Yesterday the city’s Finance and Administrative Services (FAS)department issued its final rulemaking on the process of Uber and Lyft drivers organizing for collective bargaining.
For background on the draft rules published last month, read this.
The final version doesn’t change much from the draft; it’s mostly just tweaks and clarification. Most notably, the qualification for a driver to be able to vote for potential representation remains the same: he or she must have been signed up with the company for at least 90 days, and must have driven at least 52 trips in any 3-month period in the previous year.
A spokesperson for FAS gave me a list of four significant changes:
- Defining a qualifying driver: adds language to provide active U.S. military members deployed outside of the area a way to meet the conditions of a qualifying driver.
- Applying for designation as a qualified driver representative: adds language to emphasize that a QDR must continually meet the rule’s qualifications or face revocation of the QDR designation by the director.
- Certifying an exclusive driver representative: adds language to give the director discretion to convene an in-person hearing and receive live testimony during the challenge of an EDR’s certification (or non-certification).
- Specifying subjects of bargaining: adds language to clarify and strengthen the complaint process for a party’s alleged failure to negotiate in good faith.
An active member of the US Military who could not meet the driver qualification because of a deployment can still qualify if he or she met the standard any time in the prior 24 months (instead of the standard 12).
FAS can’t win. The final rules will not satisfy the full-time drivers, nor the part-time drivers, and Uber will continue to rail against the ruling claiming that it is “undemocratic.”
Last March the U.S. Chamber of Commerce (on behalf of Uber and Eastside for Hire) sued the city over the ordinance that allows drivers to organize for collective bargaining, but the case was dismissed for “lack of standing” because they couldn’t show any actual harm (rather than theoretical future harm): the rulemaking hadn’t even happened yet and nothing had gone into effect. Now that the rules are in place, expect the lawsuit to be re-filed as soon as actual “harm” of some form can be documented. One of the key issues in the lawsuit, whether independent contractors in the “gig economy” have the right to collective bargaining under the National Labor Relations Act, could go all the way up to Supreme Court, so this could take years to work its way through before it takes effect.
In case you’re interested, here’s a quick primer on the “right to collectively bargain” legal issue. The National Labor Relations Act says:
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment…
But it’s tricky, because the NLRA defines “employees” as well:
The term “employee” … shall not include any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse, or any individual having the status of an independent contractor, or any individual employed as a supervisor, or any individual employed by an employer subject to the Railway Labor Act [45 U.S.C. 151 et seq.], as amended from time to time, or by any other person who is not an employer as herein defined.
That definition explicitly excludes “independent contractors,” which by contract Uber drivers are. So when you put these two together, you have two potential interpretations:
- Congress did not grant the right of collective bargaining to independent contractors, and therefore they may not exercise such a right; or
- Congress did not grant the right of collective bargaining to independent contractors, but it also did not explicitly deny them that right, so a state or municipality may grant it (as Seattle did).
In its legal filings, the City of Seattle points to case law (from the 9th Circuit Court of Appeals, which is binding precedent over Washington State’s U.S. district courts) that seems to support the latter interpretation. But this is an ongoing controversy in multiple jurisdictions around the country as the “gig economy” spreads, making it more likely that the Supreme Court will want to rule on it to ensure consistency. But again, that will take years to wind its way through all the levels of the court system.
How the legal situation plays out in the next several weeks, as the city tries to execute on its new rules, depends on Uber. Recently the company defied local officials in San Francisco by continuing to test its autonomous vehicles on city streets after being told it was illegal, until the State of California revoked the cars’ registrations. Here in Seattle, Uber might immediately sue and ask for an emergency injunction to halt the process, or it might simply refuse to participate in the process and wait to be sued by its drivers (and then request an emergency injunction).
According to the rules now in place, the City will make the application for Qualified Driver Representative (QDR) status available next week, and the first day applications can be filed is January 17th. Then the legal fun starts.