Susan Kootnekoff is the founder of Inspire Law, an Okanagan based-law practice. She has been practicing law since 1994, with brief stints away to begin raising children. Susan has experience in many areas of law, but is most drawn to areas in which she can make a positive difference in people’s lives, including employment law. She has been a member of the Law Society of Alberta since 1994 and a member of the Law Society of British Columbia since 2015. Susan grew up in Saskatchewan. Her parents were both entrepreneurs, and her father was also a union leader who worked tirelessly to improve the lives of workers. Before moving to B.C., Susan practiced law in both Calgary and Fort McMurray, AB. Living and practicing law in Fort McMurray made a lasting impression on Susan. It was in this isolated and unique community that her interest in employment law, and Canada’s oil sands industry, took hold.                                In 2013, Susan moved to the Okanagan with her family, where she currently resides. Photo: Contributed

Susan Kootnekoff is the founder of Inspire Law, an Okanagan based-law practice. She has been practicing law since 1994, with brief stints away to begin raising children. Susan has experience in many areas of law, but is most drawn to areas in which she can make a positive difference in people’s lives, including employment law. She has been a member of the Law Society of Alberta since 1994 and a member of the Law Society of British Columbia since 2015. Susan grew up in Saskatchewan. Her parents were both entrepreneurs, and her father was also a union leader who worked tirelessly to improve the lives of workers. Before moving to B.C., Susan practiced law in both Calgary and Fort McMurray, AB. Living and practicing law in Fort McMurray made a lasting impression on Susan. It was in this isolated and unique community that her interest in employment law, and Canada’s oil sands industry, took hold. In 2013, Susan moved to the Okanagan with her family, where she currently resides. Photo: Contributed

Kootnekoff: Supreme Court of Canada rules clause in Uber’s contract is invalid

Susan Kootnekoff is the founder of Inspire Law, her diverse legal career spans over 20 years.

The Supreme Court of Canada recently released a decision that considered whether a clause in Uber’s contracts is legally valid.

Mr. David Heller, an Uber driver, challenged a provision in Uber’s contract.

To become an Uber driver, Mr. Heller had to accept, without negotiation, the terms of Uber’s standard form services agreement. Under that agreement, Mr. Heller was required to resolve any dispute with Uber through commercial arbitration in the Netherlands.

Mr. Heller and workers like him are low-paid, have no benefits plans or pensions, and do not have statutory entitlements like employment insurance. They cannot easily forgo work, are unlikely to know their rights and, under Uber’s arbitration clause, are unlikely to enforce them.

In 2017, Mr. Heller started a class proceeding against Uber to determine if he and others like him were employees entitled to protection of employment standards legislation.

Uber sought a stay of the proceeding. It contended that Mr. Heller could not proceed in court. It said he was compelled to arbitrate the dispute in the Netherlands.

Mr. Heller asserted that the arbitration clause in Uber’s services agreements is invalid, because it is “unconscionable.” In other words, the clause was unreasonably harsh or unreasonably one sided and therefore ought not to be enforced.

The arbitration process specified in Uber’s contract required up-front fees of US$14,500. Mr. Heller would also have to pay legal fees and other costs. Mr. Heller earns between $400-$600 a week. The fees represent most of his annual income.

The motion judge granted Uber’s request to stay the proceeding. The arbitration clause’s validity was to be referred to arbitration in the Netherlands.

The Court of Appeal allowed Mr. Heller’s appeal. It held that Mr. Heller’s objections to the arbitration clause could be dealt with by a Canadian court. It also found that the arbitration clause was unconscionable, based on the inequality of bargaining power between the parties and the improvident cost of arbitration.

In a 207-page decision, the Supreme Court of Canada dismissed Uber’s appeal.

In response to the argument that only the arbitrator could decide the clause’s validity, Justice Brown stated:

An arbitrator cannot reasonably be tasked with determining whether an arbitration

agreement, by its terms or effects, bars access to that very arbitrator. It therefore falls to courts to do so.

Justice Brown stated that the arbitration clause was unenforceable not because it was unconscionable but because it undermined the rule of law by denying access to justice. It effectively made it impossible for him to seek enforcement of his contractual rights. So, he said it was contrary to public policy.

The majority of the Court stated:

When arbitration is realistically unattainable, it amounts to no dispute resolution mechanism at all. … The arbitration clause is the only way Mr. Heller can vindicate his rights under the contract, but arbitration is out of reach for him and other drivers in his position. His contractual rights are, as a result, illusory.

