by Jeff Sovern
In Mohamed v. Uber, the federal district court for the Northern District of California said no. Opt-out clauses appear in contracts and give the contracting parties the right to opt-out of arbitration to resolve disputes within a certain period of time after entering into the contract, often thirty or sixty days (which is frequently before any dispute actually arises). Industry lawyers sometimes claim that because consumers are given the opportunity to opt-out, the arbitration clause cannot be unconscionable and therefor is enforceable. Here is part of how the court responded to that argument:
* * * Drivers’ opt-out right under the 2013 Agreement was illusory because the opt-out provision was buried in the contract. The opt-out provision was printed on the second-to-last page of the 2013 Agreement, and was not in any way set off from the small and densely packed text surrounding it. 2013 Agreement § 14.3(viii). Furthermore, the fact that those drivers who actually discovered the opt-out clause (if any) could only opt-out by a writing either hand-delivered to Uber’s office in San Francisco or delivered there by a “nationally recognized overnight delivery service,” renders the opt-out in the 2013 Agreement additionally meaningless.
It probably did not help Uber that after claiming at oral argument that some drivers had opted out, Uber failed to present evidence that any had.
(HT: Dalie Jimenez)