Uber heading to the Supreme Court

The fate of the gig economy in Canada is in the hands of the Supreme Court. The saga of David Heller and Uber has been in the news for several months and raises important employment law questions relevant to those working in the gig economy.

History of the Case

This is a class action case brought by representative plaintiff David Heller, an Uber Eats driver. Heller argued, on behalf of Ontario Uber drivers, that they are employees of Uber and entitled to the benefits of the Employment Standards Act, 2000 (ESA).

Uber currently has its drivers enter into a Service Agreement. It characterizes itself as a “lead generation service” and drivers, via the Service Agreement, are able to use the Rider App to pick up those leads.

The litigation in this case so far has been around a clause in the Service Agreement that dictates that conflicts arising from the Agreement will be resolved by arbitration in Amsterdam under the Rules of Arbitration of the International Chamber of Commerce. Here is Article 15 of the Service Agreement, for those of you who are really interested:

Except as otherwise set forth in this Agreement, this Agreement shall be exclusively governed by and construed in accordance with the laws of the Netherlands, excluding its rules on the conflict of laws. The Vienna Convention on the International Sale of Goods 1980 (CISG) shall not apply. Any dispute, conflict or controversy, howsoever arising out of or broadly in connection with or relating to this Agreement, including relating to its validity, its construction or its enforceability, shall be first mandatorily submitted to mediation proceedings under the International Chamber of Commerce Mediation Rules (“ICC Mediation Rules”). If such a dispute has not been settled within sixty (60) days after a request for mediation has been submitted under such ICC Mediation Rules, such dispute can be referred to and shall be exclusively and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce (“ICC Arbitration Rules”) …. The Place of the arbitration shall be Amsterdam, The Netherlands.  

The Service Agreement also states that it is governed by the law of the Netherlands.

The judge in the Superior Court decision decided that the action should not be heard by the court and that the arbitration clause applies.

Ontario Court of Appeal Decision

Mr. Heller appealed this decision to the Ontario Court of Appeal, who decided that the arbitration clause was “unconscionable at common law,” an illegal contracting out of the ESA and therefore invalid. Check out the Court of Appeal decision here or check out Hilary’s comments on this decision in this TVO interview.

The gist of the Court of Appeal’s decision was that there was huge inequality of bargaining power between Uber and the drivers and that it would be practically impossible for an individual driver to exercise their rights under the arbitration provision, which heavily favours the interests of Uber.

The Supreme Court

Where there are larger issues in the Uber case around the status of Uber drivers – namely are they employees and subject to the protections of the ESA or not? – the litigation is not at the stage of answering that question, but instead determining jurisdiction and the enforceability of the arbitration clause.

The Supreme Court of Canada – the highest court in our country – has granted leave to hear Uber’s appeal. This means that they will decide if the Ontario Court of Appeal was correct about the invalidity of the arbitration clause. As with all Supreme Court decisions, their holding will likely have wide implications for contractual alternative dispute clauses, such as this one, and could have broader implications for those working in other areas of the gig economy.  

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