We blogged about David Heller and his fight against Uber last May when leave to the Supreme Court of Canada was granted. You can catch up on the history and read that post here. If you’re a true nerd you can also watch footage of the arguments made in the Supreme Court here!  The Supreme Court’s decision has now been released.

A Brief History

Heller, a driver for UberEats, brought a class action suit against Uber in 2017 alleging that he was an employee under the Employment Standards Act, 2000 (“ESA”). Uber, in response to this suit, said that Heller could not sue in Ontario because of the arbitration clause in his contract with Uber. 

The Arbitration Clause

Putting aside the issue of whether Uber drivers are employees – entitled to things like public holiday pay, vacation pay, notice of termination etc. under the ESA – the suit became about the correct forum. Could Heller bring Uber to court in Ontario? Or did the arbitration clause in the contract with Uber apply?

The arbitration clause – which was contained in the standard-form click-through contract drivers agree to in order to become Uber drivers – stated that disputes would be resolved by the International Chamber of Commerce in the Netherlands. 

Starting arbitration under this process would cost about $15,000 USD – about as much as Heller made annually. 

The Lower Court Decisions

The motion judge agreed with Uber and stayed Mr. Heller’s suit. The judge thought that the arbitration clause did mean that Mr. Heller should have brought his dispute to the Netherlands. Heller appealed this decision to the Ontario Court of Appeal who found that the arbitration clause was invalid and unconscionable at common law. They found that asserting their rights under the arbitration clause would be impossible for most Uber drivers. They also found that the clause contracted out of the ESA – should the drivers have been found to be employees the original reason for Heller’s suit. 

The Supreme Court Puts the Matter to Rest 

The Supreme Court agreed with the Ontario Court of Appeal and held that the contract was invalid. The lawsuit could be brought in the Ontario court.

The Supreme Court found the arbitration clause “unconscionable” because of the enormous barriers it presented to any driver looking to assert their right under the contract. 

The Supreme Court did not weigh in on whether the contract also illegally contracted out of the ESA. 

What Now?

Three years later, now that the question of forum has been decided, Mr. Heller and the Uber class can get back to fighting about whether they are independent contractors (as Uber argues they are) or employees (as Mr. Heller would like to be). The employee vs. independent contractor question is an important one that could drastically change the gig economy. If Uber had to pay all drivers vacation pay and public holiday pay would Uber even survive? 

This series of cases also provides clarity on the validity of click-through type contracts. Where one party has no bargaining power, doesn’t understand the contract, and ends up being unable to ever assert their rights under the contract, the contract may be held to be invalid. 

If you have questions about employees vs. independent contractors in your workplace or about setting up contracts generally get in touch for a legal consultation.