Supreme Court of Canada issues reasons for judgment in Heller v. Uber

On June 26, 2020, the Supreme Court of Canada issued reasons for judgment in Heller v. Uber, an important case about the ability of employers in the “gig economy” to compel their employees to pursue their rights by way of expensive arbitration proceedings.  More particularly, the case concerned the doctrine of unconscionability which, in simple terms, allows a court to refuse to enforce a contract, or provisions of a contract, that are grossly unfair.

Wes McMillan and Greg Allen represented the Community Legal Assistance Society as an intervenor in the case and argued that the doctrine of unconscionability should be broadly understood and focus on the impact of the contract on the weaker party, rather than on whether the stronger party has intentionally taken advantage of the weaker party.

The majority of the Court held that Uber’s contract – which required Uber drivers to bring any complaints by way of arbitration pursuant to the law of The Netherlands, and incur fees of $14,500 just to commence the arbitration – unconscionable.

Of more general importance, the majority provided needed clarity as to how and when the doctrine of unconscionability is to be applied.  As the doctrine of unconscionability can apply to any form of contract, the Court’s decision will be of enduring interest.

A contract will be deemed unconscionable if there is an inequality of bargaining power and an improvident bargain.  The majority rejected the application of a rigid test in favour of a highly contextual analysis to be applied on a case-by-case basis.

Importantly, the majority of the Court recognized that the doctrine of freedom of contract is not sacrosanct and that where the principles underlying it are not present, it will be of less force.  This has particular application to standard form contracts of adhesion which are a practical necessity for participation in modern society. 

Allen / McMillan is pleased to have been able to represent the Community Legal Assistance Society in this important case that not only affects the rights and interests of Uber drivers, but of all Canadians.