Termination For Breach Of US Regulatory Rules Not Permissible

The New York State Department of Financial Services ("NYDFS") required Commerzbank to terminate the employment of a Germany-based employee on the basis that he played "a central role" in the breaching of US sanctions.

Commerzbank has a subsidiary in New York City, but the employee in question had never worked there. The NYDFS had audited the bank's transactions and found that Commerzbank had carried out US-dollar clearing transactions on behalf of foreign financial institutions (e.g., in Iran and Sudan) which the authority regarded as being in violation of US economic sanction rules.

In a settlement between Commerzbank and the NYDFS ("Consent Order") of 2015, Commerzbank committed to pay a US$1.45 billion penalty, install a monitoring system for banking law violations and terminate the employment relationships of four employees who "played a central role" in these incriminated transactions. The plaintiff was one of those.