Court rules Uber arbitration clause illegal, “Unconscionable”

TORONTO, ON, Jan 2, 2019 – A controversial clause found in Uber’s contracts for its Ontario drivers is illegal, “unconscionable” and “unenforceable”, the Ontario Court of Appeal declared in a decision released today. The Arbitration Clause declares that all legal disputes between Uber and its Ontario drivers are to be heard in the Netherlands, rather than a local court.

In its decision concerning Heller v. Uber Technologies Inc., the Ontario Court of Appeal concluded that “Uber chose this Arbitration Clause in order to favour itself and thus take advantage of its drivers, who are clearly vulnerable to the market strength of Uber” and that the clause “amounts to an illegal contracting out of an employment standard if the drivers are found to be employees.”

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“This decision confirms that employment laws actually matter in Ontario, and that you cannot deprive workers of their legal rights under the Ontario Employment Standards Act by sending them 6,000 km overseas to enforce those rights at exorbitant personal cost,” said Lior Samfiru, founding partner of Samfiru Tumarkin LLP and an employment lawyer representing the plaintiff, David Heller, in the class action lawsuit against Uber. “Legal rights are meaningless if there is no mechanism to enforce those rights. Uber’s contract with its drivers seeks to make the enforceability of rights virtually impossible. The court sent a loud and clear message that this is illegal in Ontario.”

The class action lawsuit filed by employment law firm Samfiru Tumarkin LLP in January 2017 alleges that Uber’s drivers should be classified as employees, rather than independent contractors, and are entitled to minimum wage, overtime, vacation pay and protections provided by the Employment Standards Act. The lawsuit seeks $200 million in damages on behalf of tens of thousands of Ontario residents who have driven for the ride-sharing service since 2012. The plaintiff is represented by lawyers from Samfiru Tumarkin LLP.

In The News

• Toronto Star: Canadian court slams Uber’s arbitration process
• Financial Post: Uber loses court battle over arbitration clause, opening door to driver class action
• CBC News: Proposed class action against Uber can proceed, Ontario appeal court rules

The decision from the Ontario Court of Appeal allows the class-action lawsuit to proceed. It was previously stayed by the Ontario Superior Court of Justice on January 30, 2018.

Read the Ontario Court of Appeal decision, written by Justice Nordheimer, here.