City wins another Uber lawsuit, collective bargaining cleared to move forward

Yesterday U.S. District Court Judge Robert Lasnik issued a ruling in the lawsuit, brought by several Uber drivers, challenging the city’s ordinance that authorizes collective bargaining for Uber and Lyft drivers.  Lasnik dismissed all of the plaintiff’s claims, ending the case at the district court level.

This was the second lawsuit filed against the city over the ordinance. The first came from the U.S. Chamber of Commerce, and was also assigned to Lasnik. He found enough serious issues in that case to justify issuing a preliminary injunction that prevented the city from implementing the ordinance.  Earlier this month, Lasnik dismissed that first case, but left the preliminary injunction in place until he could rule on the city’s Motion to Dismiss in the second case.

In their lawsuit the Uber drivers made three claims against the city’s ordinance:

  1. That it violated the National Labor Relations Act because it compels Uber to stop doing business with drivers who do not want to be represented by a “labor organization.” Specifically, the drivers contend that it allows negotiating a labor agreement that requires drivers to be union members, making Uber a “union shop.” Lasnik rejected this claim as not “ripe for adjudication.” Courts are not allowed to decide theoretical matters; they are only allowed to rule on specific “live cases” where the facts are fully developed. In this case, the judge noted that while the ordinance authorizes negotiating a union shop provision in a labor agreement, it doesn’t require it, so until an actual agreement is in place with a union shop agreement, there isn’t a live controversy to be adjudicated. In fact, there would need to be a union shop provision in the agreement, the city would need to approve such an agreement, and a plaintiff in the case would need to be impacted by it in order for the issue to be a ripe claim.  Lasnik points out that the plaintiffs are required to show that “no set of circumstances exists under which the [Ordinance] would be valid,” and that “is not a foregone conclusion” at this point in time.
    The drivers, and by extension Uber, also got hoist by their own petard over their insistence that drivers are not “employees” but rather independent contractors. The NLRA prohibits labor organizations from partaking in certain activities, but it defines a “labor organization” as one “… in which employees participate.” Since the plaintiffs claim they are not employees, and the ordinance itself says that it doesn’t apply to drivers who are employees under the NLRA, Lasnik concluded that “an organization representing non-employee drivers is not a labor organization” and therefore not subject to the NLRA’s restrictions. Now, the one organization that has been certified by the city as a driver representative so far, the Teamsters, is in fact a “labor organization” as applied to other employees that it represents, but it’s an open question of law as to whether that makes it a labor organization in all contexts, and once again Lasnik found that issue was not ripe for the courts to decide until it actually became the representative of some set of Uber drivers and then committed some act that potentially violated the NLRA.
  2. That the ordinance violates the drivers’ First Amendment rights to free speech and association by compelling them to be represented by an Exclusive Driver Representative and limit their ability to directly negotiate with Uber. Lasnik rejected this as a matter of law, pointing to a Supreme Court ruling holding that an exclusive representation requirement does not violate first amendment rights. As a matter of law he left open the question as to whether requiring drivers to pay union dues, which might be used to fund speech or political activities to which they disagree, was a violation of their First Amendment rights; however, since the ordinance does not require any of that, no labor agreement has yet been negotiated that compels union membership or paying of dues, and a union hasn’t actually performed any speech or political activities yet, he found the issue also not ripe for adjudication.
  3. That the ordinance violates the Driver Privacy Protection Act because it compels Uber to hand over information about its drivers to driver representatives in order to solicit their joining a union. Lasnik rejected this claim as a matter of law, since the DPPA restricts distribution of information originating with a DMV, but the city ordinance only requires disclosure of licenses and numbers from King County and/or the City of Seattle — not the DMV.

Having dismissed all the claims, this lawsuit too is ended, at least for the time being. The “unripe” claims can be refiled at a future point in time when the situation has changed. Also, the plaintiffs’ lawyers have stated that they intend to appeal the ruling to the 9th Circuit Court of Appeals. The Chamber of Commerce has already appealed its case; its opening brief is due November 17th.

In the meantime,  since Lasnik has now disposed of both cases, he also lifted the preliminary injunction on implementation of the ordinance, so the city can move forward.  That injunction still has a pending appeal to the 9th Circuit, which now becomes moot, but either the Chamber of Commerce or the drivers could petition the 9th Circuit for a new preliminary injunction while Lasnik’s rulings are being reviewed. I’m sure we’ll hear more about that in the coming days.