That doesn’t seem like a shocking proposition, but Uber fought up to the Supreme Court of Canada to argue Canadian courts had no jurisdiction to determine whether it had acted improperly. The Supreme Court of Canada said Uber was wrong. Now a major class action on behalf of drivers can go ahead.
Uber thought it had covered itself when it required drivers to agree that they had to make any claims by going to an arbitration in Europe, leaving them with no access to justice through Canadian courts. A strong majority decision of the Supreme Court of Canada rejected that argument and said the clause was unenforceable.
It said that the clause was unconscionable.
The Court held that the idea of going to arbitration, rather than the courts, is acceptable when it is freely negotiated between the parties. Where unfair bargains are linked to unfair bargaining, however, the courts can protect vulnerable people in the agreements they are given to sign. The courts will look to whether one party to a deal was unable to protect their interests when the person agreed to the terms. The Supreme Court also said Canadian courts can intervene where one party is disadvantaged by terms they did not understand or appreciate. Not every standard contract can be ignored by the courts, but when they are hard to understand and lopsidedly in favour of one party, there is a good chance that some of their terms can’t be enforced.
In the Uber case, a driver would have been required to pay an up-front US$14,500 administration fee just to start the arbitration process. For the driver in question, that was a sizeable percentage of the amount he earned in a year. He would have to use the law of the Netherlands and was left with the impression he would have to go to Amsterdam to argue his case. The Court found that the arbitration clause made any of the driver’s rights unenforceable in the real world.
As a result, the Court said Uber drivers can make their claims in Canadian courts. A proposed $400M claim involving the misclassification of Uber drivers can finally now proceed.