COURT FILE NO.: CV-17-567946-00CP DATE: 20220331 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: DAVID HELLER Plaintiff

• and – UBER TECHNOLOGIES INC., UBER CANADA INC., UBER B.V., RASIER OPERATIONS B.V. and UBER PORTIER B.V. Defendants

Michael D. Wright, Danielle E. Stampley, Lior Samfiru and Samara Belitzky for the Plaintiff Linda M. Plumpton, Lisa Talbot, Sarah Whitmore, Davida Shiff, and Alex Bogach for the Defendants

Proceeding under the Class Proceedings Act, 1992

HEARD : In writing

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] This is a certified class proceeding under the Class Proceedings Act, 1992. David Heller and Felicia Garcia are the Representative Plaintiffs. Their action is against Uber Technologies Inc., Uber Canada Inc., Uber B.V., Rasier Operations B.V., and Uber Portier B.V. (collectively referred to as “Uber”). The Plaintiffs represent a class of persons who have entered into Service Agreements with Uber to use software applications (“Uber Apps”) developed and operated by Uber to provide rider transportation and food delivery services. The Plaintiffs submit that Uber has breached its employment contracts with the putative Class Members and contravened Ontario’s Employment Standards Act, 2000.

[2] The action was certified on August 12, 2021. Heller v Uber Technologies Inc, 2021 ONSC 5518.

[3] In an Omnibus Motion and cross-motion, there are three disputes between the parties.

[4] First, there is a dispute between the parties about the content of the Certification Order.

[5] Second, there is a dispute between the parties about whether two questions, one proposed by Uber and the other proposed by the Plaintiffs, should be added to the list of common issues.

[6] Uber seeks to have the following question certified as a common issue:

Is the relationship between the Class Members and Uber one of employer and employee or a commercial relationship in which Uber develops, improves, licenses, and markets technology that the Class Members license and use to provide services to third parties?

[7] The Plaintiffs seek to have the following question certified as a common issue:

Is the Class Action Waiver void because it: (a) is contrary to the Employment Standards Act; (b) contravenes the Class Proceedings Act; (c) is contrary to public policy; and/or (d) lacks consideration?

[8] Third, there is a dispute about the Notice of Certification and the Notice Plan.

[9] In these Reasons for Decision, I address the second of these disputes. For the reasons that follow, I grant Uber’s request to certify an additional question, but I dismiss the Plaintiffs’ request to certify an additional common issue.

B. Factual Background

1. The Already Certified Common Issue

[10] When the action was certified, I certified the following questions as satisfying the common issues criterion:

1. The Court certified the following common issues:

2. Are the Class Members “employees” of the Defendants (or of any Defendant) pursuant to the Employment Standards Act, 2000 (“ESA”)?

3. Are the Defendants (or some of the Defendants) a common employer of the Class Members for the purposes of the ESA?

4. If the answer to (1) is “yes”, are the Class Members in “pensionable employment” of the Defendants (or of any Defendant) pursuant to the Canada Pension Plan (“CPP”)?

5. If the answer to (1) is “yes”, are the Class Members in “insurable employment” of the Defendants (or of any Defendant) pursuant to the Employment Insurance Act (“EI”)?

6. If the answer to (1) is “yes”, are the Class Members outside the scope of the “taxi cab driver” exemption to Parts VIII and X of the ESA because they are not “taxi cab drivers”?

7. If the answer to (1) is “yes”, do the minimum requirements of the ESA with regard to minimum wage, vacation pay, and notice of termination or pay in lieu thereof form express or implied terms of the Defendants’ (or of any Defendant’s) contracts with the Class Members?

8. If the answer to (5) is “yes”, do the minimum requirements of the ESA with regard to overtime pay, public holiday pay, and premium pay form express or implied terms of the Defendants’ (or of any Defendant’s) contracts with the Class Members?

9. If the answer to question (1) is “yes”, do the Defendants (or does any Defendant) owe contractual duties and/or a duty of good faith to: (a) ensure that the Class Members are properly classified as employees; (b) ensure that Class Members’ hours of work are monitored and accurately recorded; (c) ensure that the Class Members are paid the minimum wage; (d) ensure that the Class Members are paid vacation pay; (e) ensure that the Class Members whose services the Defendants terminated without just cause received notice of termination or pay in lieu thereof (“Termination Pay”); and (f) ensure that the Class Members are reimbursed for out-of-pocket expenses paid for gas, insurance, maintenance, parking fines, and/or cell phone data in connection with the use of personal vehicles and/or mobile phones used to perform work for the Defendants (“Out-of-Pocket Expenses”)?

10. If the answer to question (5) is “yes”, do the Defendants (or does any Defendant) owe contractual duties and/or a duty of good faith to: (a) ensure that the Class Members are paid overtime pay for hours worked in excess of 44 hours per week; and (b) ensure that the Class Members are paid public holiday pay and premium pay?

11. Did the Defendants (or any Defendant) breach any of their contractual duties and/or duty of good faith? If so, how?

12. If the answer to (1) is “yes”, did the Defendants (or any Defendant) fail to pay the Class Members minimum wage, vacation pay, and Termination Pay as required by the ESA?

