Allen / McMillan argues at Supreme Court of Canada

On November 6, 2019, AMLC’s Wes McMillan and Greg Allen appeared in the Supreme Court of Canada to make submissions on behalf of the Community Legal Assistance Society of British Columbia (“CLAS”) who was granted leave to intervene in the case Heller v. Uber.

The appeal raises important issues concerning arbitration, particularly in the context of employment-like relationships in the modern “gig” economy. 

The online contract to which Uber drivers are required to click “I Agree” provided that any disputes between a driver and Uber must be arbitrated under the law of The Netherlands.  Mr. Heller, an Uber driver, worked exclusively in Ontario.   In order to commence an arbitration, Mr. Heller would be required to pay upfront administrative costs of $14,500 USD.

Mr. Heller commenced a class action proceeding in Ontario for an order that he, and other Uber drivers, are employees under the Ontario Employment Standards Act and for payment of amounts he would have been owed as an employee.

Uber brought an application staying the proceeding in favour of arbitration.  Uber was successful at first instance, but that decision was overturned on appeal to the Ontario Court of Appeal.  Uber appealed that decision to the Supreme Court of Canada.

One of the issues in the case is whether the mandatory arbitration provision is unconscionable and therefore invalid.

CLAS argued that the four-part test for unconscionability needs to be reformulated to reflect modern commercial and employment reality.  The four-part test requires a finding that the weaker party seeking to strike the clause as unconscionable show that the stronger party knowing took advantage of the weaker party’s disability or unique vulnerability.

CLAS argued that this requirement ignores the modern reality that online contracts are agreed to as a matter of course for a number of legitimate reasons that have nothing to do with a disability or vulnerability.  Furthermore, in this context, from the perspective of the stronger party the weaker party is nothing more than an IP address.  Thus, one could never marshal evidence to who the larger party knowingly took advantage of the weaker party.

CLAS argued that the test for unconscionability should return to its historic roots; the weaker party need only show a significant inequality of bargaining power and a grossly improvident bargain. 

AMLC is proud to undertake advocacy work on behalf of organizations like CLAS and is eagerly awaiting the Supreme Court of Canada’s decision on this important issue. We will provide a further update on this case when the decision is released.