Judge Halts First-in Nation Law That Lets Uber, Lyft Drivers Unionize
By David Gutman
A federal judge in Seattle has temporarily blocked the city's first-in-the-nation law that attempts to allow Uber, Lyft and taxi drivers to unionize.
Seattle's law, passed in 2015, allows Uber, Lyft and taxi drivers -- who are categorized as independent contractors, not employees -- to form a union and collectively bargain for things like pay, benefits and working conditions.
It was challenged by two separate lawsuits, one from the U.S. Chamber of Commerce and one from about a dozen Uber and Lyft drivers -- backed by the National Right to Work Legal Defense Foundation and the Freedom Foundation, groups that fight for right-to-work laws and other conservative, anti-union legislation across the country.
"The issues raised in this litigation are novel, they are complex, and they reside at the intersection of national policies that have been decades in the making," U.S. District Judge Robert Lasnik wrote in granting a preliminary injunction Tuesday, halting the law from going into effect. "The public will be well-served by maintaining the status quo while the issues are given careful judicial consideration."
Lasnik repeatedly stressed in his order that the hold should not be viewed as foretelling an ultimate court victory for the Chamber.
Kimberly Mills, a spokeswoman for the Seattle City Attorney, said the city will continue working to defeat the legal challenges to the law.
Adrian Durbin, a Lyft spokesman, called the city's law "experimental" and "poorly drafted" and said they were pleased that it was on hold.
While the court battle plays out, both sides had been moving forward, anticipating a possible eventual vote by drivers about whether they want to unionize or not.
Teamsters Local 117 recently applied and got permission from the city to begin efforts to organize drivers at 12 local ride-hailing or taxi companies.
The taxi and ride-hailing companies would have had to give Local 117 a list of their drivers this week, with contact information. Now they will not, while the lawsuits proceed.
"We have no benefits," said Don Creery, an Uber driver and longtime supporter of the unionization effort. "I work full-time for a $70 billion company. The American taxpayers should not have to subsidize my health care. That's not right."
Gary Kunze, one of the Uber and Lyft drivers who sued to block the law, said that while he had complaints with the companies, a union was not the way to address them.
"I am not a union person, I don't believe in what they stand for," Kunze said. "The city of Seattle and the Teamsters got together and decided to do this at the request of a very small number of drivers."
And Uber and Lyft, not content to pin their hopes on the courtroom, are waging aggressive campaigns to persuade their drivers to vote against the union.
The Chamber argues that federal law, the National Labor Relations Act (NLRA), does not give contractors the right to unionize and that it cannot be pre-empted by Seattle's law.
The Chamber's lawsuit says that drivers are competitors, not co-workers, and that allowing them to unionize is anti-competitive and amounts to "forming a cartel."
Seattle argues that although contractors are not covered by federal unionization laws, the federal government left state and local governments free to regulate a union of independent contractors.
The NLRA explicitly excludes five categories of workers from its coverage and protections: public-sector workers, agriculture workers, domestic workers, supervisors and independent contractors.
The first three are allowed to unionize under various state laws.
City attorneys argued in court last week that independent contractors -- Uber, Lyft and taxi drivers in this circumstance -- are more like workers than they are supervisors and that the city has the authority to let them unionize, even if they're not covered by the NLRA.
Lasnik, speaking from the bench during those arguments, appeared sympathetic.
"Isn't an independent contractor more like an agricultural worker and domestic worker than a supervisor?" he asked. "They're clearly not management."
In his written order, Lasnik said the Chamber's argument relies on a "coincidence of timing" related to the history of the NLRA, and that the city was likely to prevail in that specific argument.
But Lasnik was more open to the Chamber's argument that allowing drivers -- independent contractors -- to unionize could violate antitrust laws. While state law authorizes anti-competitive city regulation of taxi and ride sharing businesses -- that's why there's a uniform rate for cab rides -- it has never been used to let drivers collectively bargain.
The novelty of the city's law, Lasnik wrote, "the lack of any evaluation of competitive effect and the potential impact on an important transportation option for thousands of Seattle residents and visitors cannot be ignored."
Uber and Lyft's business models, Lasnik wrote, would "likely be disrupted in fundamental and irreparable ways if the ordinance is implemented."
The City Council unanimously passed the law in 2015, although it went into effect without the signature of Mayor Ed Murray, who said he supported its goals but had worries about the costs of defending it in court.
(c)2017 The Seattle Times