13. If the answer to (5) is “yes”, did the Defendants (or any Defendant) fail to pay the Class Members overtime pay, holiday pay, and premium pay as required by the ESA?

14. If the answers to (3) and/or (4) are “yes”, did the Defendants (or any Defendant) fail to make the prescribed employer CPP and/or EI contributions on behalf of the Class Members?

2. The Relationship between Uber and the Class Members

[11] Uber seeks to add a common question about the nature of the relationship between Uber and the Class Members. To understand why I grant this request, it is necessary to set out what I said at paragraphs 2-10 and 187-196 of my certification decision, which was as follows:

A. Introduction and Overview

1. […]

2. The Plaintiffs describe their proposed class action, which has had a visit to the Supreme Court of Canada about the court’s jurisdiction to decide the dispute, Uber Technologies Inc. v. Heller, 2020 SCC 16 as a conventional misclassification of employment class action. There is, however, nothing routine about it, and it is misdescribed as a misclassification of employment status class action. The proposed class action is better described as a compound classification of employment status class action. The Plaintiffs’ proposed class action raises unique problems of how class actions should adopt to what has been called the “sharing economy” which is animated by information, computer, and Internet technology.

3. In a conventional misclassification of employment status class action, there will be no controversy about whether there is an employer, and the typical issue will be whether the Class Members are working as employees or working for the employer as independent contractors. In either case, the class members will be “working for” the defendant in some capacity. However, in this compound classification of employment status class action, Uber denies that it is the putative Class Members’ employer. This quandary about not only the legal status of the putative Class Members but also of the defendant Uber adds complexities about the commonality of the common issues of fact and law that are the bread-and-butter prerequisite of a certifiable class action.

4. Amongst the proposed class action’s unique features is the unusual circumstance that the proposed class action pits some putative Class Members against others. Both sides called putative Class Members to support their cases. Nine putative Class Members testified. The evidence on the certification motion reveals that the putative Class Members - the persons that the Plaintiffs wish to represent - are divided into two opposing camps and that there also is a third camp of putative Class Members whose members do not yet know which camp to join or who may be indifferent to joining either camp.

5. In the immediate case, the first camp of putative Class Members are persons who would want to be classified as employees “working for Uber.” This camp of putative Class Members would be much assisted in their aspirations for access to justice, if the Plaintiffs were appointed their Representative Plaintiffs, because the fundamental allegation in the proposed class action is the allegation that Uber is the employer of the putative Class Members. If Uber is indeed the first camp’s employer, these putative Class Members would be entitled to the benefits of Ontario’s Employment Standards Act, 2000 and of federal employment protection legislation such as the Canada Pension Plan, and the Employment Insurance Act.

6. In the immediate case, however, the second camp of putative Class Members are persons who do not want to be “working for Uber”. These persons see themselves as “working for themselves.” These putative Class Members do not want to work for Uber as employees or even as independent contractors, although the latter status would be preferable to the former. It is already apparent that this second camp of persons who are using Uber’s technology should opt-out of the proposed class action because they would not wish to disturb the current contractual relationship they have with Uber. They certainly do not wish to be bound by a decision at a common issues trial that they are “working for Uber”. For this second camp of persons, a class proceeding is not access to justice for breach of contract but rather it is interference with their freedom to contract.

7. In the immediate case, the discussion will reveal that there are complexities associated with the commonality of the proposed common issues, which is desired by the first camp of putative Class Members, or the idiosyncrasy of the proposed common issues, which is the position of the second camp of putative Class Members and of the Defendant Uber.

8. In this extraordinary case, the common issues focus on the questions of whether the relationship between Uber and the putative Class Members is that of: (a) service provider and customer; (b) employer and employee; or (c) employer and independent contractor. There is a serious controversy about the commonality or conversely with the idiosyncrasy of the relationship between the parties and this controversy is amplified because the contracts upon which the relationships are based have constantly been changing.

9. In this extraordinary case, the evidentiary record reveals that with numerous Service Agreement amendments, Uber has been striving mightily, but not necessarily successfully: (a) to not be classified as an employer; and also (b) to not have a court decide the Plaintiffs’ proposed class action and rather have the grievances of the putative Class Members referred to arbitrators.

10. This struggle about the court’s jurisdiction led to the parties’ visit to the Supreme Court of Canada, and it continues into this certification motion, and, thus, in addition to seeking certification, the Plaintiffs request that the court rule invalid an Arbitration and Class Action Waiver Clause that Uber introduced into its Service Agreements on August 26, 2020. Uber, however, submits that it took heed of the lessons learned from the Supreme Court’s judgment and the Arbitration and Class Action Waiver Clause is a valid and enforceable arbitration contract and that the putative Class Members who did not opt out of the clause should not be included as Class Members.

Analysis and Discussion: Common Issues Class Criterion

187. As observed at the outset of these Reasons for Decision, the commonality or the idiosyncrasy of the fundamental proposed common issue questions is the major factual and legal battleground of this proposed class action. The contest between the parties is over whether there is some basis in fact for a common issue about whether the relationship between Uber and the putative Class Members is that of: (a) service provider and customer; (b) employer and employee; or (c) employer and independent contractor.

