July 12, 2024
On 20 June 2024, the European Court of Human Rights (ECtHR, Court) published its judgment in Boronyák v. Hungary. The case concerned a fine imposed by the domestic courts on the applicant, Mr. Boronyák, for disclosing confidential information concerning the terms of his contract with a private company. The ECtHR unanimously held that there was no violation of the applicant’s freedom of expression under Article 10 of the European Convention on Human Rights (ECHR).
The Court has dealt with cases involving similar facts in the past. The importance of this judgment lies in the fact that the contractual relationship between the applicant and his contractor was not formally a relationship of employment. It is therefore interesting to consider whether the Court might extend its already established case law on the right to free speech in an employment context to cases where the party invoking said protection is not engaged in a dependent employment contract. The Court’s reasoning in this context will be explored in this post.
In November 2011, the applicant, G. Boronyák, a Hungarian national and professional actor, entered into a contract for an indefinite period with the production company M. to play one of the main characters in a TV series (para 5). The program was to be the product of a co-production between the abovementioned private company and the public company MTVA. The contract stipulated that the television program would be included in the assets of Hungarian public television. Furthermore, the contract contained a non-disclosure agreement (NDA), under which the applicant undertook not to disclose information relating to the activities of the production company M., including inter alia, information on the ownership of M, the production of other related programs, persons who received funding from that company, etc. (paras 5-6).
In 2013, after the program was prematurely terminated, the website atlatszo.hu obtained a court order giving it access to information relating to the financial management of the production of the program. In 2014, the applicant gave a video interview to atlatszo.hu about the fees he had received from the production company.Atlaszo.hu then published an article about the non-payment of severance fees to the applicant. The production company brought proceedings against atlatszo.hu seeking that the statements made in the article be retracted. The following month, the applicant testified as a witness before the Budapest High Court about his contract and its terms. The production company M. subsequently asked the applicant for a payment of HUF 10.000.000 for breaching the NDA. He refused to pay. The production company initiated legal proceedings to claim this amount (paras7-12). The applicant requested that the Hungarian court dismiss the action because, upon the termination of his contract, his contractual obligations had ceased – thus, he was no longer bound by the NDA. He also argued that the information disclosed was of public interest.
The Pest Central District Court found in favour of the production company, it reasoned that the NDA bound the applicant even after his contract had been terminated. Although MTVA has been ordered to release certain budgetary information as it was in the public interest, this did not affect the confidential nature of the information divulged by the applicant. Mr. Boronyák was ordered to pay the penalty demanded and the production company’s court expenses. The first instance judgment was held up on appeal by the Budapest High Court. The High Court also highlighted that the applicant had agreed to keep business information confidential even if he considered that it constituted public-interest information. Both the Hungarian Supreme Court and Constitutional Court dismissed the applicant’s request for a review of the judgment.
Before the ECtHR, the applicant alleged that the fine disproportionately restricted his right to freedom of expression under Article 10 ECHR (para 22). He put forward arguments identical to those he had put forward before the national courts. In particular, he argued his contract with the production company M. had expired on 1 August 2012, and that he had not been bound by the non-disclosure clause since then. In addition, he pointed out that the nature of the information he disclosed was decisive, namely that it was information of public interest relating to the allocation of financial resources to a company in which the State was a shareholder. He added that the national courts had failed to carry out the required proportionality test concerning the fine of HUF 10. 000.000, which was the subject of the complaint (paras 24-28).
The Court first noted that the protection of Article 10 extends to the workplace in general (para 33). Although the applicant’s complaint did not arise from a direct violation of a right by an authority of the respondent State (para 34), the State has a positive obligation to safeguard the right to freedom of information even in the sphere of relations between individuals under Article 10 (para 33). In applying the general principles to the present case, the Court pointed out that when examining the conflicting rights at play the national courts appeared to have assessed the facts of the case as a whole. They do not merely uphold the imposition of the contractual fine on the applicant. In addition, the applicant was still bound by the obligation not to disclose confidential business information. The contractual relationship between him and the production company M. was similar to a relationship directly governed by the rules of labour law. In the ECtHR’s view, although the information disclosed may have been information of public interest, the applicant was under no legal or contractual obligation to make that disclosure as he was not responsible for the management of the public funds which had been used in the production of the television program. In addition, the Court’s caselaw on whistleblowing was not applicable. In addition, the Court was satisfied with the operation of an appropriate mechanism under domestic law concerning the possibility of informing the public on the abovementioned website about the allocation of the funds for the television co-production concerned (paras 45-46). Furthermore, the Court did not consider the fine of HUF 10.000.000 imposed a disproportionate interference with the applicant’s rights. Thus, the ECtHR unanimously held that Article 10 had not been violated in the present case (paras 34-51).
In its preliminary observations, the ECtHR noted that the right to freedom of expression also applies in the context of employment relations. Moreover, it applies not only to employment relationships governed by public law but also to those governed by private law. On this basis, State Parties to the ECHR have a positive obligation to take appropriate measures to protect individuals against interferences with their right to freedom of expression by other private individuals in the context of private-law employment relationships. The extent to which these obligations have been fulfilled is therefore subject to review by the Court, as in the present case (para 33).
