In a case that could have far reaching implications for businesses using mandatory arbitration clauses in online user agreements, the Superior Court of Pennsylvania has agreed to re-hear arguments in Chilutti v. Uber Technologies, Inc. before the full court. The decision follows a 2-1 decision by a panel of Superior Court judges late last year. The PA Chamber joined with the U.S. Chamber of Commerce in an amicus brief supporting the application for re-argument. You can read our brief here.
In invalidating Uber’s mandatory arbitration clause, the 2-1 decision set a new legal standard for arbitration clauses used in online user agreements. The judges would require that agreements explicitly state the user is waiving their right to a jury trial in bold, capitalized text on the top of the first page of the terms and conditions document.
The establishment of a new, heightened standard for the enforceability of arbitration clauses could call into question the enforceability of countless arbitration agreements created online in reliance on existing precedent and would force businesses nationwide to tailor their websites to accommodate the preferences of two judges.
The PA Chamber will continue to engage in this important litigation and is working with the U.S. Chamber to file an updated amicus brief in support of Uber’s appeal before the full Superior Court.