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Comment by gwright | Hacker News Reader

Another title might be: "U.S. appeals court: Contracts with an arbitration clause are enforceable."

Uber isn't "forcing" anybody to do anything. The court is saying the contract is valid and the parties must work within the context of that contract.

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When my (now ex-) wife was going to law school, one of the biggest surprises I had was learning how often contracts aren't entirely binding (as long as you have the money to actually go to court with real representation).

It's easy to think "You agreed, it's clear that you agreed, end of story" but that's not the way contract law actually works. If the parties aren't both getting a roughly equal deal and operating with roughly equal levels of good faith, everything changes.

And overall, that's a good thing. "If you don't like it, do something else" isn't much of an option when there's no other "real" option. "Go found your own company that works differently" is a farce for the vast majority of the population.

> (as long as you have the money to actually go to court with real representation)

The theoretical ability to contest contract provisions is close to meaningless because the cost of litigation makes it inaccessible for the vast majority of the American people. Arbitration puts justice even further out of reach.

No argument here (though I have no real solution to that problem. Denying everyone lawyers doesn't help, it just slightly shifts who suffers).

My point was that on this and related topics the "It's a contract, suck it up" type responses are based on a flawed basis, not that the result is actually just or fair.

There's no real option to working as an Uber driver?

Edit: I'm sorry, the parent comment was predicted on applying "there is no alternative" to the situation "whether you contract for Uber". That doesn't make sense, and I'd appreciate an answer besides a downvote. It seems like a fair question.

If you don't like the Uber terms but are trying to make money driving people, you have severely limited options as to your alternatives to drive for, and I'd not be surprised if they all had arbitration clauses as well. saying "If you don't like the terms, go somewhere else" is likely an illusion of choice and not a practical option.

And the legal definition of "no choice" means "no choice if you want to make money driving other people in a manner where you set your own hours"? Because you have lots of other options both for employment, and for driving other people (bus driver, shuttle driver, limousine driver...), and for driving (package delivery, truck driver).

I just don't get the intuition for how a (relatively) new market entrant in a relatively new market can, in any meaningful sense, be such a vital option that the other side is powerless.

That's only true for contracts between businesses and consumers, or generally contracts not involving any businesses.

In a B2B contract like between Uber and its drivers, the contract is whatever the parties agree to (as long as there aren't any unlawful provisions), even if there does not appear to be a roughly equal deal.

This argument is silly and ignores the power imbalance between employer and employee.

We would be better of saying no company can offer employment on $obviously_bad_for_employee terms than letting the 'market' decide. Every employer benefits from this arrangement and no employer would have it in their contract if it didn't benefit them.

The power to just change jobs isn't as common and people on HN believe and that power is meaningless when most employers require arbitration. And why wouldn't they, it directly affects their bottom line.

> no employer would have it in their contract if it didn't benefit them

Isn't that true of every item in the contract when it comes down to it, though?

Yes, which is why, for example, contracts waiving basic labor rights are illegal. [1]

[1] https://en.wikipedia.org/wiki/Contract#Illegal_contracts

Between entities of similar power, contracts contain terms to protect both parties. When one entity has more power than the other, the terms are used to further empower them at the cost of the other.

Who are you to decide what is obviously bad for someone else? Leave contract contents to those adults who participate in them. If either of the parties think provisions are “obviously bad”, then they won’t sign.

I mean that's a pretty elementary interpretation to say the least. If you're struggling to make ends meet and are considering Uber for a few extra dollars every week are you going to care whether or not there is an arbitration clause? Even if you know it's bad you might be willing to risk it.

Good thing Uber isn’t the only employer, or even the only rideshare option.

I agree that this isn't a monopsony situation. The reason that "agency" is meaningless has more to do with the power imbalance of the individual relative to any large corp -- there doesn't need to be only one option for the negotiation to be a farce.

I can't remember the last time I went to a medical provider who didn't force you to sign an arbitration waiver. There's no realistic alternative.

Or cell phone provider

I too am always asked to sign arbitration waivers by medical providers. I never do, and I make sure they’re aware of it. I’ve yet to encounter one who will decline to treat me or my family because of it.

