Legal challenge to Seattle’s Uber drivers collective bargaining ordinance ends

Yesterday the U.S. Chamber of Commerce, Uber, and the City of Seattle jointly agreed to end the lawsuit challenging the city’s ordinance granting Uber and Lyft drivers certain collective-bargaining rights, and this morning the judge overseeing the case officially dismissed it. This ends the case’s complex, three-year journey through the court system.

The ordinance was first passed in December 2015, laying out both a set of issues that were eligible for collective bargaining on behalf of TNC drivers, and a process for selecting organizations authorized to represent drivers. In the spring of 2016 the Chamber of Commerce filed a lawsuit challenging the ordinance, but it was thrown out by the court for not being “ripe” since the ordinance had yet to be implemented. But shortly after it went into effect in early 2017, the Chamber re-filed its lawsuit.

The lawsuit alleged that the ordinance violated the Sherman Antitrust Act through illegal price-fixing of driver wages, and that it was pre-empted by the National Labor Relations Act (NLRA). The district court judge largely agreed with the city, but the Ninth Circuit Court of Appeals partially overturned that ruling, finding that the NLRA did not pre-empt it, but also that the city did not have “state immunity” that would exempt it from the Sherman Act. The NLRA-related claims were dismissed, and the Sherman Act claims were sent back down to the district court.

In January 2019, the City Council amended the ordinance, stripping out the authorization for collective bargaining over wage-related issues, though leaving in place the authorization for other issues such as workplace working conditions. That undermined the most obvious claims that the ordinance violated the Sherman Act as a price-fixing scheme.

The Chamber subsequently filed a new motion for summary judgment for violations of the NLRA. The City responded by claiming that there were material facts in dispute and it needed to complete the discovery process before any motion for summary judgment could be ruled upon. The judge agreed and set a schedule for discovery.

That let to a year of squabbling between the parties over the discovery process. In December they hit an impasse when the city demanded that the Chamber provide internal documents from Uber, Lyft, and the other organizations on behalf of whom it was suing. The Chamber refused, saying that it had no legal authority to demand documents from its members. The city replied by asserting that if that were the case, then the Chamber is not allowed to file a lawsuit representing its members because it didn’t fulfill the requirements for “associational standing”  because its members needed to directly participate in the case.

Earlier this year the judge agreed with the city, and told the Chamber to either produce the documents or he would dismiss the Chamber as a party in the case (leaving only Uber as a plaintiff).  Earlier this week, the Chamber filed its response: it didn’t back down one inch, and essentially told the judge “get it over with quickly” so that it could appeal his ruling.

And that brings us to the dismissal of the case today, a surprise given the Chamber’s defiant stance just a few days ago. The remaining claims in the case were dismissed “without prejudice,” meaning that the Chamber could re-file them at a future point in time if it chooses. And neither side will be paying the other’s legal fees; they are simply walking away.

Apart from the fact that the original collective-bargaining ordinance had its most significant issue, wages, stripped out, there was an additional piece of legislation passed by the City late last year that dramatically changes the context for this case: the Mayor’s “Fare Share” legislation. That set of bill established a minimum wage for TNC drivers, added some new protections for drivers, and created a new Driver Resolution Center to advocate for drivers paired with a formal arbitration process for handling disputes over deactivations. That represents a significant shift away from a legally murky collective bargaining approach for TNC drivers, who as of the moment are still recognized in most jurisdictions as independent contractors, to a regulatory approach that has strong underpinnings and is much more within the city’s wheelhouse.

The City of Seattle, Uber and Lyft issued a joint press release today noting the dismissal of the case and highlighting their agreement to work together on developing a “new social safety net” for TNC drivers and on the implementation of the Fare Share legislation. The City’s statement states that Uber and Lyft have agreed not to challenge the Fare Share bills in court or by ballot measure.

With the city’s regulatory framework moving forward, it remains to be seen whether collective bargaining efforts on behalf of drivers will still move forward — at this point it’s up to unions to sign up drivers to be represented.

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