The ECJ Erzberger Case: An Analysis of German Co-determination and EU Law

German co-determination law regarding large companies mandates that employees elect half of the members of the Supervisory Board. However, only employees working in Germany are involved in this process, whilst those outside Germany are not. On November 3, 2015, the European Court of Justice received a request from the Appeals Court Berlin for a preliminary ruling in the Erzberger-case, whether this system complies with EU law, specifically the provisions prohibiting discrimination on grounds of nationality (Art. 18 TFEU) and/or restrictions concerning the free movement of employees (Art. 45 TFEU). On July 18, 2017, the European Court of Justice ruled that the current German co-determination system does not violate EU law. In this article, we critically analyse this decision. Furthermore, we explore what the consequences and the options for the German legislator would have been if the ECJ had found that the German system does violate EU law.