On January 2, 2019, the Court of Appeal issued its decision reversing the motion court’s decision to stay a proposed class action on behalf of Uber drivers in Ontario and force the matter into arbitration. The Court of Appeal held that Uber’s arbitration agreement was unenforceable because it violated the Ontario Employment Standards Act and was also unconscionable.
Justice Nordheimer, writing for the Court, determined that the Act prohibited Uber from using the arbitration clause at issue to force class members, who are claiming they are Uber employees, to waive their rights under the Act. The arbitration clause in this case would force drivers into a private and confidential arbitration in the Netherlands under the law of the Netherlands. Justice Nordheimer did not determine whether the drivers are employees, but agreed with the appellant, David Heller, that only an Ontario court could determine whether Ontario employment standards law applies.
Further, Justice Nordheimer held that the arbitration clause was unconscionable because it required drivers to arbitrate their disputes in the Netherlands under the law of the Netherlands according to rules that would require Uber drivers to pay as much as $14,500 in administrative and other fees to initiate and participate in the proceedings. These fees would not cover the cost of travel or legal fees associates with the proceeding. Justice Nordheimer held that Uber’s arbitration clause would effectively prohibit drivers from vindicating their rights in a neutral venue and was therefore unconscionable.
A copy of Justice Nordheimer's decision can be found here.
Cavalluzzo is co-counsel in this action with Samfiru Tumarkin LLP. We are thrilled with result, which was hard fought by David Heller.