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Uber drafting tip: Got an arbitration clause? Then don’t also say exclusive jurisdiction is in some court.

Ride-sharing service Uber’s contracts with its drivers included an arbitration clause (in various versions). That clause specified that any disputes about arbitrability would be decided by the arbitrator, not by a court. This is known as “delegation”; Supreme Court precedent says that’s OK as long as the delegation clause is “clear and unmistakable.”

But Uber’s contract also contained a forum-selection clause stating that exclusive jurisdiction for all disputes would be in the state and federal courts located in San Francisco. This, said a federal district court, meant that the delegation clause was not clear and unmistakable. As a result, said the court, the decision as to arbitrability would have to be made by the court, not by an arbitrator. The court rejected the defendants’ arguments to the contrary.

(The court then ruled that the arbitration clause itself was invalid because it was unconscionable. That means that the Uber drivers might well be able to pursue a class-action lawsuit against the company in court, instead of having to arbitrate their claims individually.)

The case is Mohamed v. Uber Technologies, Inc., No. 3:14-cv-05241-EMC (N.D. Cal. June 9, 2015) (denying motion to compel arbitration).

Comment: Anticipating this possibility, the Common Draft forum-selection clause has long, and maybe always, had an express carve-out for arbitration, with its annotations containing additional case citations.

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