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Excellent decision by the Canadian Supreme Court in Uber v Heller.
Uber’s arbitration clause - to deny employee access to courts - in an employment contract was void because it was unconscionable, based on *inequality of bargaining power*.
Judgment here:
https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/18406/index.do
Uber’s arbitration clause - to deny employee access to courts - in an employment contract was void because it was unconscionable, based on *inequality of bargaining power*.
Judgment here:
https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/18406/index.do
67. “Differences in *wealth*, knowledge, or experience may be relevant, but inequality encompasses more than just those attributes...”
82. “Unconscionability has always targeted unfair bargains resulting from unfair bargaining.”
82. “Unconscionability has always targeted unfair bargains resulting from unfair bargaining.”
85. “Parties cannot expect courts to enforce improvident bargains formed in situations of inequality of bargaining power; a weaker party, after all, is as disadvantaged by inadvertent exploitation as by deliberate exploitation.”
93. “There was clearly inequality of bargaining power between Uber and Mr. Heller. The arbitration agreement was part of a standard form contract. Mr. Heller was powerless to negotiate any of its terms. His only contractual option was to accept or reject it.”
“... Mr. Heller, a food deliveryman in Toronto, and Uber, a large multinational corporation.”
95. “The arbitration clause, in effect, modifies every other substantive right in the contract such that all rights that Mr. Heller enjoys are subject to the apparent precondition that he travel to Amsterdam, initiate an arbitration by paying the required fees...”
99. “Given the conclusion that the arbitration agreement is invalid because it is unconscionable, there is no need to decide whether it is also invalid because it has the effect of contracting out of mandatory protections in the ESA.”
This is an extraordinarily good judgment for several reasons.
First, it says unequal bargaining power derives from multiple factors, including "wealth". This is the true basis of the theory, that property drives unequal bargaining power, which itself perpetuates inequality.
First, it says unequal bargaining power derives from multiple factors, including "wealth". This is the true basis of the theory, that property drives unequal bargaining power, which itself perpetuates inequality.
Second, it broadens the unconscionability doctrine to include inequality of bargaining power. This hasn't been done anywhere so explicitly to my knowledge - the German Constitutional Court came close.
Third, it's a vast contrast to the US Supreme Court which has held in a series of appalling decisions, starting with 14 Penn Plaza and AT&T v Concepcion that any statutory right can be sent to an arbitrator appointed by the employer or business. This utter corruption is rejected.
Fourth, Uber loses, again.
Bad luck guys! Time to pay your taxes and give your drivers an customers rights.
Bad luck guys! Time to pay your taxes and give your drivers an customers rights.
Fifth, this makes me think I need to get on and finally finish this article - currently called "Is unequal bargaining power an unjust factor?" After discussion with some fine colleagues, I'm changing the title to "Is unequal bargaining power a vitiating factor?" The answer...
... which I believe the Supreme Court of Canada has given is definitely "yes" - however I think it needs to be seen that this is particularly applicable to structural categories of actor - the worker, consumer, tenant - where unequal power is systemic. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3200512
But it frankly couldn't be a better judgment, and is all the better for drawing upon the work of Mindy Chen-Wishart, Andy Burrows, and Stephen Waddams, among many others.
