Case In Point
Uber Driver Class Action Stayed Due to Arbitration Clause
Date: February 14, 2018
A recent decision of the Ontario Superior Court provides an important update and clarification on the applicability of arbitration clauses in a case where employment status is challenged. In Heller v. Uber Technologies Inc., the Court stayed a class action filed by a plaintiff on behalf of his fellow class members, Uber Drivers, against Uber and its affiliates. The class alleged that they were employees for the purposes of the Ontario Employment Standards Act, 2000 (ESA).
Justice Perrell ruled that the arbitration clause embedded in the Services Agreement signed by Uber drivers required a stay of the action. That clause stated that all disputes arising from the agreement must be resolved through a mediation and/or arbitration process in Amsterdam, the Netherlands, where portions of Uber are incorporated. Specifically, Uber B.V, which “exploits the intellectual property associated with the Uber Apps around the world,” Rasier Operations B.V, which “licences the Uber Apps” and Uber Portier B.V., which “licences the UberEATS app” are incorporated in Amsterdam.
The Court first faced a question of choosing between upholding the International Commercial Arbitration Act, 2017 or the Arbitration Act, 1991, although the Court also noted that not much turned on this distinction. Ultimately it held that the relationship might resemble a commercial relationship even though it may also be an employment one, and as such the International Commercial Arbitration Act, 2017 applied.
The Court then reviewed in some detail the “competence-competence” principle discussed by the Supreme Court of Canada in Seidel v TELUS Communications, which held that absent specific legislative language to the contrary, courts must enforce arbitration agreements as written. Furthermore, the Supreme Court stated a court should only refuse to apply an arbitration clause where it is clear that the issue in dispute was not within the contemplation of the arbitration agreement.
Following Seidel, Justice Perrell concluded that: 1) because the ESA does not preclude arbitration agreements, the Court should not refuse to stay the action; 2) the challenge to the arbitrator’s jurisdiction should first be resolved by an arbitration in the Netherlands; and 3) it is not unconscionable to prevent employees from pursuing employment-related rights through a court when there is a valid arbitration clause.