Absolutely. Too many people underestimate a polite but resolved refusal to sign (without modification) any contract (including recipts!) whose terms you do not agree to. Not all, but many orgs will oblige if you don't seek to abuse it.

Obviously Ymmv, not a lawyer, free advice from random internet stranger, caveat emptor, etc, etc.

Those who signed it are suing Uber, so clearly they've decided for themselves their relationship is problematic.

>We would be better of saying no company can offer employment on $obviously_bad_for_employee terms than letting the 'market' decide.

Hold on -- are you saying that nothing about employment contracts should be up to the market? What are you counting as obviously bad here? Different people would say that e.g. under $wage/hr is obviously bad, but then you're right back to price controls.

What are you criteria for when something should be up to the market?

The contract already exists with the drivers and already contains that clause. The court ruled that, as a consequence, Uber can force the drivers into arbitration.

The word “forced” is perfectly reasonable to use here. If I signed a contract requiring me to pay money, and I didn’t want to pay, and finally a court ruled that I had to pay; it would be fine to state that the court ruled the other party can force me to pay.

Except that the headline as written suggests that Uber is doing something unfair. Since it is the drivers' appeal that has been rejected by the Court maybe some alternative headline could have been:

"Court Reminds Uber Drivers that Contracts Are Enforceable" or

"Drivers Waste Court Resources Only To Discover That Contracts Are Enforceable"

Only if you think “forced” is somehow inherently unfair.

Well, yes. That is my point. The framing is designed to make you think Uber has done something unfair. Different framing would either not be news "Contracts are enforceable" or be designed to make you think the drivers did something wrong "Drivers Waste Court's Time".

Of the three I think the "Uber did something wrong" framing is least accurate, but is probably the best clickbait.

My point is that "forced" doesn't imply anything about which side is right. The side doing the forcing is often in the right.

Your other framings are completely bogus. They miss the actual news, which is that arbitration clauses, specifically, are enforceable. This was an open question with good reasons to think they wouldn't be, so "Contracts Are Enforceable" doesn't capture what's interesting about it, and "Drivers Waste Court's Time" is just plain wrong.

It is my understanding that this is pretty established law (arbitration clauses). But in any case if it isn't, then I think a less pejorative headline would be "Uber Ruling Strengthens Arbitration Clauses" and not "Uber Forces ...."

I don't think it would have made it to an appeals court if it was that established. I still don't understand what's pejorative about this.

Very HN of you to replace force in the title with “enforce”.

Here it is in a sentence:

By enforcing the terms of the agreement, Uber forced binding arbitration on the contractor.

If the contractor Filed a Complaint before a court in breach of the arbitration provision of the contract, Uber could have waived its contractual right to arbitration and allowed the case to proceed, but instead they forced the contractor into arbitration by enforcing the agreement. There is an obvious reason Uber elects to put the arbitration provision in its agreements and there is a reason they didn’t waive that provision when push cane to shove...it benefits Uber.

The point I was trying to make that the court/law is the enforcer here, not Uber. I think the headline is misleading in this respect.

Your point that a party to a contract could waive their contractual rights is true but I would also argue that you are also choosing words to frame the narrative when you say the Uber "forced the contractor" rather than saying that Uber exercised its contractual rights to resolve the dispute via arbitration. In fact isn't the contractor who is trying to "force" Uber to give up its contractual rights by claiming that the contractual terms aren't valid? [edit: corrected are to aren't]

There is a larger discussion about the value/fairness of arbitration as a mechanism but as I understand it, it is established law that arbitration clauses are legal and I don't think anyone is arguing that Uber has "forced" someone to enter into the driver's contract with Uber.

The law doesn't force them into arbitration, Uber's contract does. The law says Uber can force arbitration.

I think the idea is that "force" sounds like Uber is doing it without a prior arbitration agreement. "Enforce" sounds like Uber is doing it after an agreement with drivers. The latter is what is actually happening.

It's a small difference but it matters. The power difference is a separate issue between employers and employees is a separate (important) issue, though.