188. The Plaintiffs argue that there is some basis in fact for the commonality of all the proposed common issues that would determine and classify the relationship between Uber users and Uber. The Plaintiffs submit that there is some basis in fact for commonality based on the commonality of: (a) the functionality of the Uber App; (b) standard form service contracts that are not negotiable; and, (c) associated rules of contract performance imposed on Drivers and Delivery People and some external rules and regulations imposed by municipalities on the users of the Uber apps.

189. Uber argues, however, that whatever may be the relationship between Uber users and Uber, there is no basis fact for a finding that there is commonality across the putative Class Members. Uber argues that whatever relationship it has or had with the 366,359 putative Class Members is intrinsically, inherently, and fundamentally idiosyncratic. Uber submits that however the relationship might be classified, the classification would have to be determined on an individual case-by-case basis. Uber therefore submits that there are no common issues and that the common issues and the preferable procedure criteria for certification cannot be satisfied.

190. I will discuss the matter of the preferable procedure criterion later in these Reasons for Decision, but as I have already foreshadowed above, in my opinion, there is some basis in fact for proposed common issues 1 to 13.

191. I come to this conclusion not by putting myself in the position of the common issues judge, which would take me into the forbidden territory on a certification motion of a merits decision, but I rather place myself in the position of determining whether there is some basis in fact for a common issues judge making a determination that would bind all the putative Class Members who did not opt out of the class proceeding.

192. In this regard, based on the voluminous evidentiary record that I have reviewed and considered there is some basis in fact for any of the following answers to the common issue questions, including several answers that would be favourable to the putative Class Members and some that would be favourable to Uber; visualize there is some basis in fact for concluding:

a. In some or all Uber Service Agreements, there was no employment or independent contractor relationships between the Uber App users and Uber and the relationship between Uber users and Uber was of a customer and a service provider. b. In some or all of the Uber Service Agreements, the relationship between Uber App users and Uber is that of independent contractor and employer. c. In some or all of the Uber Service Agreements, the relationship between Uber App users and Uber was or is that of employee and employer. d. In all Uber Service Agreements, it will take a case-by-case analysis to determine whether there was an employment or independent (or dependent) contractor relationship but either relationship is possible depending upon the circumstances of the particular case.

193. Notwithstanding Uber’s arguments to the contrary, there is some basis in fact that there is a genuine dispute about whether the Uber App users are working only for themselves in a shared economy with Uber or are working for Uber as an employee or as an independent contractor.

194. And there is some basis in fact that there is a commonality of evidentiary factors including principally the system and controls imposed by the Uber App and by the associated Service Agreements. All of the putative Class Members used Uber Apps that along with the associated standard form Service Agreements established a business model. A model is a system or thing used as an example to follow or imitate. Synonyms of a model are prototype, stereotype, archetype, version, mold, template, framework, pattern, design, and exemplar. It will be for the common issues trial judge to determine whether the model designed by Uber in the immediate case amounts to an employment relationship or some other kind of relationship, but at this juncture of the proceeding, I am satisfied that there is some basis in fact that there are common issues to determine that will bind all the Class Members.

195. It should be noted that whatever the answers to the common issues there would be a quite robust class proceeding in terms of access to justice for either Uber or for the Class Members. If the answer to the common questions was (a) or (b) as set out in paragraph 192, then Uber would be discharged of liability to up to 366,359 Class Members. If the answer to the common questions was (c) or (d), then Uber would be exposed to liability, but the actions would have to proceed to individual assessments of damages because there is no prospect of an aggregate assessment of damages. While in theory, Uber would be exposed to up to 366,359 claims, the take up of individual assessment trials might be quite small because of the attrition of Class Members who for their own idiosyncratic reasons do not want to be working for Uber or whose own idiosyncratic experience is such that they do not have a provable claim that they were working for Uber or no provable breaches of the Employment Standards Act, 2000.

196. I do not certify the proposed common issues associated with the unjust enrichment and negligence causes of action for the obvious reason that those causes of action do not satisfy the cause of action criterion and while I shall not develop the point, those causes of action would also not satisfy the preferable procedure criteria principally because they would make the class action unmanageable and they are either redundant or derivative of the causes of action that do satisfy the cause of action criterion.

3. The Arbitration and Class Action Waiver Clause

[12] The Plaintiffs seeks to add a common question about the Arbitration and Class Action Waiver Clause that Uber added to its various contracts with its drivers on August 26, 2020 before the certification motion. To understand why I do not grant this request, in addition to paragraphs 2-10 and 187-196 set out above, it is necessary to set out what I said at paragraphs 112-114 and 123-143 of my certification decision, which was as follows:

112. On August 26, 2020, Uber amended the Service Agreements to provide for arbitration and for the Riders and the Delivery People to waive a right to participate in a class action. However, the amendment provided the Riders and the Delivery People for a right to opt out of the Arbitration and Class Action Waiver Clause.

