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For-hire drivers gather at a Seattle City Council meeting in December in support of a new law that paves the way for drivers to unionize. (GeekWire File Photo)
For-hire drivers gather at a Seattle City Council meeting in December in support of a new law that paves the way for drivers to unionize. (GeekWire File Photo)

Updated below with comments from Seattle City Councilmember Mike O’Brien.

The U.S. Chamber of Commerce is challenging the city of Seattle’s decision to give Uber, Lyft and other “for hire” drivers the right to unionize — saying it “violates federal law in at least two ways” and threatens to “burden innovation, increase prices, and reduce quality and services for consumers.”

Lily Fu Claffee
Lily Fu Claffee, chief legal officer for the U.S. Chamber of Commerce

In a statement released this afternoon, the Chamber’s chief legal officer, Lily Fu Claffee, cited Congressional amendments to the National Labor Relations Act that “expressly excluded independent contractors from collective-bargaining requirements.”

“The City of Seattle—and any state or other municipal government—cannot dictate otherwise,” Claffee said. “In addition, it’s antitrust 101 that independent actors cannot conspire with each other to set prices.”

“We are disappointed that the City Council has chosen to take Seattle down this unfortunate and expensive path,” Claffee added.  “Although litigation is always a last resort, the U.S. Chamber will not hesitate to engage the courts to enforce the law when lawmakers are dead set on stifling free enterprise and trampling the legal rights of the business community. Jurisdictions contemplating similar legislation should remember that enacting an unlawful ordinance like Seattle’s inevitably imposes significant litigation costs, thus wasting finite taxpayer resources.”

Amanda Eversole, president of the U.S. Chamber’s Center for Advanced Technology and Innovation, added, “It’s unfortunate that a city known for driving innovation has chosen not to protect the jobs and tax revenue created by a thriving technology sector, but rather has chosen to stifle innovation and limit consumers’ choices.”

The legislation, first introduced by Councilmember Mike O’Brien, creates a way for drivers to gain benefits typically given to employees, as a way to combat income inequality. The legislation was the first of its kind to pass in the nation. The Seattle City Council approved the legislation 8-0 in December. Seattle Mayor Ed Murray declined to sign the bill, citing “several flaws” including the burden of administering the law, but noted that it would still become law without his signature.

Update, Tuesday evening: O’Brien told GeekWire via phone this evening that the U.S. Chamber of Commerce “didn’t say anything in the release that was new,” adding that it “doesn’t change our way of thinking.” He said the Chamber represents the “farthest right wing of the business community.”

“What we’re trying to do is not anti-innovation, anti-technology, but rather how do we support workers, consumers and businesses moving forward in this new economy,” he said.

Seattle Councilmember Mike O'Brien speaks at a City Council meeting. (GeekWire File Photo)
Seattle Councilmember Mike O’Brien speaks at a City Council meeting. (GeekWire File Photo)

On the question of legality, he said, “We did pass legislation that is trying a new approach, and we know in Seattle that when we try new approaches, that means oftentimes we get to work through the courts.” He pointed out that that the city has done that successfully with its minimum wage law.

On the issue of contractors being excluded from organizing, he said, “What we’ve said all along is, the contract workers are exempt from federal labor law. That doesn’t mean they cannot organize. It just means they can’t organize under that law.”

That and the Chamber’s antitrust argument “are both questions that we spent a lot of time with our inside and outside legal experts working through this fall, and ended up in a place where we felt really good about the legislation and had a unanimous vote coming out of the City Council,” he said.

“This is important stuff we’re thinking of in Seattle,” he said. “The legislation we passed is specifically about folks in the TNC (transportation network company) and taxi for-hire industry in Seattle. It’s a very narrow field that we have explicit legislative authority over.”

However, he added, “What we’re trying to do has implications for what the workforce of tomorrow may look like, where everyone is part-time independent contractors, working for multiple players. We’re really trying to not be anti-innovation, not say the workplace needs to stay exactly the same as it has been for the past 100 years, but however people make a living to support their livelihood and their families, we want to make sure they can earn a living wage. … Let’s make sure it’s a fair structure that works for everyone, and this is a piece of that.”

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