{"id":8975,"date":"2022-07-20T11:10:54","date_gmt":"2022-07-20T15:10:54","guid":{"rendered":"https:\/\/360mediations.com\/en\/?p=8975"},"modified":"2022-07-20T11:10:56","modified_gmt":"2022-07-20T15:10:56","slug":"judges-will-defer-questions-on-the-validity-of-an-arbitration-clause-in-an-employment-contract-to-the-arbitrator","status":"publish","type":"post","link":"https:\/\/360mediations.com\/en\/judges-will-defer-questions-on-the-validity-of-an-arbitration-clause-in-an-employment-contract-to-the-arbitrator\/","title":{"rendered":"Arbitrators, and Not the Courts, Typically Rule on the Validity of an Arbitration Clause in an Employment Contract"},"content":{"rendered":"\n

This recent case highlights that when a party to an employment contract wants to challenge the validity of an arbitration clause, this issue is typically argued before the arbitrator, and not a judge who, except in rare circumstances, lacks jurisdiction once the contract stipulates that all disputes will be resolved through arbitration.<\/p>\n

In this instance, the fired employee brought a claim and a motion before the court to quash the arbitration clause on the grounds that it was unconscionable because it denied a claim for costs and for punitive damages, and because it was inconsistent with the Employment Standards Act, 2000<\/a><\/em>, S.O. 2000, c. 41<\/a> (\u201cESA<\/a><\/em>\u201d), and the Human Rights Code<\/a><\/em>, R.S.O. 1990, c. H.19<\/a> (\u201cHRC<\/a><\/em>\u201d).<\/p>\n

The motion judge held the validity of the arbitration clause was itself a matter for arbitration and stayed the action under s. 7(1)<\/a> of the Arbitration Act<\/a><\/em>,<\/a> 1991<\/a><\/em>, S.O. 1991, c. 17<\/a>.\u00a0 The Ontario Court of Appeal agreed, citing that the ruling was consistent with the general rule in Dell Computer Corp. v. Union des consommateurs<\/em>, 2007 SCC 34<\/a>, [2007] 2 S.C.R. 801, at para. 84<\/a>, that \u201cin any case involving an arbitration clause, a challenge to the arbitrator\u2019s jurisdiction must be resolved first by the arbitrator.\u201d<\/p>\n

The appellate court did recognize that there are exceptions as laid out in Uber Technologies Inc. v. Heller<\/em>, 2020 SCC 16<\/a>, 447 D.L.R. (4th<\/sup>) 179 (\u201cUber Technologies<\/strong>\u201d), where the court at para. 32<\/a> pointed out that there were two exceptions to the general rule that the court should refer all challenges to an arbitrator\u2019s jurisdiction to arbitration, as follows: (1) the challenge raises pure questions of law; or (2) the challenge raises questions of mixed fact and law (i) requiring only superficial consideration of the evidence and (ii) where the court is convinced the challenge is not a delaying tactic or will not prejudice recourse to the arbitration.<\/p>\n

The appellate court concluded that nothing about the plaintiff\u2019s challenge required a \u201csuperficial consideration of the evidence.\u201d\u00a0 Indeed, it was the exact opposite.\u00a0 The plaintiff\u2019s argument regarding unconscionability was a \u201cprobing factual inquiry\u201d that would depend on factual findings, including findings of credibility, effectively turning the motion before the court into a mini-trial, all of which is the antithesis of a \u201csuperficial consideration.\u201d<\/p>\n

Although the Uber Technologies case enumerated an exception that would allow the courts to intervene, it is clear that the underlying facts in Uber Technologies was the driving force.\u00a0 In Uber Technologies, the plaintiffs were arguably very disadvantaged: they had to click on a standard form services agreement, they didn\u2019t receive legal advice, they had no opportunity to negotiate the agreement, they were made subject to the law of the Netherlands with arbitration to take place in the Netherlands, and they were required to pay a fee of $14,500 USD just to begin the arbitration. \u00a0In contrast, the plaintiff in this recent case was a professional earning a base salary of $350,000, claiming over $1.5 million in damages, facing arbitration in Ontario under Ontario law, and she had the assistance of legal counsel during the negotiation of the employment agreement. \u00a0It is not surprising that the appellate court would resist the invitation to accept jurisdiction over a case governed by an arbitration clause in these circumstances.<\/p>\n

Irwin v. Protiviti<\/em><\/strong>, 2022 ONCA 533<\/p>\n

https:\/\/www.canlii.org\/en\/on\/onca\/doc\/2022\/2022onca533\/2022onca533.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This recent case highlights that when a party to an employment contract wants to challenge the validity of an arbitration clause, this issue is typically argued before the arbitrator, and not a judge who, except in rare circumstances, lacks jurisdiction once the contract stipulates that all disputes will be resolved through arbitration. In this instance,… Continue reading Arbitrators, and Not the Courts, Typically Rule on the Validity of an Arbitration Clause in an Employment Contract<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[150,133],"tags":[],"class_list":["post-8975","post","type-post","status-publish","format-standard","hentry","category-contract-law","category-employment","entry"],"yoast_head":"\nArbitrators, and Not the Courts, Typically Rule on the Validity of an Arbitration Clause in an Employment Contract - 360Mediations<\/title>\n<meta name=\"description\" content=\"Questions on the validity of an arbitration clause contained in an Employment Contract are generally the exclusive purview of the Arbitrator, and not the Courts.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.360mediations.com\/en\/judges-will-defer-questions-on-the-validity-of-an-arbitration-clause-in-an-employment-contract-to-the-arbitrator\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Arbitrators, and Not the Courts, Typically Rule on the Validity of an Arbitration Clause in an Employment Contract - 360Mediations\" \/>\n<meta property=\"og:description\" content=\"Questions on the validity of an arbitration clause contained in an Employment Contract are generally the exclusive purview of the Arbitrator, and not the Courts.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.360mediations.com\/en\/judges-will-defer-questions-on-the-validity-of-an-arbitration-clause-in-an-employment-contract-to-the-arbitrator\/\" \/>\n<meta property=\"og:site_name\" content=\"360Mediations\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/360Mediations-120028596572318\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/360Mediations-120028596572318\" \/>\n<meta property=\"article:published_time\" content=\"2022-07-20T15:10:54+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-07-20T15:10:56+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/360mediations.com\/en\/wp-content\/uploads\/2022\/01\/COURT-DECISIONS-360MEDIATIONS-1x1-1.png?fit=406%2C322&ssl=1\" \/>\n\t<meta property=\"og:image:width\" content=\"406\" \/>\n\t<meta property=\"og:image:height\" content=\"322\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"David M. 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