The Court of Appeal for Ontario declared on Wednesday that Uber’s arbitration clause for its drivers is invalid both because it violates the Arbitration Act and because the arbitration clause is unconscionable.

The lawsuit was filed by an Uber driver who is seeking a class action lawsuit designation that seeks to declare that Uber driver are employees of Uber. The arbitration clause that Uber drivers sign requires that disputes, conflicts and controversies get resolved through arbitration. It also requires that the Uber driver pay the administrative/filing-related costs of the arbitration upfront, which is estimated to cost around $14,500.

The clause was determined to violate the Arbitration Act because it contracts out an employment standard of the Employment Standards Act. The court determined that the arbitration clause “eliminates the right of the appellant (or any other driver) to make a complaint to the Ministry of Labour regarding the actions of Uber and their possible violation of the requirements of the ESA. In doing so, it deprives the appellant of the right to have an [Employment Standards Officer] investigate his complaint.”

The clause was found to be unconscionable because the requirement to pay upfront costs are a “substantially improvident or unfair bargain.” The court also found that there was “no reasonable prospect of being able to negotiate any of the terms” and significant inequality in bargaining power. It was also determined that Uber knowingly and intentionally “chose this Arbitration Clause in order to favour itself and thus take advantage of its drivers.”

In the US, the Court of Appeals for the Ninth Circuit found in September that Uber can require drivers to go through arbitration regarding the classification of its drivers. In May Uber declared that it would no longer require sexual assault and sexual harassment claims to be resolved through arbitration.