Canada: Choose Your Words Wisely: Uber's Arbitration Clause For Employees Rejected By Ontario's Court Of Appeal

Last Updated: February 8 2019
Article by Daniel Wong and Alvin Yau (Student-at-Law)

On January 2, 2019, Nordheimer J.A., writing for a unanimous panel of the Ontario Court of Appeal, released his decision in Heller v Uber Technologies Inc. The Court of Appeal found that Uber's arbitration clause constituted a prohibited contracting out s.5(1) of the Employment Standards Act, 2000 ("ESA") if the company's drivers are found to be Uber employees. The Court of Appeal also held that the terms of the arbitration clause are "unconscionable at common law" and therefore is invalid under s.7(2) of the Arbitration Act.


The plaintiff, David Heller, is a driver who is licensed to use Uber's Driver App and who delivers meals using the defendants' (Uber Technologies Inc., Uber Canada, Inc., Uber B.V. and Rasier Operations B.V., collectively "Uber") UberEATS app.

Mr. Heller commenced a proposed class action seeking, among other things, a declaration that Uber drivers in Ontario are employees of Uber and damages of $400 million. Following the Superior Court of Justice decision, he appealed Perell J.'s order that held that Uber's arbitration clause applied and therefore prevented the plaintiff from commencing a civil action against Uber in Ontario.

An Uber driver must agree to terms of a service agreement that contains an arbitration clause that requires disputes to be resolved under the laws of the Netherlands. The up-front administrative cost of participating in this process is roughly $14,500 USD. Furthermore, each party to a dispute is responsible for its own counsel fees, travel, and other expenses related to participating in the arbitration. As an UberEATS driver, Mr. Heller earns approximately $21,000-$31,000 per year before taxes and expenses.


Nordheimer J.A. analyzed two core issues: (i) whether Uber's arbitration clause amounted to an illegal contracting out of the ESA and is thus invalid and (ii) whether the arbitration Clause was unconscionable and thus invalid on that separate basis.

Uber's arbitration clause illegally contracted out of the ESA requirements

Nordheimer J.A. determined that Uber's arbitration clause constituted an illegal contracting out of the ESA, as it eliminated the right of an Uber driver in Ontario to make a complaint to the Ontario Ministry of Labour against

Uber in respect of possible violations of the ESA.

While the Court of Appeal did not determine whether Uber drivers are legally employees in this decision, it held that this matter "is an important issue for all persons in Ontario...[and] is an issue that ought to be determined by a court in Ontario".

Uber's arbitration clause was unconscionable

The Court of Appeal rejected the lower court's conclusion that "most grievances or disputes between Drivers and Uber can be dealt with by the dispute resolution mechanisms readily available from Ontario and that it will be a substantial dispute that entails arbitration in the Netherlands". According to Nordheimer J.A., the only possible avenue for resolving disputes of any size was arbitration in the Netherlands.

Nordheimer J.A. applied the test under Ontario case law as to whether a contractual provision is unconscionable and held that it was. In particular, he found that:

  1. The arbitration clause represented a "substantially improvident or unfair bargain" since employees must individually, rather than collectively, resolve the matter in the Netherlands.
  2. The appellant did not have any legal or other advice prior to entering into the services agreement nor is it realistic to expect that he would have.
  3. There is a significant inequality of bargaining power between the appellant and Uber.
  4. Uber "knowingly and intentionally" chose this arbitration clause in order to favour itself and thus take advantage of its drivers.


While the proposed class action still remains to be certified, the Court of Appeal's decision means that the question of whether Uber drivers in Ontario are legally classified as employees can be determined in a civil trial.

Interestingly, Nordheimer J.A.'s decision also included the following remarks:

[...] I do not see any reasonable distinction to be drawn between consumers, on the one hand, and individuals such as the appellant, on the other.... Rather, the drivers are individuals who are at the mercy of the terms, conditions and rates of service set by Uber, just as are consumers. If they wish to avail themselves of Uber's services, they have only one choice and that is to click "I agree" with the terms of the contractual relationship that are presented to them.

Recently, a majority of the UK Court of Appeal determined that Uber should treat its drivers as employees rather than self-employed contractors; thus entitling drivers to minimum wage and holiday pay. However, in September 2018, the US Circuit Court of Appeals for the Ninth Circuit (San Francisco) determined that Uber could in fact exercise individual arbitration clauses for disputes with drivers.


This decision reminds employers about the importance of considering how arbitration clauses are written and how they apply in relation to employees. While arbitration clauses may offer efficiency and finality for dispute resolution, the ESA's prescribed minimum standards and common law principles still apply.

Employers will benefit from staying informed, being proactive in reviewing their employment contracts, and consulting legal counsel to advise on compliance with local employment laws.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
24 Oct 2019, Seminar, Toronto, Canada

WeirFoulds’ Commercial Litigation Practice Group is hosting their Fall 2019 Seminar and Networking Reception on October 24, 2019 in Toronto.

28 Oct 2019, Conference, Toronto, Canada
CAN-TECH Law is hosting its annual conference in Toronto on October 28 and 29, 2019. Join our Partner and President of CAN-TECH, James Kosa, and associate and conference committee member, Lisa Danay Wallace, for this exciting event.
28 Oct 2019, Other, Toronto, Canada

Delegates will include CNAR members, provincial and territorial regulatory bodies, other non-profit organizations engaged in regulatory work, federal/provincial/territorial government representatives and others with an interest in regulatory issues.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions