JAMES S. GWIN, UNITED STATES DISTRICT JUDGE.
Plaintiff Ladon Bruster brings Ohio wage and labor law claims against Defendants Uber Technologies Inc. and its subsidiary, Rasier, LLC (collectively, "Uber").
On July 30, 2014, Plaintiff Bruster activated his Uber account and began work as an Uber driver.
On July 31, 2014, Plaintiff accepted the June 2014 Agreement. The Agreement contained the prominent class action waiver, arbitration and delegation provisions.
Although the Agreement had given the Plaintiff the ability to opt out of the arbitration provision, Plaintiff Bruster did not
On November 27, 2015, Defendants deactivated Plaintiff's Uber account because of "continued unsatisfactory customer experiences."
After Uber ended Plaintiff's Uber account, on December 11, 2015, Uber rolled
On December 21, 2015, Plaintiff Bruster filed this lawsuit. On March 25, 2016, Defendants moved to dismiss the case and compel arbitration. Defendants say that the June 2014 Agreement's delegation provision requires an arbitrator — not this Court — to determine the enforceability of the arbitration provision. Uber also says that the June 2014 Agreement gave the arbitrator, but not this Court, authority to address the merits of Plaintiff's claims. Defendants also say that the arbitration provision is itself valid and therefore requires arbitration of Plaintiff's claims.
With his opposition, Plaintiff says that he opted out of the June 2014 arbitration and delegation provisions by accepting the December 11, 2015 Agreement and sending an opt-out notice. Plaintiff also says that the June 2014 Agreement arbitration provisions are unconscionable and therefore unenforceable.
The Federal Arbitration Act, 9 U.S.C. § 1 et seq., ("the FAA") governs arbitration and delegation disputes. Section 4 authorizes a district court to compel parties to arbitrate if the district court finds that the parties entered a valid and enforceable arbitration agreement that covers the dispute.
Section 2 of the FAA says that arbitration provisions "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."
District courts consider challenges to the validity of an arbitration provision independently from the rest of an agreement.
District "[c]ourts are to examine the language of the contract in light of the strong federal policy in favor of arbitration. Likewise, any ambiguities in the contract or doubts as to the parties' intentions should be resolved in favor of arbitration."
Parties may delegate gateway issues of arbitrability to the arbitrator.
District courts sitting in diversity apply the choice of law rules of the forum state.
The parties entered into a valid agreement when Plaintiff accepted the June 2014 agreement and started driving using the Uber app. Plaintiff could have opted out of the arbitration and delegation provisions by August 30, 2014, but did not. Therefore, the arbitration and delegation provisions applied from July 31, 2014 — the day Plaintiff accepted the June 2014 Agreement — onward.
Plaintiff's purported "acceptance" of the December 2015 agreement and purported "opt-out" of the December 2015 arbitration and delegation provisions are not valid. First, the December 2015 Agreement is not an enforceable agreement between the parties.
The appearance of the December 2015 Agreement on Plaintiff's phone is insufficient to show that Defendants were making an offer to Plaintiff. Defendants had already deactivated Plaintiff's account, and there is no indication that Defendants intended the December 2015 agreement to reach Plaintiff. Absent an offer, there is no contract formation.
Furthermore, there was no consideration to support Plaintiff's purported acceptance. Because Defendants deactivated Plaintiff's account, Plaintiff could not connect with potential passengers through the Uber App at the time Plaintiff tried to accept the December 2015 Agreement and could not get any business through Uber.
Because there was no new agreement to replace the June 2014 Agreement, the arbitration and delegation provisions of the June 2014 Agreement apply.
The parties agreed to submit arbitrability questions to an arbitrator, not to the Court. The June 2014 Agreement says:
Plaintiff argues that the June 2014 arbitration and delegation provisions are unconscionable and unenforceable. This argument loses.
Ohio law applies to determining the validity of this contract. The June 2014 arbitration and delegation provisions do not have a choice of law clause. Ohio has "the most significant relationship to the contract": Plaintiff resided in Ohio, Plaintiff accepted the June 2014 agreement in Ohio, and Plaintiff provided services in Ohio to passengers using the Uber App.
Under Ohio law, a contract provision is unconscionable only if it is both procedurally and substantively unconscionable.
The delegation provision is not procedurally unconscionable.
Uber may have had a stronger bargaining position relative to Plaintiff. Defendants drafted the June 2014 Agreement.
However, the terms of the June 2014 Agreement allow Plaintiff to opt out of the delegation provision without any consequences or changes in the parties' employment relationship.
Because Plaintiff does not show procedural unconscionability in the formation of the June 2014 delegation provision, the provision is valid and enforceable under Ohio law. Since Plaintiff needs to show both procedural and substantive unconscionability to make the provision unenforceable, this Court does not address the substantive unconscionability of the June 2014 delegation provision.
Because the June 2014 delegation provision is valid, this Court does not decide whether the arbitration provision is enforceable. The June 2014 delegation provision delegates issues of arbitrability to the arbitrator, not the Court. This Court does
For the above reasons, this Court
IT IS SO ORDERED.