Arbitration Agreement Unconscionable
The two proponents of the appreciation of the unacceptable agreement are (i) unequal bargaining power and (ii) an imprecise windfall. Justices Rowe and Abella, who wrote for a majority of seven judges, accepted the Court of Appeal and dismissed Uber`s appeal. Brown J.A. accepted the result, but contradicted the majority`s scruples analysis, and found that Uber`s arbitration agreement was not valid for public policy reasons. In dissent, Justice Cété focused on contractual freedom and reportedly suspended Mr Heller`s group action in favour of Uber`s conciliation agreement. After working for the company for two years, De Melo filed a wage lawsuit with the California laboratory commissioner. In response, the company filed a petition in court to have the proceedings brought before the Labour Commissioner and for De Melo to be forced into conciliation. The Labour Commissioner intervened and opposed the petition, and the court rejected the petition and found that the conciliation agreement on the subject was unacceptable. The Ontario Court of Appeal set aside Justice Perrell`s decision. In particular, it found that, in the circumstances of this case, a trial court should rule on jurisdiction.
The Court of Appeal found that the arbitration was unacceptable in light of the unequal bargaining power between the parties and the arbitration costs that Mr. Heller would have to bear. One year after he was hired, the employer placed Ajamian in a broker position and asked him to sign an employment contract with an arbitration provision. Under the employment contract, arbitration was the exclusive means of determining all contentious issues related to the agreement. The arbitration decision required arbitration before a New York Arbitration Tribunal. The provision also stipulated that the New York law and the arbitration rules of an alternative dispute resolution organization chosen by the employer, such as AAA or the National Association of Securities Dealers, would be controlled. It prohibits arbitrators from awarding the worker special, exemplary, punitive or multiple damages, but has authorized liquidated compensation to the employer. The employment contract also provided that Ajamian could be held liable for the employer`s legal costs if it entered into the agreement and if the agreement was respected.
The employment contract contained a separation provision that allowed a court to limit a broad provision to make it applicable. The court then found that the arbitration agreement was procedurally unacceptable because it was a necessary clause in a non-negotiable agreement.