The arbitration agreement is a "forced arbitration" agreement. It's a small difference but it matters. The law enforced the validity of the contract, the contract forces the arbitration outside of a court of law.

Some arbitration agreements make arbitration mandatory by default, according to their wording; others simply give either side the right to choose arbitration.

The de facto effect is the same except in the rare case where a court sees the wording of the first kind of contract and dismisses the case on its own initiative, since otherwise the arbitration clause would only be enforced on the motion of a party, without which the right would be waived.

But it's not formalistically wrong to use the verb "force" to describe "exercising a contractual election" as opposed to merely "not waiving a default provision of the contract."

But there is nothing special about Uber, or the arbitration clause, or the contract in this regard. So why is the headline written as it is and why are you insisting on this way of framing the argument. You are choosing to characterize the normal enforcement of contract law as something extraordinary and by the choice of words framing this as something that is unfair. At least that is how I interpret your wording and how I also interpreted the headline.

The fact that this particular contract involves Uber and drivers and an arbitration clause is irrelevant to the larger idea that contracts are indeed enforceable. That shouldn't really be news.

It involves uber because it involved a court case with uber. Ask the mods to update the headline to remove the other party from the court decision if it upsets you that Uber is named. "Contracts are enforceable" is a meaningless headline, and you know there's more to the story there. It's a case involving a forced arbitration clause. Hence, the word force. You may be interpreting things incorrectly. Consider that possibility.

I don’t think it is misleading at all to say Uber is “forcing” drivers into arbitration. As the employer, they hold all the power in the relationship. Do you really think an Uber driver could make a $10B+ company do anything?

Apple can FORCE iPhone users to hand over HUNDREDS OF DOLLARS under THREAT OF VIOLENCE.

(That is: you have to pay money for an iPhone, and if you take it without paying the police may come after you.)

I personally think arbitration clauses in situations where the contract is essentially non-negotiable (company/user, company/worker) are basically a way for corporations to opt out of the civil court system, and one can make the case that they should therefore not be allowed (though this is a question for the legislature more than the courts).

In any case, you are absolutely right about the headline.

To be literal and pedantic, the term of art that is being "enforced" here is "forced arbitration".

> Uber isn't "forcing" anybody to do anything.

In theory, people enter into contracts under their own free will. In reality, Uber has tremendous relative power in that relationship, like every relationship between a large corporation and an individual worker. Contract law, if I understand correctly, takes into account the relative power of the parties. As a simple example, Uber has a legal department to create and review the contract; most drivers don't have attorneys to even review it; many/most will not grasp the legal implications and they almost certainly can't negotiate it.

I'm not saying that invalidates all contracts and that the employee has no free choice, but it's false to say that Uber does not have much greater leverage.

> As a simple example, Uber has a legal department to create and review the contract; most drivers don't have attorneys to even review it;

I don't understand how legal system can be fair till the above is true. Individual, from the start, is on the loosing side. It should be illegal to sign things you are not qualified to understand. You can't get a prescription medication without a doctor reviewing your case first -- why can you sign a 100-page legalese? You are certain not to know what you are doing.

Arbitration is nothing more than a spectacle. Everyone is on the company payroll there, directly or otherwise -- house always wins.

Or at least there can be consumer protection laws which limit the power of such agreements, a la Australia.

https://en.wikipedia.org/wiki/Australian_Consumer_Law#Scope

> "Unfair terms are void, where they appear in standard form contracts signed with individuals "whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption."'

This would not apply to the Uber driver case, but it would be a welcome change nonetheless.

My understanding is that arbitrators do actually rule against the company from time to time, it's not a pure rubber stamp.

It seems like one thing to do would be to make sure to rule against the company for small cases with limited damages, to keep up your credibility and ensure that the big cases always go in the company's favor. I don't know if arbitrators do this, but I wouldn't be surprised.

Because meeting of the minds is dead under arbitration and contracts of adhesion. You do not have to understand your loss of rights to lose them under arbitration. You do not have to understand that your right to free speech will be squashed because the proceedings of arbitration may be mandated as secret. You and your rights are bound.

