courts, Canada, arbitration clause, Supreme Court of Canada, Ontario Court of Appeal, legislation
Canadian courts have accepted mandatory arbitration clauses as presumptively enforceable unless there is legislation that precludes their application. This position was confirmed by the Supreme Court in Seidel v. TEL US CommunicationsInc. In Heller v. Uber Technologies Inc., the Ontario Court of Appeal considered an arbitration clause in the context of legislation following the approach in Seidel, but the Court also undertook an unconscionability analysis. Reviewing a motion that was granted to stay a class action proceeding in favour of an arbitration clause, the Court unanimously held that the clause was invalid on two separate grounds. First, the arbitration clause amounted to an illegal contracting out ofthe Employment Standards Act. This is an application of the core principle from Seidel. Second, the Court held that the arbitration clause was unconscionable. This is a significant development because it is the first time a Canadian court has held an arbitration clause invalid on the basis of unconscionability.
Peter Quon, "Case Comment: Heller v. Uber Technologies Inc." (2018) 41:2 Dal LJ 585.