Lawyers representing the U.S. Chamber of Commerce and the City of Seattle met in court Tuesday for the first of what could be many showdowns in a lawsuit over legislation that would allow Uber, Lyft and other “for hire” drivers to unionize.
In Tuesday’s hearing, the city asked Judge Robert S. Lasnik of the U.S. District Court of Western Washington to throw out the case. Lasnik did not make a ruling, but he said a decision could come as soon as later this week or by the first part of August.
“It’s a great issue and certainly involves new technology and cities all over the country are reacting to these for-hire agencies,” Lasnik said. “They certainly have done some tremendous benefits, but there’s also regulatory issues, and I’m going to take a little bit of time to make sure I get this as right as I can.”
The U.S. Chamber of Commerce filed the lawsuit in March against the City of Seattle, arguing that the legislation violates several federal laws and would “burden innovation, increase prices, and reduce quality and services for consumers.” Court documents show the Chamber is representing Uber and taxi company Eastside for Hire.
The legislation, first introduced by Seattle City Councilmember Mike O’Brien, creates a way for drivers to gain benefits typically given to employees, as a way to combat income inequality. The ordinance, which has yet to take effect, was the first of its kind to pass in the nation and the Seattle City Council approved the bill 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.
The city argued that the law has not been implemented yet, and the chamber is using a “crystal ball” legal strategy of prematurely litigating potential issues before they actually surface.
“The Chamber wants this court to issue an advisory opinion on a first-of-its-kind law well in advance of any of its members actually suffering an injury or any real or concrete application of the law,” Seattle Assistant City Attorney Michael Ryan said.
Noel J. Francisco, partner at the Washington D.C. office of Jones Day, the firm representing the chamber, argued against multiple parts of the ordinance. He said an “anti-retaliation” clause that would prevent a company like Uber or Eastside from discouraging drivers from bargaining is already in place and making an impact. Eastside wanted to make its drivers sign an agreement not to unionize, but potential enforcement of the anti-retaliation clause made the company think twice.
“Unions are trying to organize drivers in cities across the country, including cities that don’t have an ordinance like Seattle has enacted,” Francisco said. “It would be perfectly reasonable for (Uber or Eastside) to want to get its drivers to agree not to join the unionization effort even if there is no ordinance like this one.”
The chamber recently added a new front in its case against the city. It focuses on a license fee the city charges rideshare providers like Uber to regulate the nascent industry. It was increased from 10 cents per trip to 14 cents recently, and the chamber argues that price increase has hurt Uber’s business. The city countered that rideshare companies like Uber and Lyft have been so successful in Seattle that it needed a new data system to track and regulate them, and the fee increase is separate from the unionization ordinance.
Councilman O’Brien’s unique plan is to let drivers that have a minimum threshold of trips join a “Driver Representative” organization that would then allow them to negotiate pay rates and employment conditions. These organizations would have 120 days to demonstrate that “a majority of drivers for a specific company choose to be represented.” From there, they would be able to participate in collective bargaining conversations on behalf of their drivers.
Charlotte Garden, an assistant professor of law at Seattle University, expects the case to continue beyond Tuesday’s hearing. She said this hearing may go the city’s way because there are so many different groups affected by the law — the city, drivers, unions, rideshare and taxi companies — and it is unclear what they will do until the ordinance is implemented.
“I think it’s likely the court will hold that the chamber was premature, and that we will all be back here doing this later in 2016 or early 2017,” Garden said.