An Uber driver agrees to Uber’s standard form contract, which includes an arbitration clause. The arbitration clause permits drivers to opt out within 30 days, and the driver does so. So the driver can never be forced into arbitration with Uber, right? Wrong. Greg Gauthier recently pointed me to a case from the Eastern District of New York, Faith v. Khosrowshahi, in which the driver was obliged to arbitrate a dispute with Uber anyway. Why? Because Uber had sent a later contract with an arbitration clause, and the driver hadn’t opted out of that one. Opt-outs, unlike diamonds are not forever. The court ruled that the later contract superseded the earlier opt-out.
This situation is ripe for abuse in at least two ways. First, how likely is it that consumers and Uber drivers will know that their earlier opt out becomes inapplicable when they sign a later contract? Even if the second contract states that earlier opt-outs stop being effective and so need to be repeated–something this contract did not explicitly say, though a lawyer would have understood that the language could have had that effect–I very much doubt that ordinary consumers or drivers would read the contract and understand what it meant. And second, the decision means that when consumers opt out, companies can wait a while and then send a second agreement hoping that the consumer will forget to opt out from the second contract. Regular readers of the blog won’t be surprised to hear me wonder if such a practice would be an opaque (or dark) pattern.