Equal pay claims on the rise: German court finds gender-based discrimination at managing director level

Equal pay litigation in Germany continues to accelerate. Following recent case law from the German Federal Labour Court clarifying the burden of proof in equal pay disputes (see our previous briefing here), the Regional Court of Bochum (the Court) has now issued a noteworthy final judgment that underscores employers’ growing exposure to equal pay claims. The case deserves special attention as it concerns an equal pay claim at managing director level. 

In its decision (ruling of 2 December 2025 – 17 O 56/24 –), the Court awarded a former managing director (Geschäftsführer) EUR 143,000 in backpay. The employer failed to rebut the statutory presumption that the fact that the claimant’s annual base salary was significantly lower than her male co-managing director’s was linked to her gender.

Facts

The claimant, a female (non-shareholding) managing director, was paid EUR 30,000 less than her male colleague per year. She challenged what she viewed as gender-based pay discrimination and brought a claim for backpay. After the employer gave notice to terminate her contract and placed her on garden leave, she sought payment of the salary differential in respect of her entire term of office (2020 to 2024), and her claim succeeded.

Although the two managing directors were responsible for different business units, with the claimant heading up a significantly smaller unit (managing 124 employees and approximately 17% of the company’s total turnover, while her male colleague’s unit oversaw 308 employees and the remaining 83%), the employer was unable to rebut the presumption of discrimination.

The Court’s reasoning

The claim was based on the assertion that the two managing directors’ positions were jobs of equal value, despite the employer’s reference to different areas of responsibilities. This was accepted by the Court. 

The Court awarded the claimant the difference in pay under Art. 157 TFEU in conjunction with section 3 subsection 1 and section 7 of the German Pay Transparency Act (the Act) (EntgTranspG). Both the Act and the EU right to equal pay for work of equal value were considered applicable because the EU law definition of an employee applies which is broader than the traditional German law concept of an employee: under EU law, “external” managing directors of a German limited liability company (GmbH) (i.e. managing directors who do not own a relevant stake in the company) qualify as “employees”. This is consistent with CJEU case law. It is important to note, however, that this employee classification does not extend to members of the management board of a German stock corporation (Aktiengesellschaft), but this point was not material to this case.

Work of equal value 

In assessing whether the claimant and her male colleague performed work of equal value, the Court relied on several factors:

• Both managing directors held service contracts that were identical in all material respects, except for the base remuneration, and both contracts were concluded in May 2020. They had the same powers and deputised for each other during absences.
• According to the job advertisement, the only required qualification was a completed university degree. Their different academic backgrounds were therefore irrelevant.
• As regards the different business units, the Court found no indication that one area required particular qualifications or entailed a significantly different workload (e.g. greater time commitment). Existing differences in background, education and experience were therefore also irrelevant.
• Differences in staff numbers or revenue responsibility did not, in themselves, justify attributing different objective values to the work performed. The Court stated that even leaner or low‑revenue business units are essential for the functioning of overall corporate operations.

No rebuttal of the presumption of gender-based pay discrimination

As work of equal value had been established, the employer bore the burden of proving that there had been no gender-based discrimination in relation to pay (section 22 of the German General Equal Treatment Act (AGG)).

The Court rejected the employer’s argument that differing qualifications and professional experience justified a higher salary for the male managing director. While better qualifications or relevant experience may, in principle, rebut the discrimination presumption, the job description did not make it clear that these criteria were relevant from the employer's point of view. Moreover, the claimant’s lack of prior experience as managing director was offset by her longstanding knowledge of the company, its structure, workforce, and products.

The employer further relied on the division of business responsibilities between the two managing directors. But because this allocation occurred only ten months after the service contracts were signed, a pay disparity agreed earlier as part of the service contracts couldn’t be explained. Nor did any other circumstances suggest that the allocation was intended to justify different remuneration. The Court even noted that the relevant corporate decisions, such as supervisory board approval, could themselves have been influenced (consciously or unconsciously) by gender.

Implications for employers

The ruling is another reminder that employers face increasingly strict scrutiny in equal pay disputes and that equal pay claims are on the rise. Although the decision was issued under national law, it aligns closely with the objectives of the EU Pay Transparency Directive and foreshadows of what is likely to become an increasingly important topic for all employers. Key takeaways include: 

• Service contract symmetry matters: If (standard form) contracts are identical – in particular with regard to the job title and role description – except for remuneration, employers must be prepared to justify differences with robust, objective criteria.
• Job advertisements can become decisive facts: If employers do not specify qualification or experience requirements upfront in their job advertisement, they may not rely on such factors later to justify pay differences.
• The size of a business unit is not a safe harbour: Differences in revenue or employee headcount alone might not suffice to demonstrate that work is not of equal value.

This ruling raises the bar for employers, particularly against the backdrop of the principle recently applied by the German Federal Labour Court that a single comparator person of the other sex performing the same work or work of equal value is sufficient for a presumption of gender-based discrimination (Paarvergleich).

To discuss any of these issues in more detail, please reach out to the authors of this blog post or your usual Freshfields contact. For more blog posts on equal pay and the pay transparency revolution, see here.