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Court finds costly arbitration clause for freelancer unjust

Published on Nov 03, 2014 Tags: ,
The Dresden regional court has reached a first decision in Eleftheria's case, which the FAU Berlin's foreigners' section has supported through fundraising and advice.

Eleftheria worked as a freelance consultant for a company registered in Dresden but operated out of Dubai. Her boss refused to pay her last month's wage. Eleftheria brought her case to the Dresden regional court in April, arguing that a clause in her contract calling for disputes to be settled in an arbitration court was unfair. Eleftheria would have had to pay more than three months of wages up front to have her case heard at the arbitration court, the German Institute of Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit; DIS).

The Dresden court judge agreed that an arbitration process is unjust if one of the parties cannot pay the fee to begin proceedings. The judge opened up the possibility for Eleftheria to cancel the portion of her contract relating to the arbitration court, but also left the boss the option open to pay for the arbitration hearing himself. Eleftheria's case about the unpaid wages will be heard November 11 2014 by the Dresden court.

Another piece of good news is that the court has accepted her application for legal aid. Eventhough Eleftheria does not live in Germany, the court thus recognized her right to seek justice in Germany despite her low income.

While this is a big victory for Eleftheria, the fact remains that bosses can use such arbitration clauses to try to strip unknowing freelancers of their rights. Anyone can copy and paste such a clause into their contract from the DIS website.

More info about her case:

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