> Contract law, if I understand correctly, takes into account the relative power of the parties.

It really doesn't, at least not in the US.

There are a bunch of things that are necessary for a contract to be considered enforceable, but the two that are relevant here are "meeting of the minds" and "duress".

"Duress" is the obvious one, but it's a really high bar. It usually means something like physically threatened or blackmailed or literally locked in a room and told you can't leave until you sign. There's not generally a case that an employee or contractor was under duress from their future employer because they always had the option to not take the job in the first place.

"Meeting of the minds" is a bit more subtle. The parties have to believe they're agreeing to the same thing. This is also hard to show, though. Generally speaking, if you've been given the full text of the contract and had ample time to read through it then you are legally considered to know and understand its contents. There are a few cases where shrinkwrap licenses and extremely one sided terms of service get rejected under this theory, but it normally requires the parties to have signed materially different documents or for one party to be able to show that they weren't given adequate access to the document before they signed.

It's also worth noting that contracts are basically considered valid until proven otherwise. So even if there is a case to make that you shouldn't need to comply with some terms of a contract you are bound by you still need the resources (both in terms of relevant supporting documents and in terms of time and money) to actually prove that case in a court of law.

> It really doesn't, at least not in the US.

I've had American attorneys consistently tell me otherwise, though I've never had to put the idea into practice myself.

> So even if there is a case to make that you shouldn't need to comply with some terms of a contract you are bound by you still need the resources (both in terms of relevant supporting documents and in terms of time and money) to actually prove that case in a court of law.

Perhaps in theory, but IME the reality is the opposite: A contract is only worth what you are willing to invest the resources - money, time, attention, and frequently social/political capital - in enforcing.

This comment overlooks the fact that the U.S. court system is currently disagreeing with itself over whether the practice of forced individual arbitration is illegal or not. The last time SCOTUS had a case about this in I think 2016, they divided sharply by one vote. This is yet another case involving it where the courts who saw it disagreed with each other.

If the ninth circuit won't overturn it, then it's safe to say no one will.

Dammit. This is a true threat to everyman. Class actions don't benefit everyman directly, but they are indeed very powerful shapers of corporate behavior.

Congress needs to act ... oh wait, silly me, I forgot they are beholden to corporations not voters.

November is coming.

Wait, what happens to the 9th circuit in November?

Can't Uber force a driver it has a dispute with to engage in binding arbitration, rather than resolve the case in court, which is typically the entitlement of both parties?

If the driver agreed to a contract that has a clause that expressly said that they could, then yes. The court ruled that such clauses in contracts can be enforced. Without the contract saying so, Uber wouldn't have been able to do this at all.

The contract does say so, though. “Without the contract saying so...” is a counterfactual with no relevance to the actual situation.

I will never understand why it’s such a hot topic that the terms people agree to...are the actual terms.

Because there are some terms which are antithetical to law. If you sign a contract stating that you're willing to become someone's slave for $x, that violates natural rights and would be voided by a court.

Because it’s almost universally agreed that some terms are not acceptable and thus not enforceable. Selling yourself into slavery is a common example. More gentle would be a contract where you agree to a pay rate that is less than the minimum wage.

The disagreement is merely over which side of that line arbitration clauses fall on. I happen to think that the right to have your grievances heard in court should be considered fundamental and inalienable.

Indeed. Minimum wage laws will probably soon no longer apply, because nearly all laws are superseded by arbitration, including state ones. It will not be long until we reach that point where you can easily and accidentally agree to work for 1c/hr with a carefully contrived contract. And, as long as they can secure an arbiter to rule against you for signing that employment agreement, you will be subject to it.

But not required to continue working there. It should be pretty easy to find a job that pays more than 1c/hr.

Not if the contract also includes an endless non-compete clause preventing you from ever finding another job.

Well shit, if we're just making things up, then why stop there?

