The Supreme Court of Canada has ruled that Uber drivers can settle disputes with the company in Canadian courts instead of through costly arbitration overseas, a decision that opens the door for lawsuits against Uber and potentially more driver protections.
In an eight-to-one decision released Friday morning, judges with Canada’s highest court said Uber’s standard employment contract, which requires drivers to settle disputes through arbitration in the Netherlands, is unfair and therefore invalid.
“The arbitration clause [is] unconscionable, based on the inequality of bargaining power between the parties and the improvident cost of arbitration,” the court said.
Uber’s mediation and arbitration process requires and an up-front filing fee of USD $14,500.
This court case was started by Toronto Uber Eats driver David Heller, who tried to launch a class action lawsuit against the company for violating employment standards law.
Friday’s ruling opens the door for that lawsuit to be heard by the court.
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Due to the extensive fees involved in Uber’s overseas arbitration, which represented most of Heller’s annual income at the time, there was a real possibility that Heller’s complaints about the company would never be resolved, the Supreme Court ruled.
“A court should not refer a challenge to an arbitrator’s jurisdiction to the arbitrator if there is a real prospect that doing so would result in the challenge never being resolved,” the judges wrote.