When employers in Japan find themselves in a dispute, in need of vital information, it may be that their former employees hold the key to securing a resolution. A voluntary agreement containing an Assistance in Dispute provision could be helpful in this case. Sayaka Ohashi, Toshishige Fujiwara and Peter Sise of Anderson Mori & Tomotsune take us through the benefits and pitfalls of such a provision.
When a party is preparing for and settling a dispute, its employees may hold vital information. If the employee is still employed by the party, accessing such information will be simple – in principle, the employer may simply instruct the employee to provide it. Unfortunately, disputes often arise several years after the events in question, by which time an employee who has valuable information may have left the employer. In this article, we will briefly look at possible ways to obtain this information, including a provision in an agreement between an employer and its former employee which requires the former employee to provide assistance to the employer in resolving disputes (Assistance in Dispute Provision). This will be done from a Japanese law perspective, but some of the practical points will no doubt be worth considering in other jurisdictions. Obtaining information via a court |
Assistance in Dispute Provisions An Assistance in Dispute Provision, although potentially useful, is an unknown quantity in Japanese law. Similar provisions have been considered outside of Japan. For example, Australian courts have considered a similar provision in agreements transferring causes of action from one entity to another.4 In those cases, the assignor of the cause of action promised to assist the assignee with prosecuting the assigned cause of action. These cases concluded that such a provision is valid if it simply requires general assistance to be provided; however, the provision may be invalid if it suggests that a person must give evidence to a particular effect. An Assistance in Dispute Provision could be useful, provided that some potentially troublesome issues are properly attended to. Derogating from the basic position However, without a reasonable basis, Post-Employment Obligations may be held null and void by the courts. Given that recent court precedents show a tendency to examine the validity of Post-Employment Obligations rather stringently and that Assistance in Dispute Provisions are not a typical example of a Post-Employment Obligation (rather, it is extremely rare in Japan), careful drafting will be required in order to minimize the risk of an Assistance in Dispute Provision being considered null and void. In light of court precedents on the validity of post-employment non-competition agreements, placing certain qualifications on an Assistance in Dispute Provision may be helpful, such as a limitation on the degree of assistance to be provided (eg, only reasonable assistance), the location where the former employee will be required to cooperate (eg, within Japan), and the scope of employees from whom assistance will be required (eg, employees who are likely to have important information, such as those in executive positions). |
Enforceability? Another issue is the enforceability of Assistance in Dispute Provisions. Due to the basic position regarding Post Employment Obligations and the stringent manner in which courts examine them, there is a question as to whether an Assistance in Dispute Provision could be specifically enforced. However, an Assistance in Dispute Provision would still have a certain psychological effect on former employees and be able to serve as a bargaining tool in persuading an otherwise reluctant former employee to assist, particularly if the provision stipulates that compensation is a potential remedy for its breach. This is so even if a party does not go to the lengths of seeking to enforce it. Conclusion Endnotes sayaka.ohashi@amt-law.com To read the ASIAN-MENA COUNSEL article Click Here (Note, if you are using an iPhone or iPad you can also download this article directly to your iBooks after it opens in Google Docs). |
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