113. The Arbitration and Class Action Waiver Clause provides that: (a) Drivers and Delivery People must resolve all disputes arising out of their relationship with Uber on an individual basis through arbitration, pursuant to the Arbitration Rules of the ADR Institute of Canada, Inc., except that they may bring Employment Standards Act, 2000 complaints to the Ministry of Labour; (b) Drivers and Delivery People are prohibited from participating in or recovering from any collective proceeding; and (c) Drivers and Delivery People can “opt out” of the Arbitration and Class Action Waiver within 30 days by accepting the amendments in the Uber App and then sending an email requesting to opt out to one of three email addresses, depending on the counter party to their Services Agreement. An “opt out” with respect to one Uber entity is ineffective as to other Services Agreement counterparties.

114. The Arbitration and Class Action Waiver Clause is set out below with the notifications provided to the Uber App users.

I. The Significance, if any, of the Arbitration and Class Action Waiver Clause

123. In the immediate case, although the Plaintiffs were not entirely clear about the precise relief that they seek, it appears that in addition to certification of their proposed class action, they ask the court to strike down the Arbitration and Class Action Waiver Clause.

124. The Plaintiffs rely on several cases about the court’s authority under s. 12 of the Class Proceedings Act, 1992 or other procedural mechanisms to act to preserve the integrity of the opt-out process or the prosecution of the class action by making orders regulating the communications made by a defendant to putative Class Members or to Class Members. Del Giudice v. Thompson, 2021 ONSC 2206; Arsalan v. Islamic Republic of Iran, 2021 ONSC 1334; de Muelenaere v. Great Gulf Homes Ltd., 2015 ONSC 7442; Amyotrophic Lateral Sclerosis Society of Essex County v. Windsor (City), 2015 ONCA 572; Fantl v. Transamerica Life Canada, 2009 ONCA 377; Smith v. National Money Mart Co., 2007 13369 (ON SC), [2007] O.J. No. 1507 (S.C.J.); 1176560 Ontario Limited v. The Great Atlantic & Pacific Company of Canada Ltd. (2002), 2002 6199 (ON SC), 62 O.R. (3d) 535 (S.C.J.), affd (2004), 2004 16620 (ON SCDC), 70 O.R. (3d) 182 (Div. Ct.); Pearson v. Inco. (2001), 2001 28084 (ON SC), 57 O.R. (3d) 278 (S.C.J.), leave to appeal refused [2002] O.J. No. 2134 (Div. Ct.); Vitelli v. Villa Giardino Homes Ltd, 2001 28067 (ON SC), [2001] O.J. No. 2119 (S.C.J.). Although those cases are of assistance in the sense that they show that the court has the jurisdiction to control the communications by defendants to putative Class Members or to Class Members, those cases are different than the case at bar and raise different factual and legal questions and these cases focus on Defendants’ communications to Class Members and not substantive orders.

125. In the immediate case, a review of the factual background and of the procedural background, reveals three certainties associated with the Arbitration and Class Action Waiver Clause. First, that Uber does not wish to have its relationship with Drivers and Delivery People to be an employer and employee relationship. Second, that Uber wishes any disputes with Drivers and Delivery People to be arbitrated not litigated. Third, Uber wishes to avoid class proceedings under the Class Proceedings Act, 1992. All those aspirations existed before Mr. Heller commenced his proposed class action against Uber.

126. None of these aspirational certainties are per se illegal. For the immediate case, while Uber cannot contract out of the Employment Standards Act, 2000 - if the Act applies - Uber can contract so that the Act does not apply, and there is nothing per se illegal about contracting parties agreeing to a referral to arbitration. For the immediate case, there is no legislation; for instance, like sections 7 and 8 of Ontario’s Consumer Protection Act, 2002, set out below, that would foreclose resort to arbitration and that would protect the rights of a class member to participate in a class action notwithstanding contractual provisions that would bar participation.

127. In Seidel v. TELUS Communications Inc., 2011 SCC 15 Ms. Seidel signed a standard form TELUS cellular phone services contract. The contract included an arbitration agreement and a waiver of any right to commence or participate in a class action. Nevertheless, Ms. Seidel commenced a proposed class action in British Columbia, and she asserted common law causes of action and also statutory causes of action under British Columbia’s consumer protection statutes. She alleged that TELUS falsely represented to her and other consumers how it calculated time for billing purposes. Relying on the arbitration clause, TELUS applied for a stay of all proceedings. Varying the judgment of the British Columbia Court of Appeal, a majority of the Supreme Court, stayed all the causes of action except one of the statutory causes of action that was available to consumers. The Seidel v. TELUS Communications Inc. demonstrates that courts will enforce agreements designed to resolve disputes by individual arbitration without a class action.

128. Although the Plaintiffs have reasonably strong arguments that the Arbitration and Class Action Waiver Clause (like the original arbitration agreement contained in the Service Agreements) is unenforceable on the grounds that: (a) it offends the principles of contract formation; 77 Charles Street Ltd v. Aspen Ridge Homes Ltd., 2021 ONSC 2732; Georgian Windpower Corp. v. Stelco Inc., 2012 ONSC 3759; Olivieri v. Sherman, 2007 ONCA 491; Consulate Ventures Inc v. Amico Contract & Engineering (1992) Inc., 2007 ONCA 324; Van Kruistum v. Dool, 1997 12284 (ON SC), [1997] O.J. No 6336 (Gen. Div.); Calmusky v. Karaloff, 1946 24 (SCC), [1947] S.C.R. 110; Loranger v. Haines, 1921 520 (ON CA), [1921] O.J. No 203 (C.A.); (b) it is unconscionable; Pearce v. 4 Pillars Consulting Group Inc., 2021 BCCA 198; Uber Technologies Inc. v. Heller, 2020 SCC 16; or (c) it is contrary to public policy, Pearce v. 4 Pillars Consulting Group Inc., 2021 BCCA 198; Heller v. Uber Technologies Inc., 2019 ONCA 1, aff’d 2020 SCC 16; these arguments raise serious genuine issues that require a trial.

