German Court Voids Simple Choice-of-Law for Remote Worker

Germany's Federal Labor Court has invalidated a standard German choice-of-law clause in the contract of an employee working permanently from home in the Netherlands. The court held the clause was insufficiently transparent because it failed to disclose that, under the EU’s Rome I Regulation, the employee retains all mandatory protections of the law where they habitually work.

The ruling has immediate, practical consequences for employers with cross-border remote staff. Because the clause was void, the court applied Dutch law—the law of the employee’s location—to the entire relationship. The employer's termination notice, while compliant with German standards, was invalid under stricter Dutch labor laws that prohibit termination during an employee's sick leave and require prior government approval for operational dismissals. The decision serves as a stark warning that simplistic choice-of-law provisions are a significant liability. Companies with employees working remotely from another EU country must now urgently review and likely redraft their employment agreements to explicitly acknowledge that mandatory local-law protections will apply.