In Boronyák, the ECtHR considered that it needed to examine the nature of the contract established between the applicant and the contracting company more closely as this was the relationship from which the contested clause concerning the non-disclosure of confidential business information arose (para 36-38). The Court noted that the contract did not involve the type of subordinate relationship inherent in an employment contract or the exercise of the right to expression within the specific context of labour law (para 36). However, the features of the relationship were similar to those of a contractual relationship governed by labour law. The Court found it necessary to take the specific characteristics of the contractual relationship into account, including the discretion owed by the applicant to company M. as well as his economic reliance on the company. The Court held that the applicant voluntarily agreed to the validity of the non-disclosure clause at issue (para 38). However, this element alone did not prevent it from considering other elements of the case, nor from examining the nature of the disputed contractual relationship more specifically. Furthermore, the applicant’s voluntary agreement to the confidentiality clause was not enough for the Court to refrain from characterizing the contractual relationship as something akin to a dependent labour contract. Thus, this case establishes that the criteria applicable to the restriction of the right to freedom of expression in the context of a dependent employment relationship may be applied to other, similar, but not identical, forms of private contractual relations.
In that regard, it should be recalled that additional restrictions on freedom of expression may be justified where it is exercised in the context of an employment relationship(see, inter alia, Palomo Sánchez and Others v. Spain, paras 74-76, and Rubins v. Latvia, para 78). These additional restrictions constitute a specification of the restrictions relating to the protection of the reputation or rights of third parties under Article 10.2 (Palomo Sánchez, paras 74-76). They are based on the duty of loyalty owed by the employee to his employer. Such restrictions can be accepted provided they are necessary to ensure the smooth operation of a professional environment (Palomo Sánchez, para 74). As regards the ultimate limits of those restrictions, in Palomo Sanchez the Court considered that ‘as the employment tribunal rightly found, even if the requirement to act in good faith in the context of an employment contract does not imply an absolute duty of loyalty towards the employer.’ (para 76). The ECtHR’s case law on the limits of workers’ freedom of expression is already strict. This conclusion follows from the above quotation from Palomo Sánchez. This case mentions the ultimate limit for the imposition of justified restrictions, however, the precise delineation between justifiable and unjustifiable restrictions is not clear. This leaves wide scope for the States Parties to impose substantial restrictions on the right to freedom of expression on those engaged in dependent employment relationships. The Court’s judgment in Boronyák appears to further tighten the ECtHR’s position on the issue as the above restrictions on freedom of speech were held to be justifiably imposed on a contractual relationship which merely amounts to the provision of dependent work. Arguably, the above reasoning developed by the ECtHR is supplemented by the Court’s judgment in Steel and Morris v. the United Kingdom. According to the decision in Steel and Morris (para 94), even in cases concerning companies with a multinational character –whose activity is expected to be subject to greater public scrutiny than that of companies who operate exclusively in a national jurisdiction and who often handle information of public interest –Contracting States are granted a wide margin of appreciation in restricting the freedom of expression of individuals to ensure that the credibility of such enterprises is not undermined.
In Boronyák, the Court took a closer look at the applicant’s claim that the information he disclosed was information of public interest. Although it agreed that it was (para 43), it found that the disclosure of public-interest information cannot be assessed independently of the duty of confidentiality or of secrecy which has been breached (para 44). To this end, the Court chose to examine whether the criteria it had previously set for cases involving whistleblowing could be applied in the Boronyák case (para 45). Whistleblowing was recently addressed by the Grand Chamber of the ECtHR in Halet v. Luxembourg (paras137-144). In Halet, the Grand Chamber held that the protection of business confidentiality depends on the content of the information disclosed. The information disclosed should to illegal practices or abusive actions by companies in order for the person who discloses said information to be qualified as a whistle-blower and benefit from the protection afforded to this category of persons (Halet, paras 137-144, see discussion here). Applying primarily the above criterion, in Boronyák the Court observed that the applicant had not disclosed information about illegal acts or other reprehensible practices. On the contrary, his disclosure concerned the terms of his contract with the production company M. (paras 42-45). Thus, the applicant could not be classified as a whistleblower.
An issue that should also be mentioned is the ECtHR’s assessment of the proportionality of the fine imposed by the national courts on the applicant. According to the relevant extract from the decision:
in the instant case a penalty was imposed on the applicant in an amount equivalent to approximately EUR 26,000. This sum could appear high in view of the circumstances of the disclosure of the information in question. However, the Court cannot but note that the domestic courts examined the possibility to reduce the penalty…
para 49
In Boronyák we can see that the Court follows its previous jurisprudence. That is to say, it’s decision is based to a significant extent on the assessments carried out by the internal authorities of the member states (for further discussion of this practice in the Court’s case law see here). In Boronyák, the Court considered that the national courts assessed in detail why the HUF 10.000.000 fine should be imposed against the applicant. Arguably, however, the facts suggest that the national courts did not specifically assess the proportionality of the imposed fine which remained exactly as initially imposed. Furthermore, while the Court pointed out that the severity of the penalties imposed must be assessed when examining the proportionality of an interference with a protected right, in the present case it did not carry out a specific assessment of whether the fine in question was proportionate to the appellant’s breach of a contractual term. Instead, as can be seen from para 49 of the judgment in question, the Court confined itself to stating that the amount of the fine imposed on the applicant could be considered high in the circumstances of the case. Nevertheless, as regards the decisive issue of the proportionality of the fine imposed, the ECtHR appeared to leave a wide margin of appreciation to the domestic courts.
With its decision in Boronyák, the ECtHR extended the restrictions imposed on the exercise of the employee’s freedom of speech in cases where the employee is not engaged in a dependent employment contract. The Court used criteria it had already formulated in its jurisprudence for the scope of free expression within an employment relationship to do so. The criteria in question are quite vague, however, and the Court’s interpretation of the scope of the right to freedom of expression in this context is quite narrow. This may have implications for future cases with similar facts.
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