129. These arguments cannot be summarily determined on a certification motion, and, moreover, at first blush these arguments would appear to be individual issue determinations that require individual determinations. (If the parties think otherwise, they may apply for an additional common issue.) And, in any event, these arguments do not negate the circumstance that an agreement to arbitrate is not per se illegal.

130. As the procedural history reveals, when this class action commenced Uber attempted to have it stayed for arbitration. However, that gambit failed when the Court of Appeal and the Supreme Court of Canada found the arbitration provision in the Service Agreements to be unenforceable on the grounds of the contractual doctrine of unconscionability.

131. As the factual background above reveals, on August 26, 2020, Uber amended the Service Agreements to provide for arbitration and for the Riders and the Delivery People to waive any right to participate in a class action. However, the amendment provided the Riders and the Delivery People for a right to opt out of the arbitration provision. Uber’s new gambit is not to move for a stay for arbitration for the Riders and Delivery People who have not exercised their right to opt-out of arbitration; rather, the new gambit is to have the class definition exclude those Riders and Delivery People who did not exercise their right to opt-out of arbitration, which would be a right to opt-in (i.e. a right not to opt-out) to the current class proceedings, which was already underway in August 2020.

132. I can safely assume that if I were to amend the class definition, it would gut the class action. However, I shall not do so.

133. Uber is confident that it has addressed all of the contracting elements that led the Court of Appeal and the Supreme Court to hold that the former arbitration agreement was unconscionable. Uber is confident that the August 2020 amendment to the Service Agreements is valid and enforceable. At this juncture, it is not for me to say whether Uber may be overconfident, but I can say that the Plaintiffs raise strong arguments that the notifications to the class were insufficient for them to appreciate the significance of the Arbitration and Class Action Waiver Clause.

134. In any event, the Plaintiffs disagree that the Arbitration and Class Action Waiver Clause is enforceable, and the Plaintiffs submit that what Uber is attempting to do is to interfere with the integrity of the class proceeding and to interfere with the rights of the putative Class Members, including the right to make a decision about opting out of a class proceeding after it has been certified. The Plaintiffs ask the court to strike down the Arbitration and Class Action Waiver Clause for the putative Class Members.

135. However, in my opinion, striking down the Arbitration and the Class Action Waiver Clause for the putative Class Members is none of possible, appropriate, or necessary at this juncture of the proposed class proceeding since I shall not be amending the class definition to exclude the putative Class Members that may be bound by the Arbitration and the Class Action Waiver Clause.

136. Striking down the Arbitration and Class Action Waiver Clause is not possible because the Class Proceedings Act, 1992 is a procedural statute, and it would take a substantive determination not available on a certification motion to strike down a contract term. In the cases where the Court has exercised its jurisdiction under the Class Proceedings Act, 1992 to oversee the proper prosecution and defence of the class proceeding, the focus has been on controlling communications not on making substantive orders.

137. Striking down the Arbitration and Class Action Waiver Clause for the putative Class Members is not appropriate for two reasons. First, the persons for whom the substantive order would be made are just putative Class Members and so no binding order can be made to benefit a class that has not yet been certified. Second, it has not been determined that the enforceability, unconscionability, or legality of the Arbitration and Class Action Waiver Clause is a common or an individual issue.

138. In any event, striking down the Arbitration and Class Action Waiver Clause is unnecessary at this juncture of the proposed class proceeding. Rather, what is necessary is adequate notice of the legal significance, if any, of the Arbitration and Class Action Waiver Clause. The putative Class Members must be provided with sufficient information about the significance of opting out and of not opting out.

139. With respect to necessity, as already foreshadowed above, I shall be certifying this action as a class action. The Class Proceedings Act, 1992 requires that the putative Class Members be given notice of this certification of the action. The Class Members will be informed of their right to opt-out and of the significance of not opting out.

140. In the immediate case, what the putative Class Members need to be told, among other information, is that if they did not opt out of the Arbitration and Class Action Waiver Clause, then should the court determine at the common issues trial that they are employees with rights and should they wish to pursue claims for compensation from Uber at individual issues trials, then they will be met with a defence that they have waived the right to do so in accordance with the Arbitration and Class Action Waiver Clause. The determination of the merits of that defence would be determined at the individual issues trials, unless the enforceability of the Arbitration and Class Action Waiver Clause is made an additional common issue.

