Uber’s Arbitration Clauses Upheld

In a recent decision, the Ninth Circuit held that drivers who signed up with Uber under its 2013 and 2014 contracts must resolve their disputes with the company in private, binding arbitration. The court found the contracts’ arbitration provisions enforceable, disagreeing with the trial court on this point. The court emphasized the agreements had opt-out provisions that were not illusory, because some drivers actually used them and exercised their choice not to arbitrate.

Though the decision has other nuances and implications, as far as arbitration opt-outs go it’s a roadmap for parties on both sides:

  • For companies presenting an agreement, including and publicizing a reasonably straightforward way to opt out of binding arbitration is a good idea. It will tip courts toward enforcing your arbitration provisions down the road.
  • For individuals presented with company-drafted contracts containing an arbitration clause — from gig economy workers, to medical patients, to tree trimming customers, to Pokemon Go players — it’s a good idea to look for an arbitration clause, and if it’s there, find the arbitration opt-out instructions and follow them. Preserving your right to a trial doesn’t rule out the ability to arbitrate a dispute if you’d like; the company would probably prefer it.