The First Circuit Court of Appeals has ruled that Uber cannot enforce an arbitration clause appearing in its online terms of service.

The case involves a class action originally filed against Uber by four consumers who had downloaded the Uber app to their smartphones between December 31, 2012 and January 10, 2014 . Their complaint alleged that Uber violated our consumer protection statute, Mass. General Laws Chapter 93A, by charging riders “fictitious or inflated fees”. The fees involved additional surcharges and tolls for trips to Logan Airport.

Uber convinced the federal trial court in Boston to dismiss the case on grounds that the plaintiffs had agreed to arbitrate their claims against Uber, and therefore had no right to file a complaint in court. The plaintiffs appealed that ruling. The First Circuit agreed with the plaintiffs. It overruled the lower court, holding that the plaintiffs had never agreed to arbitration.

The case is a significant victory for consumers for two reasons. First, the court noted that the Federal Arbitration Act “does not require parties to arbitrate when they have not agreed to do so.” Here, Uber did not claim that the Plaintiffs saw or read its arbitration clause. The terms were buried in Uber’s “Terms of Service & Privacy Policy.” To access these policies, the plaintiffs had to click a button at the bottom of the screen displayed on their phones. Not surprisingly, none of them did. The court ruled that the links to Uber’s policies were not “reasonably communicated” to Uber’s customers because of the way the links were displayed.  Stated differently, the plaintiffs “were not reasonably notified of the terms of the [arbitration clause]. Since the plaintiffs did not agree to submit their claims to arbitration, they were free to file a court complaint against Uber.

Second, and perhaps more importantly, are the reasons why the court ruled that the plaintiffs did not receive sufficient notice of the arbitration terms. Instead of requiring the plaintiffs to click a box stating hey agreed to arbitration, Uber simply included a link to its policies at the bottom of the users’ screens. The court also gocused on the way the links were displayed on the plaintiffs’ phones. Instead of appearing in underlined text in a different color font, as links commonly do, they were displayed in a gray rectangular box in white bold text. The court also noted the presence of other terms on the same screen and the comparative size of the fonts.

The post First Circuit Rules That Uber Arbitration Clause Is Not Enforceable appeared first on Law Office of Robert Scarino.