141. In the immediate case, once the putative Class Members are fully informed about the Arbitration and Class Action Waiver Clause, they can make a reasoned decision about whether: (a) to opt-out to pursue arbitration; (b) to opt-out to pursue a claim directly under the Employment Standards Act, 2000, which is not precluded by the Arbitration and Class Action Waiver Clause; (c) to not opt-out and wait and see whether there is a successful common issues determination in which case depending on whether they did not opt-out of the Arbitration and Class Action Waiver Clause, they may have to establish that they are not bound by the provision.

142. Further, with respect to necessity of making an order about the Arbitration and Class Action Waiver Clause at this juncture of the class action, it may be noted that should Uber succeed at the common issues trial, then the question of the enforcement of the clause is moot.

143. In the result, I do not propose to do anything at this juncture about the Arbitration and Class Action Waiver Clause.

C. General Principles: Common Issues Criterion

[13] The third criterion for certification is the common issues criterion. For an issue to be a common issue, it must be a substantial ingredient of each class member's claim and its resolution must be necessary to the resolution of each class member's claim. Hollick v. Toronto (City), 2001 SCC 68 at para. 18.

[14] The underlying foundation of a common issue is whether its resolution will avoid duplication of fact-finding or legal analysis of an issue that is a substantial ingredient of each class member’s claim and thereby facilitate judicial economy and access to justice. Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46 at paras. 39 and 40.

[15] An issue is not a common issue if its resolution is dependent upon individual findings of fact that would have to be made for each class member. Fehringer v. Sun Media Corp., [2003] O.J. No. 3918 at paras. 3, 6 (Div. Ct.). Common issues cannot be dependent upon findings which will have to be made at individual trials, nor can they be based on assumptions that circumvent the necessity for individual inquiries. McKenna v. Gammon Gold Inc., 2010 ONSC 1591, [2010] O.J. No. 1057 (S.C.J.), leave to appeal granted 2010 ONSC 4068, [2010] O.J. No. 3183 (Div. Ct.), var’d 2011 ONSC 3882 (Div. Ct.); Nadolny v. Peel (Region), [2009] O.J. No. 4006 at paras. 50-52 (S.C.J.); Collette v. Great Pacific Management Co., 2003 BCSC 332, [2003] B.C.J. No. 529 at para. 51 (B.C.S.C.), var’d on other grounds (2004) 2004 BCCA 110, 42 B.L.R. (3d) 161 (B.C.C.A.). All members of the class must benefit from the successful prosecution of the action, although not necessarily to the same extent. The answer to a question raised by a common issue for the plaintiff must be capable of extrapolation, in the same manner, to each member of the class. Batten v. Boehringer Ingelheim (Canada) Ltd., 2017 ONSC 53, aff’d, 2017 ONSC 6098 (Div. Ct.), leave to appeal refused (28 February 2018) (C.A.); Amyotrophic Lateral Sclerosis Society of Essex County v. Windsor (City), 2015 ONCA 572 at para. 48; McCracken v. CNR, 2012 ONCA 445 at para. 183; Merck Frosst Canada Ltd. v. Wuttunee, 2009 SKCA 43 at paras. 145-46 and 160, leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 512; Ernewein v. General Motors of Canada Ltd., 2005 BCCA 540 (C.A.), leave to appeal to S.C.C. ref’d, [2005] S.C.C.A. No. 545; Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46 at para. 40.

[16] The common issue criterion presents a low bar. 203874 Ontario Ltd. v. Quiznos Canada Restaurant Corp., 2009 23374 (ON SCDC), [2009] O.J. No. 1874 (Div. Ct.), aff’d 2010 ONCA 466, [2010] O.J. No. 2683 (C.A.), leave to appeal to S.C.C. refused [2010] S.C.C.A. No. 348; Cloud v. Canada (Attorney General) (2004), 2004 45444 (ON CA), 73 O.R. (3d) 401 at para. 52 (C.A.), leave to appeal to the S.C.C. ref'd, [2005] S.C.C.A. No. 50, rev'g (2003), 2003 72353 (ON SCDC), 65 O.R. (3d) 492 (Div. Ct.); Carom v. Bre-X Minerals Ltd. (2000), 2000 16886 (ON CA), 51 O.R. (3d) 236 at para. 42 (C.A.).

[17] From a factual perspective, the plaintiff must show that there is some basis in fact that: (a) the proposed common issue actually exists; and (b) the proposed issue can be answered in common across the entire class, which is to say that the Plaintiff must adduce some evidence demonstrating that there is a colourable claim or a rational connection between the Class Members and the proposed common issues. Jensen v. Samsung Electronics Co. Ltd., 2021 FC 1185; Kuiper v. Cook (Canada) Inc., 2020 ONSC 128 (Div. Ct.). The plaintiff must establish some basis in fact for the existence of the common issues in the sense that there is some factual basis for the claims made to which the common issues are connected. Simpson v. Facebook, Inc. 2022 ONSC 1284 at para. 25 (Div. Ct.); Jensen v. Samsung Electronics Co. Ltd., 2021 FC 1185; Singer v. Schering-Plough Canada Inc., 2010 ONSC 42 at para. 140.

D. Uber’s Proposed Additional Common Issue Question

[18] Uber seeks to have the following question be certified as a common issue:

Is the relationship between the Class Members and Uber one of employer and employee or a commercial relationship in which Uber develops, improves, licenses, and markets technology that the Class Members license and use to provide services to third parties?

