Supreme Court Gives Uber's Arbitration Clause Zero Stars, Greenlights Drivers' Employment Class Action

The Supreme Court of Canada recently found that the arbitration provision used by popular ridesharing service, Uber Technologies, Inc. (Uber), in its standard form agreement with its drivers was invalid and unenforceable under the common law doctrine of unconscionability due to the substantial up-front costs associated with commencing an arbitration which effectively prevent drivers from pursuing claims. The decision paves the way for the drivers to pursue a class action in Ontario courts seeking a declaration that they are employees of Uber and relief for breaches of Ontario's Employment Standards Act, 2000 (the ESA). The Court's reformulation of the test for unconscionability may also have wider ranging impacts on standard form contracts, arbitration clauses, class actions and employment law.