Supreme Court To Hear Arguments About Enforceability Of Arbitration Clauses

On May 23, 2019, the Supreme Court of Canada granted leave to appeal in Uber Technologies Inc., et al. v. David Heller (the Uber Class Action). At issue is an arbitration clause in the Uber driver service agreement that requires all claims be arbitrated in the Netherlands, regardless of size.

Canadian courts have long enforced arbitration agreements freely entered into, even in contracts of adhesion, subject to legislative restrictions. The Supreme Court's decision has the potential to clarify the extent of exceptions to this principle in the context of contracts where there may be power imbalances. Therefore, the decision may have important implications beyond the employment context in scenarios where the power of the contracting parties may be unequal, but applicable legislation does not preclude mandatory arbitration — for example, consumer contracts (other than in Ontario, where mandatory arbitration clauses are precluded by the Consumer Protection Act) or franchise contracts.

On appeal is the decision of the Ontario Court of Appeal (ONCA) in Heller v. Uber Technologies Inc.,1 where the Court found the arbitration clause to be invalid and unenforceable. In a previous Osler Update, we discussed some of the implications of the ONCA decision as well...