[19] As set out above, thirteen common issues have been certified. Of these, the primary overarching fundamental question is the first one that asks: “Are the Class Members “employees” of the Defendants (or of any Defendant) pursuant to the Employment Standards Act, 2000 (“ESA”)?

[20] However, it may be noted from my analysis set out above (from paragraphs 2-10 and 187-196 of my certification decision) that a yes or no answer to this question is inadequate to advance the class proceeding because there is some basis in fact for concluding that:

a. In some or all Uber Service Agreements, there was no employment or independent contractor relationships between the Uber App users and Uber and the relationship between Uber users and Uber was of a customer and a service provider. b. In some or all of the Uber Service Agreements, the relationship between Uber App users and Uber is that of independent contractor and employer. c. In some or all of the Uber Service Agreements, the relationship between Uber App users and Uber was or is that of employee and employer. d. In all Uber Service Agreements, it will take a case-by-case analysis to determine whether there was an employment or independent (or dependent) contractor relationship but either relationship is possible depending upon the circumstances of the particular case.

[21] The common issue proposed by Uber recognizes that a yes or no answer to the first common issue does not reflect the outcomes for the class members that may emerge from the common issues trial and subsequent individual issues trials. Interestingly, the Plaintiffs come recognizing the variety of possible outcomes in the Long Notice of the certification decision that they have drafted to be sent to the putative Class Members. In the Long Notice, the Plaintiffs recognize that the possible outcomes are: (a) customers of Uber; (b) independent contractors; or (c) employees of Uber.

[22] The Long Notice states:

If the Class is successful, the existing contractual relationship between Uber and the drivers and delivery people who participate in the class action will be modified. Rather than be classified as customers of Uber or as independent contractors, these drivers and delivery people would be classified as employees of Uber and would be treated as if they were “working for Uber” when using the Uber Apps.

At the Common Issues Trial, the Court could determine one (or a combination of) the following outcomes:

1. the drivers and delivery people (or some of them) are customers of Uber, not employees;
2. the drivers and delivery people (or some of them) are independent contractors, not employees;
3. the drivers and delivery people (or some of them) are employees of Uber; or
4. that for all drivers and delivery people, their employment status cannot be determined in common but will require individual trials.

The Class is claiming damages in respect of Uber’s failure to pay the Class minimum wage, vacation pay, public holiday and premium pay, termination pay, and potentially overtime pay. The Class is also seeking damages in respect of their out-of-pocket expenses incurred while providing transportation and delivery services with the Uber Apps, any adverse tax liability incurred as a result of their misclassification, and unpaid Canada Pension Plan and Employment Insurance Act contributions. The Court has held that the amount of damages owing, if any, will depend on individual assessments, which could take place after the Common Issues Trial.

[23] The common issue proposed by Uber (which has some correctable problems of vagueness) is thus a necessary common issue to reflect the particular circumstances of this class action. It is not a redundant question and it is not a question that is encompassed by the thirteen common issues that have already been certified. Uber lays the foundation for this common question in, amongst other paragraphs, paragraphs 3, 4, 5 of its Statement of Defence, where it pleads:

3. The defendants are part of a group of technology companies that, among other things, develops and licenses computer software applications (defined below as the “Uber Apps”). The Uber Apps form digital marketplaces where providers or sellers of services can connect with consumers of those services. At issue in this litigation are certain of the defendants’ digital marketplaces: its digital marketplace for rideshare services (Rides), and its digital marketplace for meals and food delivery services (Uber Eats).

4. The plaintiff and the members of the proposed class are not, and have never been, Uber employees. Uber’s employees are the tens of thousands of individuals who work to develop, maintain, improve, and market its products and provide related support services. The plaintiff and the proposed class members use the Uber Apps to earn compensation from third party riders or merchants selling food and other items. They do so flexibly and in the time, manner, and location of their choosing. Their individual work circumstances are manifold. They do not provide services to Uber. It is Uber that provides services to them, in exchange for fees.

5. As the services agreements between Uber and the proposed class members explicitly state and accurately reflect, the parties did not intend to, and did not, create an employment relationship. The criteria necessary to establish an employment relationship do not exist here, nor do those criteria have application in the context of this commercial relationship. The plaintiff and the proposed class members made the choice to provide services to riders or merchants using the Uber Apps, and to benefit from the flexibility that using the Apps affords. Uber’s role is to develop, improve, license, and market the technology that the plaintiff and the proposed class members use to provide services to a number of third parties, and to facilitate payments for those services.

[24] I do agree with the Plaintiffs’ submission that the reference in Uber’s proposed common question to a “commercial relationship in which Uber develops, improves, licenses, and markets technology that the Class Members license and use to provide services to third parties” is vague, confusing, and unnecessary. This reference also misses the point that what the Uber App does and how it may be used is just background to the critical issues of: (a) whether the relationship between Uber and Class Member is one of customer, independent contractor, or employee; (b) whether those relationships are mutually exclusive one of the other; and (c) whether the nature of the relationship ultimately has to be determined on a case-by-case basis.

