On June 26, 2020, the Supreme Court of Canada released its decision in the highly publicized case of Heller v Uber Technologies Inc. The case arises from a Toronto-based UberEATS driver’s effort to bring a $400-million class action against Uber, on behalf of Uber and UberEATS drivers in Ontario. Mr. Heller alleged that Uber violated the Employment Standards Act, 2000 by treating Uber and UberEATS drivers as independent contractors and failing to provide them with employment-related entitlements like minimum wage, vacation, and overtime pay.

The issue before the Court was the validity of an arbitration clause in a standard form service agreement. The agreement was governed by the law of the Netherlands and required drivers to litigate their disputes with Uber in the Netherlands. Uber required all of its prospective drivers to enter into this agreement by having them accept the terms through their app. The Court ruled in favor of the drivers, finding that the arbitration clause was unconscionable because its terms effectively made it effectively impossible for the drivers to arbitrate their claims.

As a result of the decision, the class action can proceed to a certification motion.

Key Takeaways

Employers with arbitration clauses in their employment contracts or independent contractor agreements must revisit their agreements to determine whether they continue to be valid in Canada. Based on the Court’s decision, employers should not have arbitration clauses that require employees to pay substantial upfront fees to initiate the process. Employers should also consider whether they should pay the administration fees required for private arbitration, subject to the company’s right to a refund of those fees if it is successful in arbitration. If employers choose to keep arbitration clauses, they should ensure that in-person hearings remain local.


Continue Reading Supreme Court of Canada Invalidates Uber Arbitration Clause in $400-Million Class Action

In its first decision of 2019, the Ontario Court of Appeal has overturned the lower court’s decision in Heller v. Uber Technologies Inc., 2019 ONCA 1. The Court of Appeal held that an arbitration clause requiring arbitration in the Netherlands of disputes between drivers and Uber to be invalid and unenforceable. Based on the presumption that Uber drivers are employees of Uber, the Court of Appeal found that the arbitration clause was a prohibited contracting out of Ontario’s Employment Standards Act, 2000 (ESA).
Continue Reading Ontario Court of Appeal Invalidates Arbitration Clause Requiring Arbitration in Foreign Jurisdiction