Supreme Court of Canada to decide on Uber Appeal – Is an Arbitration Clause Unenforceable in an Employment Agreement?

During our spring newsletter last year, we noted that the Court of Appeal of Ontario had decided in Heller v. Uber Technologies Inc., [2019] O.J. No. 1, that the arbitration clause found in the independent contractors’ agreements was void  if the contractors were considered to be employees. The reasoning from the Court of Appeal was that such a clause would infringe the Employment Standards Act, 2000 (ESA), and was unconscionable at common law.

The matter was appealed to the Supreme Court of Canada, and was heard on November 6, 2019. In argument, Uber advanced the position that the ESA does not specifically limit a party’s ability to use an arbitration clause and argued that the legislature did not intend to oust arbitration of ESA claims.  They also argued that the Arbitration is not unconscionable based on the current test and that the Court of Appeal erred when it failed to apply the correct test for unconscionability found in Ontario.

Depending on the outcome of this case, there is a possibility that Arbitration clauses within Ontario employment contracts are no longer valid. As the date of the hearing was on November 6, 2019, it will likely take some time for the Supreme Court to render a decision. We will keep you up to date with respect to any final decision on the matter.