assessing the scope of the concept of direct discrimination in the light of the public statements made by an employer in the course of a recruitment procedure;

(ii) the conditions in which the rule of the reversal of the burden of proof laid down in that Directive can be applied; and

(iii) what penalties may be considered appropriate in the case at hand.

On the first issue, the European Court ruled that an employer’s public statement that it will not recruit employees of a certain ethnic or racial origin constitutes direct discrimination in violation of the European Racial Equality Directive. Such statements, it is maintained, are likely to discourage certain candidates from submitting their application and, therefore, complicate their access to the labor market.

On the second issue, ECJ decided that such public statements, standing alone, do give rise to a presumption that the company maintained a discriminatory recruitment policy in violation of Article 8 (1) of the Directive. It is then up to the employer to prove that there was no breach of the equal treatment principle. It can do so by showing that the company’s actual recruitment practice does not correspond to those statements. It is for the national courts to verify that the facts alleged are established and to assess the sufficiency of the evidence submitted in support of the employer’s contentions that is has not breached the principle of equal treatment.

As to the third issue, the European Court indicated that the sanctions to be applied must be effective, proportionate and dissuasive, even if there is no identifiable victim. The Directive does not prescribe a specific sanction, but leaves the Member States free to choose between the different solutions, which can include a finding of a discrimination by the national court or the competent administrative authority in conjunction with an adequate level of publicity, the cost of which is to be borne by the employer; a prohibitive injunction increased, where appropriate, by fines; or the award of damages to the organization filing the claim and leading the proceedings.

One question that remains is who will be able to file claims of discrimination where no identifiable individual has suffered from an actual discriminatory procedure. The European Racial Equality Directive envisioned the establishment in each Member State of an organization to promote equal treatment and provide independent assistance to victims of racial discrimination. However, the Directive requires only that Member States ensure that such associations may represent discriminated individuals or support them in their proceedings. Some Member States, like Belgium, have reinforced this obligation and allow the Belgian organization to act as an independent entity capable of bringing suit, regardless any individual discrimination case. Other Member States however, such as Germany, UK, Spain, Italy or France have implemented only the minimum requirement imposed by the European Directive, which implies that the local national associations can only represent or support individual victims of discrimination and that they can not file a claim without such individual case.

The practical implication for employers doing business in Europe is that they need to carefully review all statements of company policy or practice, including handbooks and employment applications, and remove any references that might be considered discriminatory.

For further information, please feel free to call your Jones Day contact or:

Chantal Biernaux
Boulevard Brand Whitlocklaan 165
B-1200 Brussels, Belgium
Tel: 32.3.645.15.32
Fax: 32.2.645.14.45

Friederike Gobbels
Prinzregentenstr. 11
80538 Munich
Federal Republic of Germany

Lisa Mayhew
21 Tudor Street
London EC4Y 0DJ
United Kingdom
Tel: 44.20.7039.5205
Fax: 44.20.7039.5999

Anne C. Boileau
120, rue du Faubourg Saint-Honoré
75008 Paris

This alert is intended to provide a brief synopsis of recent developments in the law and should not be construed as legal advice. For more information, please contact your Jones Day contact, Jacqueline Holmes or Sarah McClure, at 1.202.879.3939.