GDPR: Can an employer be exempt from liability for compensation if the GDPR violation was committed by their employee?

The Court of Justice of the European Union, in the context of Case C-741/21, examined, among other issues, whether a data controller may be exempted from liability for damage compensation by arguing that the breach of Regulation (EU) 2016/679 (hereinafter “GDPR”) was due to an employee’s negligence.

Case Background

The company juris processes customer data both within the context of its legal information database service and for the commercial promotion of its services. GB, a lawyer and client of juris, withdrew any consent he may have given for marketing communications, except for receiving newsletters.

Nevertheless, he received promotional materials at his professional address, prompting him to claim compensation for the damage suffered due to the unlawful processing of his data.

juris argued, among other things, that it had implemented a system for managing objections to direct marketing, and that the reason it failed to respect GB’s objection in time was due to a failure by one of its employees or associates to follow the instructions provided.

The District Court of Saarbrücken (Germany) submitted a series of preliminary questions to the CJEU, including whether it is sufficient for a data controller to be exempted from liability for damages by arguing that the breach resulted from an error by a person acting under the authority of the controller or the processor, within the meaning of Article 29 of the GDPR.

What did the CJEU rule?

Firstly, any data controller is both administratively and civilly liable for the processing activities it performs. This liability extends to persons carrying out processing activities under the controller’s authority, instructions, and supervision—such as employees, agents, or other collaborators.

In general, Article 82(3) of the GDPR provides that a controller may be exempt from liability for damages if they can prove that they are not in any way responsible for the event giving rise to the damage.

However, a controller must ensure the establishment and implementation of appropriate policies and procedures, so that any processing activity carried out by persons under its authority is done strictly within the framework defined by the controller and in accordance with its instructions.

Therefore, an employee’s error (i.e., a person acting under the controller’s authority) implies that the controller failed to ensure the proper implementation of the policies and procedures it adopted. As such, merely providing instructions is not sufficient to exempt the employer from liability in cases where the employee failed to follow those instructions, resulting in a GDPR breach that led to the damage.

Accordingly, employers/data controllers cannot be exempted from liability by simply invoking employee negligence. The employer may only avoid civil liability by proving that there is no causal link between the GDPR violation and the damage suffered by the data subject.

It is therefore clear that compliance with data protection law cannot be achieved merely by the formal adoption of policies and procedures, especially when such measures remain unimplemented or are not communicated to employees.

On the contrary, it is necessary to develop a culture of lawful personal data processing within organizations. This culture must be effectively communicated to employees and partners and be regularly monitored for implementation. Hence, it is of paramount importance both to design policies and procedures tailored to the specific needs of a given controller and to train and raise awareness among employees not only about the general principles of data protection, but especially about these specific internal policies and procedures.

The image was created using the artificial intelligence tool DALL·E.