These aren't made up. States are feeling compelled to add laws to limit non competes now, when they historically haven't, due to things like sandwich shops having non compete clauses for their minimum wage employees. Massachusetts recently enacted regulations on non competes in response to those kinds of abuses

Did those sandwich shops have non-competes that forbade the employee from working for any other company no matter the industry, or just sandwich shops? It's still stupid, but the hyperbole above is about non-competes forbidding getting any other job anywhere ever again.

If I recall correctly it was food prep, which covers any retail shop, like Walmart, that also serves food. That happens to cover the vast majority of all minimum wage work. As companies are growing larger and larger, and entering more and more industries, those uncurtailed non competes _are_ going to effectively be a complete stop on working at other firms.

It's not stupid. We are watching this happen. If you think companies should be free from any of this regulation or even discussion about their practices then you are free to go to Somalia and live in a regulation free utopia

Would you care to assign any other positions to me?

I feel like you've lost sight of me simply taking objection to this histrionic idea of companies forcing people to work for them for 1c/hr. It's never going to happen, and you don't have to be a Somali pirate to see how absurd this argument is.

I've put forth no other argument about anything, regulation or otherwise.

I don't find the idea histrionic. We are seeing a constant and repeated degradation of worker's rights in ways that are both limiting what workers are allowed to do outside of their employment with a company, and in limiting worker's abilities to seek redress for any damages done to them by their employers. We already see industries where every single company operating in that industry requires arbitration agreements which employees have no protection against. The courts have said its kosher, the legislature has no intention of blocking it at a federal level, and for many classes of workers there are no options without arbitration agreements. That is just removing the protection of the courts from a massive number of workers.

Combine this with other controls on workers, like companies getting a say in whether or not you get unemployment, and workers are being forced more and more into a choice of do what the companies say or starve. I don't see how this doesn't end with virtual slavery like being forced to work for 1c/hr but you stand here and say its stupid and hyperbolic.

I admit that I did assign you a position you never stated. I have mostly seen arguments against discussing issues like this come from die hard libertarians who think there should be no sort of government interference in agreements between employees and employers and I made an assumption about you without evidence, for which I apologize

I can't reply to you below, so I'll do it here.

Firstly, apology accepted. Easy mistake to make.

Secondly, I just can't see us letting things go that far. We'll have to agree to disagree with that.

I do agree that binding arbitration clauses are terrible, and I accidentally put myself in a position where I had to sign one at my last job. We had worked out terms, and a start date and I quit my old job before I saw the employment contract. I went through and made edits, and the CEO was open to negotiating on it. There was a problem with their IP ownership clause he happily fixed, and if I wanted to, he was willing to get his lawyer involved in the removal of the arbitration clause. I let it go though because I would have been jobless if he decided I wasn't worth it.

The problem though is, how do you strike a balance between leaving people free to make economic decisions they deem in their interest vs being taken advantage of by predatory contract agreements? Arbitration and non-competes are bad, but I'm happy to agree to them...for a price.

I agree that striking the line is difficult. The only way I see for the government to have a balance is to look at aggregate values. For instance we're seeing corporate profits and GDP skyrocket right now but worker wages aren't and haven't for decades. That would indicate to me that workers need more support from the government. On the other side if we saw companies stagnate while workers were pulling more and more out in compensation that would be a good time to loosen regulations on companies.

What about the time that workers were literally gunned down for not allowing themselves to be taken advantage of. Once you look at historical examples, these crazy things people are saying end up being less crazy than what historically has happened.

So, what happens when a worker signs such an agreement and it is upheld under arbitration?

Heck, it used to be pretty common to have workers with contracts that not only forbade them from working elsewhere, but forbade them from leaving their job at all. The hypothetical extreme of “sign a contract to sell yourself into slavery” is not actually very hypothetical nor extreme.

Might as well skip all the arbitration hassle and just repeal all minimum wage laws, then.

Well, if it's good enough for Sweden, I don't see why not.

Sweden has de facto minimums specified per industry, so not really comparable.

Best I could find is that unions in a given industry bargain for their wage. There is no minimum wage law that I could find. From what I read, it seemed to be the consensus of the unions that minimum wage law might actually hurt their bargaining power by driving wages down.

