Heller v. Uber Class Action – Green Light for Gig Economy Workers

The Supreme Court of Canada released Heller v. Uber earlier today, siding with the employee and allowing the class action to proceed. Monkhouse Law represented an intervenor before the SCC.

Alexandra Monkhouse appearing at the Supreme Court of Canada in Heller v. Uber

Summary (updated 9:59am June 26, 2020):

The Supreme Court majority decision, written by Justices Abella and Rowe found that the arbitration provision was unconscionable because of the financial and logistical barriers imposed by the arbitration provision.

In effect, because there was a strong chance that justice would never be done through the arbitration provision it was set aside.

The Court sets out the test for unconscionability and then applies it. They find that the arbitration provision would be unfair to apply.

While they recognize that arbitrators generally should determine their own jurisdiction it is noted that Courts must be the ones to recognize whether access to an arbitrator is effectively denied by operation of the arbitration clause.

Because they decide that the clause is unconscionable they say that it is not necessary to decide whether it breaches the Employment Standards Act, 2000. Because of this the Ontario Court of Appeal judgment is still binding and at least in Ontario almost every arbitration clause in employment agreements continue to be void.

There is a concurring opinion by Justice Brown which says that the invalidity runs not from unconscionability but from a violation of Rule of Law and access to justice. These were not meaningfully put forward by the Plaintiff in this case. Thus this concurring opinion may open up interesting arguments going forward for counsel who wish to attempt to use access to justice and Rule of Law denial to invalidate contractual terms in the proper future case.

There was a dissent by Justice Côté which would have upheld the arbitration provision.

Some key quotes:

[45]                          While this second question requires some limited assessment of evidence, this assessment must not devolve into a mini-trial. The only question at this stage is whether there is a real prospect, in the circumstances, that the arbitrator may never decide the merits of the jurisdictional challenge. Generally, a single affidavit will suffice. Both counsel and judges are responsible for ensuring the hearing remains narrowly focused (Hryniak v. Mauldin, [2014] 1 S.C.R. 87, at paras. 31-32). In considering any attempt to expand the record, judges must remain alert to “the danger that a party will obstruct the process by manipulating procedural rules” and the possibility of delaying tactics (Dell, at para. 84; see also para. 86).

[49]                          We observe, incidentally, that departing from the general rule of arbitral referral in these circumstances has beneficial consequences. It will prevent contractual drafters from evading the result of this case through a choice of law clause. A choice of law clause could convert a jurisdictional question that would be one of law (and which therefore could be decided by the court) into a question as to the content of foreign law, which would require hearing evidence in order to make findings as to the content of foreign law, something that one would not ordinarily contemplate in a superficial review of the record.

[94]                          The improvidence of the arbitration clause is also clear. The mediation and arbitration processes require US$14,500 in up-front administrative fees. This amount is close to Mr. Heller’s annual income and does not include the potential costs of travel, accommodation, legal representation or lost wages. The costs are disproportionate to the size of an arbitration award that could reasonably have been foreseen when the contract was entered into. The arbitration agreement also designates the law of the Netherlands as the governing law and Amsterdam as the “place” of the arbitration. This gives Mr. Heller and other Uber drivers in Ontario the clear impression that they have little choice but to travel at their own expense to the Netherlands to individually pursue claims against Uber through mandatory mediation and arbitration in Uber’s home jurisdiction. Any representations to the arbitrator, including about the location of the hearing, can only be made after the fees have been paid.

Full Decision:

You can read the full decision at Supreme Court Judgments: Uber Technologies Inc. v. Heller.

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