[25] As I parenthetically noted above, these problems of vagueness are correctable. I would therefore redraft the common issue to read as follows, which as it happens reflects the language of the Long Notice prepared by the Plaintiffs:

Is the relationship between the Class Members and Uber one of: (a) customer (purchaser of software) of Uber; (b) independent contractor; or (c) employee and employer?

[26] I am satisfied that this question satisfies the test for a common issue, and I therefore certify it.

E. The Plaintiffs’ Proposed Additional Common Issue Question

[27] The Plaintiffs seek to have the following question certified as a common issue:

Is the Class Action Waiver void because it: (a) is contrary to the Employment Standards Act; (b) contravenes the Class Proceedings Act; (c) is contrary to public policy; and/or (d) lacks consideration?

[28] In my opinion, this question is not certifiable. It is not certifiable because it is not underpinned by any cause of action. The first criterion for certification is that the pleadings disclose a cause of action. The Plaintiffs’ Amended Fresh as Amended Statement of Claim does not disclose a cause of action with respect to the Class Action waiver.

[29] The Plaintiffs’ Amended Fresh as Amended Statement of Claim, pleaded causes of action in: (a) negligence; and (b) unjust enrichment – which were not certified - and (c) that Uber breached its employment contracts with the putative Class Members and contravened Ontario’s Employment Standards Act, 2000, which causes of action were certified. The Plaintiffs’ Amended Fresh as Amended Statement of Claim makes no claim for relief with respect to the Class Action Waiver and there are no material facts pleaded to support allegations that the Class Action Waiver is void because it: (a) is contrary to the Employment Standards Act; (b) contravenes the Class Proceedings Act; (c) is contrary to public policy; and/or (d) lacks consideration.

[30] On a certification motion, the court determines whether there is a cause of action, shared by an identifiable class, from which common issues arise that can be resolved in a fair, efficient and manageable way that will advance the proceeding and achieve the three objectives of class actions. Sauer v. Canada (Attorney General), 2008 43774 (ON SC), 2008 CarswellOnt 5081 (SCJ) at para. 14, leave to appeal refused 2009 2924 (ON SCDC), [2009] OJ No 402 (Div Ct); Bryson v. Canada (Attorney General), 2009 NBQB 175 at para. 22; Brooks v. Canada (Attorney General), 2009 SKQB 509 at para. 75, leave to appeal refused 2010 SKCA 55. In the immediate case, there is no cause of action with respect to the Class Action Waiver that has even been pleaded. Accordingly, the proposed common issue fails the cause of action criterion for certification.

[31] There may be other reasons why the Plaintiffs’ proposed common issue is not certifiable. In this regard, I am unable to do a conventional cause of action analysis in the absence of a cause of action with its material facts having been pleaded.

[32] I, thus, cannot say much about the parties’ respective arguments as to whether the Plaintiffs could have satisfied the cause of action criterion if they had pleaded the material facts for a cause of action.

[33] All I can say at this juncture is that Uber has strong arguments based on the material facts pleaded in the Plaintiffs’ factum for this motion that the cause of action criterion has not been satisfied. Causes of action with respect to contract formation and with respect to setting aside contracts on the grounds of illegality do exist, but in the immediate case, they have not been pleaded, and it is far from clear how these causes of action could be applied to red pencil and extract the Class Action Waiver from a contract that the Plaintiffs otherwise wish to enforce as an employment contract.

[34] Similarly at this juncture, all I can say without deciding the point is that Uber has quite strong arguments that it is plain and obvious that the Class Action Waiver is not void because: (a) it is not contrary to the Employment Standards Act; (b) it does not contravene the Class Proceedings Act and in any event the Class Proceedings Act, 1992 is a procedural statute and not the basis for substantive relief; (c) the Class Action Waiver is not contrary to public policy; and (d) the Class Action Waiver does not want for consideration.

[35] Much the same thing may be said about the common issues, preferable procedure, and representative plaintiff criteria, where Uber has strong arguments that these criteria are not satisfied for the proposed question.

[36] I therefore shall not certify the question proposed by the Plaintiffs about the Class Action Waiver. This means that the enforceability of the Class Action Waiver will not be determined at the common issues trial. However, as I noted in my certification motion decision, Class Members who did not opt out of the Class Action Waiver are still Class Members and may be able to negate the operation of the Class Action Waiver at individual issues trials if the class action gets that far.

[37] I, therefore, recommend that Class Members be informed that if they did not opt out of the Arbitration and Class Action Waiver Clause, then should the court determine at the common issues trial that they are employees and should they wish to pursue claims for compensation from Uber at individual issues trials, then they will be met with a defence that they have waived the right to do so in accordance with the Arbitration and Class Action Waiver Clause. However, they should also be informed that the determination of the merits of that defence will be determined at individual issues trials because there may be a counterargument that the Arbitration and Class Action Waiver Clause is void and not enforceable.

[38] I leave it to Class Counsel to take up this recommendation as they may be advised by seeking amendments to the Long and Short Notices of the Certification of this action.

F. Conclusion

[39] For the above reasons, I dismiss the Plaintiffs’ motion for an additional question, and I grant Uber’s motion for an additional question with costs in the cause.

Perell, J.

Released: March 31, 2022