Am I missing something? There's a huge difference between negotiated wages between two parties (one being a union), and a law mandating a wage.

> But not required to continue working there. It should be pretty easy to find a job that pays more than 1c/hr.

That's pretty glib and misses the point: labor laws like the minimum wage exist for a reason. The tl;dr is that the free market didn't solve the problems the laws were meant to solve 100 years ago, and the free market isn't going to solve them now (if the GP is corrected and forced arbitration gives employers a way to bypass the laws).

The parent was talking about people being forced to work for 1c/hr. It's an absurd claim, and that hypothetical person could walk into basically any other job. Preferably one paying more than minimum wage.

It makes me wonder if we're about to see a large increase in corruption. In societies where the enforcement mechanisms are widely perceived to be in the pocket of powerful self-interested organizations, workers often don't just lie down dead and take it (well, some do, but not all). A significant fraction instead turn to covert activities that subvert the effectiveness of their employer and enrich themselves, but can't be easily detected. So the Uber driver might hold to the letter of his contract, much as it screws him, but surreptitiously pass Uber data on to Lyft as a side job. The service worker may put in the hours according to their contract and hop to it whenever the boss asks, but when the boss isn't in, they're going to ask for a little bribe under the table to actually give you service. The boss might even be in on it, splitting the pool with his workers so they can slack off and demand bribes even when he's looking but never reporting their side business to corporate management.

I've always wondered about the logic of the certain faction who wants to roll back basic protections of the rule of law to some fraction of society. Or actually, I get it - they always believe that they're in the fraction that will come out ahead, and can co-opt the enforcement mechanism to do their bidding. But I think a lot of these same interests underestimate the degree to which they depend upon the norms of functioning democratic society. Also common to high-corruption societies is the need to hire private security & intelligence forces to prevent a disgruntled rival from offing you and your whole family; are the new corporate oligarchs willing to go there, and live in that fear just so they can make more money?

Go work at any retail or food service job for a well known company. You'll find constant theft and shrinkage from employees just not tracking loss of product. Many people on forums like this act like it's because that class of people are less trustworthy or incapable of delaying actions for future benefits.

That may well be true for some of the population, but I saw a large portion of employees whose viewpoint was, "Why wouldn't I do this? The company doesn't even pay me enough to live". I saw many times where it only took one bad week where someone went hungry for a few meals before they started stealing food or medicine. It won't take much for that viewpoint to spread as more and more people get pushed into the "have nots" group instead of the "haves"

It is a denial of the agency of the individual to prohibit them from agreeing to something else.

So in your view, preventing people from selling themselves into slavery is denying them agency?

Technically that is true. People do have an inherent right to make bad decisions. That, (ironically in this example) is what freedom means.

"Agency" approaches meaninglessness when you can't understand what you're agreeing to, can't afford a lawyer to interpret it for you, and can't get access to the courts later because of an arbitration clause.

If I am kidnapped by a serial killer and given the choice between death by machete and death by pistol, it counts as freedom?

If so, your definition of freedom is terrible.

And?

That concern is weighed against other considerations, including whether or not to allow society to coerce individuals into degrading situations.

Law -- like any other human construction -- is about trade-offs.

Have you ever said something before similar to,"what if the child consents?"

Because in almost every contract where an arbitration clause exists, it's because there's a gross disparity in the negotiating power between the parties, and the clause enables the more powerful party to deny the lesser the primary means of equitable redress of contractual violations stemming from this power disparity: the courts.

Y'all who fight for workers' rights on HN are the real troops o7

Excuse me?

> Uber isn't "forcing" anybody to do anything.

In my view one cannot pull this argument when talking about a dominant player in the market (which, I believe, Uber is, in many cities).

What happens when literally every contract requires you to agree to arbitration? That seems to be the direction things are going.

Sorry, can't sell you groceries unless you sign this.

That is the direction it is going. You will soon be unable to conduct your life w/o losing your fundamental rights to contracts of adhesion with losing terms and being bound by the whims of an arbiter who's not subject to regard for the law.[1]

[1] http://arbitrationblog.kluwerarbitration.com/2010/05/17/the-...

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