H17･11･30 at Tokyo Apeal Court

【Judgement】 lawful dismissal

【Company】 Morgan Stanley Japan Limited

【Category 】 disciplinary dismissal

【Reference】 Rodo Hanrei 919-83

【Position/Salary】 ED / JPY 22M

【Summary】

Where an employee files a lawsuit against a third party concerning the employee’s performance in handling financial products, such legal action—save for acts that are deemed purely private—falls within the scope of the employer’s business activities and is therefore subject to the employer’s right of supervision and instruction, as well as to the regulations set forth in company work rules and related internal policies. Consequently, refusal to comply with a business instruction to withdraw such a lawsuit constitutes a violation of those rules and policies.

The plaintiff, who occupies the high position of Executive Director, by refusing to follow the company’s directives and by initiating the aforementioned litigation, has committed a disciplinary violation of extreme gravity; the company’s external credibility has been damaged to a substantial extent; the plaintiff’s stance of non-compliance is clear and untenable, and, from the standpoint of maintaining corporate order, it is impracticable to retain the plaintiff within the organization as is. Accordingly, disciplinary dismissal cannot be regarded as an abuse of the employer’s disciplinary power.