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Ontario Court Puts Red Light on Uber Class Action

Heller v Uber raises important questions about Labour and Employment Law, International Law, and arbitration

 

 

Have you ever thought about who Uber drivers are employed by? Are you employing them? Are you in a contractual relationship with them? Do they work for Uber? Some of these issues were addressed in Heller v. Uber.

Tiffany

A proposed class action by Heller, an Ontario Uber driver, has been stayed, in favor of arbitration in the Netherlands.

 

Facts

Heller proposed a class action on behalf of Uber drivers in Ontario. Heller is a 35-year-old driving for Uber in the Toronto area. He earns approximately $400 to $600 on a weekly basis, working 40 to 50 hours per week. He proposed a finding that Uber drivers were employees, not independent contractors. If found in favor of Heller, this would entitle Uber drivers to all benefits outlined to employees under the Employment Standards Act.

 

Uber brought a motion to stay the proceedings. They introduced the terms and conditions that Uber drivers “Agree” to when signing up on the app. This included:

 

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.

This service agreement is therefore governed by the law of the Netherlands and requires arbitration in the event of conflict.

 

Issues

The issues considered in this case included:

  1. Whether the International Commercial Arbitration Act applied to the parties
  2. Whether the Employment Standards Act allowed the matter to be arbitrated. Heller proposed the agreement for Uber drivers was unconscionable and illegal because it relied on arbitration instead of stating that issues ought to be governed by the Act.

 

Holding

Ultimately, Uber successfully stayed the motion in favor of arbitration.

 

The court found that the International Commercial Arbitration Act was the applicable statute. On this point, Heller then submitted that the Act could not apply because the arbitration agreement was not commercial. He continued to allege that his relationship with Uber was an employment relationship. However, the judge sought interpretive aids for this statute and wrote that the word commercial “calls for a wide interpretation” and included relationships such as “carriage of goods or passengers by air, sea, rail or road.”

 

On the issue of whether Uber could contract out of the Employment Standards Act requirements, making the agreement unconscionable, the court considered the three elements of unconscionability: there must be an inequality of bargaining power, a substantially unfair bargain, and the defendant must knowingly be taking advantage of a vulnerable plaintiff. Here, there was found to be an inequality of bargaining power. However, it was not found that there was a substantially unfair bargain in which Uber was knowingly taking advantage of Heller or other drivers by including the arbitration provision in their agreement.

Moreover, there is nothing in the Employment Standards Act that precludes arbitration from being added into agreements in lieu of having the Act apply immediately.

 

What do you think about Uber drivers not being entitled to employment standards? Should they be? What do you think about requiring arbitration to avoid such a large class action?