Uber Technologies Inc v Heller

Uber Technologies Inc v Heller, 2020 SCC 16, is a 2020 decision of the Supreme Court of Canada. The Court held 8–1 that an arbitration clause in a contract the plaintiff David Heller had signed with Uber was unconscionable, and hence unenforceable. As a result, it held that Heller's proposed class action lawsuit against Uber could go forward.

Uber Technologies Inc v Heller
Supreme Court of Canada
Supreme Court of Canada
Hearing: November 6, 2019
Judgment: June 26, 2020
Full case nameUber Technologies Inc, Uber Canada, Inc, Uber BV and Rasier Operations BV v David Heller
Citations2020 SCC 16
Docket No.38534 [1]
Prior history2019 ONCA 1 (judgment for Heller)
2018 ONSC 718 (judgment for Uber)
RulingAppeal dismissed
Holding
Arbitration clause in contract between Heller and Uber unconscionable
Court membership
Chief JusticeRichard Wagner
Puisne JusticesRosalie Abella, Michael Moldaver, Andromache Karakatsanis, Suzanne Côté, Russell Brown, Malcolm Rowe, Sheilah Martin, Nicholas Kasirer
Reasons given
MajorityAbella and Rowe JJ (Wagner CJ and Moldaver, Karakatsanis, Martin and Kasirer JJ concurring)
ConcurrenceBrown J
DissentCôté J

Facts

David Heller, an Uber Eats driver, claimed the right to be paid the minimum wage of CA$14 an hour, overtime and vacation pay under Ontario's Employment Standards Act along with other colleagues in a class action. To have these rights, Heller and others needed to be classified as "employees". Heller had a standard form contract with Uber, which stated that he was an independent contractor, and that any dispute needed to go to arbitration in the Netherlands, according to the rules of the International Chamber of Commerce.[2] This would have cost around US$14,500.[3] The claims of the class as a whole totalled approximately CA$400 million.[4] Heller argued that the arbitration clause was not binding, and voidable because it was unconscionable based on the unequal bargaining power between him and other drivers and Uber. Uber contended that its contract should be enforced, no matter what its terms.

Judgment

Lower courts

Uber brought a motion to stay Heller's class action pending resolution of arbitration in the Netherlands.[2] The Ontario Superior Court of Justice, the court of first instance in the action, granted the stay.[2]

The Court of Appeal for Ontario reversed the motion judge's decision, holding that the contract which purported to require arbitration was unconscionable.[2] According to Peter Quon, the Court of Appeal's decision was the first in which a Canadian court had found an arbitration clause unconscionable.[5]

Supreme Court

In an 8–1 decision, the Supreme Court of Canada held that the arbitration clause in Heller's contract with Uber was unconscionable.[6] Further, the majority held that the contract was void because it attempted to contract out of the Employment Standards Act. As a result, the Court allowed Heller's class action lawsuit against Uber to proceed to trial. Justice Russell Brown, in a concurring opinion, argued that the arbitration clause was unenforceable because it effectively denied Heller access to justice and was therefore contrary to public policy.[7]

Uber Technologies did not settle the question of whether Heller and other members of the proposed class were in fact employees. Rather, it established only that the arbitration clause in Heller's contract with Uber was unenforceable in Ontario, and that Heller could pursue his complaint against Uber in Ontario courts.[3]

Significance

Uber reacted by saying it would amend its contracts to align with the court’s principles, and that: “Going forward, dispute resolution will be more accessible to drivers, bringing Uber Canada closer in line with other jurisdictions".[8]

According to Michael Geist, a professor at the University of Ottawa Faculty of Law, Uber Technologies will influence the use of arbitration clauses in online contracts generally.[4] Professor Jassmine Girgis of the University of Calgary Faculty of Law argued that the version of the doctrine of unconscionability adopted in Uber Technologies is too expansive, and does not provide sufficient guidance to lower courts.[9] Professor Alan Bogg of the University of Bristol, calling Uber Technologies a "momentous victory" for Heller, suggested that the decision "represents a powerful countermovement against the use of arbitration clauses in employment contracts".[7] Assistant Professor Tamar Meshel of the University of Alberta Faculty of Law argued that the decision may have implications "for arbitration agreements contained in international contracts—particularly standard form contracts—that might give rise to employment disputes, such as those in the gig economy, or that contain terms that may seem to bar a party’s access to the arbitral process".[10]

Notes
  1. SCC Case Information - Docket 38534 Supreme Court of Canada
  2. Starks, Katherine (November 4, 2019). "Unconscionability of Mandatory Arbitration in Contracts of Adhesion: Heller v Uber Technologies Inc". Saskatchewan Law Review.
  3. Beazley, Doug (June 30, 2020). "Uber unconscionable". National Magazine. Canadian Bar Association. Retrieved September 17, 2020.
  4. Blatchford, Andy (June 26, 2020). "Supreme Court of Canada decision clears way for planned C$400M lawsuit against Uber by its drivers". Politico. Archived from the original on June 28, 2020. Retrieved September 17, 2020.
  5. Quon, Peter (October 2018). "Case Comment: Heller v Uber Technologies Inc". Dalhousie Law Journal. 41 (2): 585–586. ISSN 0317-1663. Archived from the original on September 22, 2020. Retrieved September 17, 2020.
  6. Stefanovich, Olivia (June 26, 2020). "Supreme Court sides with Uber drivers, opening door to $400M class-action lawsuit". CBC News. Archived from the original on September 19, 2020. Retrieved September 17, 2020.
  7. Bogg, Alan (July 19, 2020). "Uber v Heller and the Prospects for a Transnational Judicial Dialogue on the Gig Economy – I". Oxford Human Rights Hub. Faculty of Law, University of Oxford. Archived from the original on September 3, 2020. Retrieved September 17, 2020.
  8. Mojtehedzadeh, Sara (June 26, 2020). "Supreme Court of Canada's ruling paves the way for $400M class-action lawsuit by Ontario Uber drivers". Toronto Star. Archived from the original on August 8, 2020. Retrieved September 17, 2020.
  9. Girgis, Jassmine (July 23, 2020). "The Expansion of Unconscionability – The Supreme Court's Uber Reach". ABlawg. University of Calgary Faculty of Law. Archived from the original on August 18, 2020. Retrieved September 17, 2020.
  10. Meshel, Tamar (August 30, 2020). "International commercial arbitration in Canada after Uber Technologies Inc v Heller". Arbitration International. 37: 361–386. doi:10.1093/arbint/aiaa036. ISSN 0957-0411.

Further reading
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