## Facts

- Uber required drivers to accept updated online agreements through an in-app click-through process to continue accessing the platform.
- The agreements were presented via hyperlinks with a “Yes, I agree” button; drivers did not sign paper contracts or receive printed copies.
- The agreements included broad arbitration clauses, delegation provisions assigning arbitrability questions to the arbitrator, and waivers of class, collective, and representative actions (including PAGA).
- The agreements included a short-window opt-out procedure requiring written notice to Uber.
- Abdul Kadir Mohamed and Ronald Gillette, Uber drivers, were deactivated after Uber relied on consumer background reports; they alleged violations under federal and California statutes.
- Gillette also asserted California Labor Code claims through a representative action under PAGA, including misclassification and wage-and-hour violations.
- Uber moved to compel individual arbitration; Hirease (a background-check vendor sued by Mohamed) sought to join and compel arbitration as a non-signatory.

## Issues

1. Whether the arbitration provisions were unenforceable under California law due to procedural and substantive unconscionability.
2. Whether the agreements clearly and unmistakably delegated arbitrability (including enforceability) to the arbitrator, and whether the delegation provisions themselves were enforceable.
3. Whether the class, collective, and representative action waivers, including PAGA waivers, were enforceable.
4. Whether unconscionable terms could be severed to enforce the remainder of the arbitration agreement.
5. Whether Hirease, as a non-signatory, could compel arbitration under agency or equitable theories.

## Decision

- The court denied Uber’s motions to compel arbitration.
- The court denied Hirease’s joinder and request to compel arbitration.
- The court held the arbitration provisions, including the delegation clauses, were procedurally and substantively unconscionable and therefore unenforceable.
- The court declined to sever offending provisions, concluding the agreement’s unlawful terms were central to the arbitration scheme.

## Legal Principles

- Under California law, an adhesion contract presented on a take-it-or-leave-it basis may support procedural unconscionability, even where an opt-out exists but is not meaningfully available in practice.
- An arbitration agreement is substantively unconscionable when its terms are overly one-sided, including provisions that deter small-value statutory claims through cost and risk allocation.
- A delegation clause can be invalid if it is itself unconscionable; when invalid, the court may decide arbitrability rather than compel an arbitrator to do so.
- California public policy renders PAGA representative-action waivers unenforceable; courts may refuse enforcement where the waiver is bound up with the parties’ arbitration structure.
- Courts may decline severance when unconscionable terms are not isolated and severing them would require rewriting the parties’ agreement.
- A non-signatory may not compel arbitration absent a valid basis (such as agency or equitable estoppel), and cannot obtain arbitration where the underlying arbitration agreement is unenforceable.

## Conclusion

The court refused to compel arbitration because Uber’s driver arbitration program, including its delegation clause and representative-action waivers, was unconscionable under California law and not salvageable through severance, and a non-signatory background-check company could not enforce the arbitration clause against a driver.


Mohamed v. Uber Techs., Inc., 109 F. Supp. 3d 1185 (N.D. Cal. 2015)