In Heller v. Uber Technologies Inc., 2022 ONSC 1997, Justice Perell dismissed a motion to certify as a common issue the enforceability of an Arbitration and Class Action Waiver Clause in the Uber standard form services agreement that members of the class signed. As a result, this issue will not be determined at a common issues trial. Class action members who did not exercise their right to opt out of the clause are still class members and may be able to negate the operation of the waiver at individual issues trials if the class action gets that far.
Background – David Heller provided food delivery services using an Uber driver app, earning several hundred dollars per week. To become a driver, Heller accepted Uber’s standard form services agreement. The agreement included an arbitration clause which directed disputes to be resolved by ICC Arbitration under the laws of The Netherlands. The ICC Rules required substantial up front administration fees and other costs of participation.
In 2017, Heller started a class proceeding against Uber for violations of the Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA”). Uber brought a motion under s. 7, Arbitration Act, 1991, S.O. 1991, c. 17 to stay the proceeding. In Uber Technologies Inc. v. Heller, 2020 SCC 16, the Supreme Court of Canada denied the stay, ruling that the arbitration clause was unconscionable and unenforceable as it made it impossible for drivers to arbitrate claims.
Uber thereafter amended its standard form service agreements and introduced several new terms in a lengthy Arbitration and Class Action Waiver Clause, summarized in part as follows:
- all disputes with Uber, other than ESA complaints, are to be resolved on an individual basis by ADR Institute of Canada arbitration;
- the governing law is the claimant’s province of residence;
- the language of arbitration is English but if the governing law is Quebec’s, the claimant may choose French;
- Uber pays the arbitrator’s fees;
- there is a right to opt out of arbitration within 30-days of accepting the service agreement amendment; and
- class action participation is waived.
Certification – Justice Perell certified the Heller class action for causes of action of breach of contract and breaches of the ESA: Heller v. Uber Technologies Inc., 2021 ONSC 5518. He noted there were opposing camps of putative members, some of whom are persons wanting to be classified as “working for Uber”, some whom do not, some whom do not know, and others who are indifferent. He described the circumstances as unique, unusual, and extraordinary.
The Plaintiffs maintained the Arbitration and Class Action Waiver Clause should be struck as unenforceable. Justice Perell reviewed the clause:
“ In the immediate case, a review of the factual background and of the procedural background, reveals three certainties associated with the Arbitration and Class Action Waiver Clause. First, that Uber does not wish to have its relationship with Drivers and Delivery People to be an employer and employee relationship. Second, that Uber wishes any disputes with Drivers and Delivery People to be arbitrated not litigated. Third, Uber wishes to avoid class proceedings under the Class Proceedings Act, 1992. All those aspirations existed before Mr. Heller commenced his proposed class action against Uber.
 None of these aspirational certainties are per se illegal. For the immediate case, while Uber cannot contract out of the Employment Standards Act, 2000 – if the Act applies – Uber can contract so that the Act does not apply, and there is nothing per se illegal about contracting parties agreeing to a referral to arbitration. For the immediate case, there is no legislation; for instance, like sections 7 and 8 of Ontario’s Consumer Protection Act, 2002, set out below, that would foreclose resort to arbitration and that would protect the rights of a class member to participate in a class action notwithstanding contractual provisions that would bar participation.
 Although the Plaintiffs have reasonably strong arguments that the Arbitration and Class Action Waiver Clause (like the original arbitration agreement contained in the Service Agreements) is unenforceable on the grounds that: (a) it offends the principles of contract formation; (b) it is unconscionable; or (c) it is contrary to public policy, these arguments raise serious genuine issues that require a trial.”
He noted that Uber had amended its standard form service agreement since it was held to be unconscionable by the Supreme Court of Canada :
“ As the factual background above reveals, on August 26, 2020, Uber amended the Service Agreements to provide for arbitration and for the Riders and the Delivery People to waive any right to participate in a class action. However, the amendment provided the Riders and the Delivery People for a right to opt out of the arbitration provision. Uber’s new gambit is not to move for a stay for arbitration for the Riders and Delivery People who have not exercised their right to opt-out of arbitration; rather, the new gambit is to have the class definition exclude those Riders and Delivery People who did not exercise their right to opt-out of arbitration, which would be a right to opt-in (i.e. a right not to opt-out) to the current class proceedings, which was already underway in August 2020.”He determined that it was not possible, appropriate, or necessary to strike down the Arbitration and Class Action Waiver Clause at the certification stage.
The parties subsequently disputed the terms of certification, leading to further certification rulings, including Heller v. Uber Technologies Inc., 2022 ONSC 1997, which considered the following common issue: Is the Class Waiver void because it: (a) is contrary to the ESA; be contravenes the Class Proceeding Act; (c) is contrary to public policy; and/or (d) lacks consideration?
Justice Perell determined that the question was not certifiable because it the pleadings did not disclose a cause of action with respect to the Class Action waiver. :
“ I therefore shall not certify the question proposed by the Plaintiffs about the Class Action Waiver. This means that the enforceability of the Class Action Waiver will not be determined at the common issues trial. However, as I noted in my certification motion decision, Class Members who did not opt out of the Class Action Waiver are still Class Members and may be able to negate the operation of the Class Action Waiver at individual issues trials if the class action gets that far.
 I, therefore, recommend that Class Members be informed that if they did not opt out of the Arbitration and Class Action Waiver Clause, then should the court determine at the common issues trial that they are employees and should they wish to pursue claims for compensation from Uber at individual issues trials, then they will be met with a defence that they have waived the right to do so in accordance with the Arbitration and Class Action Waiver Clause. However, they should also be informed that the determination of the merits of that defence will be determined at individual issues trials because there may be a counterargument that the Arbitration and Class Action Waiver Clause is void and not enforceable.”
The Supreme Court of Canada’s landmark decision in Uber Technologies Inc. v. Heller, 2020 SCC 16, is the starting place for review of this complex dispute. See previous Case Note: Supreme Court – courts should not refer jurisdiction challenge to arbitrator if real prospect that challenge might never be resolved – #344.
The Heller class action has led to several, interrelated decisions rendered in recent months. The following summary will assist navigation through these cases.
The principle class action ruling is the certification decision, Heller v. Uber Technologies Inc., 2021 ONSC 5518. Followers of the Supreme Court of Canada decision can review the full terms of Uber’s revised Arbitration and Class Action Waiver Clause at para 114.
Following certification, Justice Perell considered an omnibus motion and cross motion relating to the terms of certification. The number of court orders required was itself the source of party conflict. Justice Perell resolved the motions in three decisions, which he identified as First Dispute, Second Dispute, and Third Dispute.
The First Dispute was, in Justice Perell’s view, a controversy of the piffle category: Heller v. Uber Technologies Inc., 2022 ONSC 1996. Phrasing was added to the Certification Order: damages were to be calculated and assessed on an individual basis, as requested by Uber.
The Second Dispute is considered in this Case Note―the Plaintiffs’ proposed common issue question was denied: Heller v. Uber Technologies Inc., 2022 ONSC 1997. However, Justice Perell did certify a common issue question proposed by Uber: whether the relationship between Class Members and Uber was one of employer and employee or a commercial relationship.
The Third Dispute concerned the Notice Plan and language of the Notice of Certification: Heller v. Uber Technologies Inc., 2022 ONSC 1998. Justice Perell underscored that it was necessary for Class Members to make informed decisions about whether they should opt out, noting this was not an everything to gain but nothing to risk class action. He accepted the Notice Plan and Notice of Certification content additions proposed by Uber.