Based on both the disadvantages faced by Mr. Heller in his ability to protect his bargaining interests and on the unfair terms that resulted, the arbitration clause is unconscionable and therefore invalid.

Interestingly, a number of United States cases revealed that Uber allows drivers there to opt out of the arbitration clause, does not require arbitration in Netherlands and pays the arbitration fees. Uber was waiving the clause elsewhere, but seeking to strongly enforce it within Canada.

This decision confirms that contractual provisions that effectively preclude access to justice are not enforceable. The decision may have further implications beyond the law of contract.

The Supreme Court of Canada’s decision clears the way for Mr. Heller’s sizeable class action to be heard by Canadian courts. If Uber drivers are held to be employees, and not contractors, then they are entitled to be treated as such. This includes entitlements to be paid the minimum wage, as well as overtime, vacation and holiday pay. They will also be entitled to termination pay and reasonable notice of dismissal.

The content of this article is intended to provide very general thoughts and general information, not to provide legal advice. Specialist advice from a qualified legal professional should be sought about your specific circumstances.

If you would like to reach us, we may be reached through our website, at www.inspirelaw.ca.

In case you missed it?

Kootnekoff: B.C. Violated French Education Rights

To report a typo, email:
newstips@kelownacapnews.com
.


@KelownaCapNews
newstips@kelownacapnews.com

Like us on Facebook and follow us on Twitter.

Columnist

Just Posted

Fruit farmers in the Okanagan and Creston valleys are in desperate need of cherry harvesters amid COVID-19 work shortages. (Photo: Unsplash/Abigail Miller)
‘Desperate’ need for workers at Okanagan cherry farms

Fruit farmers are worried they’ll have to abandon crops due to COVID-19 work shortages

Men in a work camp at Mile 46 on the Big Bend Highway. 
(Revelstoke Museum and Archives Photo 2259)
Glimpses of Revelstoke’s past for June 17

Bumper strawberry crop, Mt. Logan climbers and unemployment relief

(File)
‘It’s not going to work here’: Revelstoke mayor to meet province over ambulance changes

There is a new system being introduced across the province called Scheduled On-Call (SOC)

A tent housing a mobile vaccination clinic. (Interior Health/Contributed)
Over 5K jabbed at Interior Health mobile COVID-19 vaccine clinics

The clinics have made stops in more than 40 communities since launching last week

The crosswalk is at Third Street and Mackenzie and was installed on June 17. (Liam Harrap - Revelstoke Review)
Painting a rainbow: First Pride crosswalk installed in Revelstoke

‘It signals to the community that this city is inclusive,’ Mayor Gary Sulz

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed Eli Beauregard facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

The George Road wildfire near Lytton, B.C., has grown to 250 hectares. (BC Wildfire Service)
B.C. drone sighting halts helicopters fighting 250 hectares of wildfire

‘If a drone collides with firefighting aircraft the consequences could be deadly,’ says BC Wildfire Service

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

A dose of the Pfizer-BioNTech COVID-19 vaccine is pictured at a vaccination site in Vancouver Thursday, March 11, 2021. THE CANADIAN PRESS/Jonathan Hayward
NACI advice to mix vaccines gets varied reaction from AstraZeneca double-dosers

NACI recommends an mRNA vaccine for all Canadians receiving a second dose of a COVID-19 vaccine

A aerial view shows the debris going into Quesnel Lake caused by a tailings pond breach near the town of Likely, B.C., Tuesday, Aug. 5, 2014. THE CANADIAN PRESS/Jonathan Hayward
Updated tailings code after Mount Polley an improvement: B.C. mines auditor

British Columbia’s chief auditor of mines has found changes to the province’s requirements for tailings storage facilities

Starting in 2022, the Columbia Shuswap Regional District is extending dog control to the entire Electoral Area D. (Stock photo)
Dog control bylaw passes in Shuswap area despite ‘threatening’ emails

CSRD board extending full dog control in Electoral Area D starting next year

A North Vancouver man was arrested Friday and three police officers were injured after a 10-person broke out at English Bay on June 19, 2021. (Youtube/Screen grab)
Man arrested, 3 police injured during 10-person brawl at Vancouver beach

The arrest was captured on video by bystanders, many of whom heckled the officers as they struggled with the handcuffed man

Most Read