The city of Seattle will ask a federal judge this week to throw out a lawsuit filed by the U.S. Chamber of Commerce over legislation that would allow Uber, Lyft and other “for hire” drivers to unionize.
The U.S. Chamber of Commerce filed the lawsuit in March against the city of Seattle, arguing the legislation violates several federal laws and would “burden innovation, increase prices, and reduce quality and services for consumers.” Oral arguments in the case are set for 1:30 p.m. Tuesday before Judge Robert S. Lasnik of U.S. District Court of Western Washington.
Court documents show the chamber is representing Uber and taxi company Eastside for Hire. The chamber argues that no municipal government — of which the chamber estimates there are more than 40,000 in the U.S. — has ever tried to implement a law that allows independent contractors to bargain collectively because it would make it much harder for people to go into business for themselves.
“Permitting thousands of separate and independent collective bargaining regimes for independent contractors would inflict significant costs upon the for-hire transportation sector, and more broadly, undermine the flexibility, efficiency and choice that accompany independent contractor arrangements,” according to the chamber complaint.
The city says in court documents the major parts of the law will not be implemented until 2017 at the earliest. City Attorney Pete Holmes argues the chamber can’t demonstrate what, if any, damage the ordinance would cause to companies like Uber since it hasn’t been implemented yet.
“It will be many months before the ordinance has an impact on anyone, and there is much uncertainty — most of which is outside the city’s control — about what might occur between now and then,” says the city’s motion to dismiss the lawsuit.
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.
When the city council passed this law, it was aware that litigation from companies like Uber and Lyft, or another party, could be coming. In January, after the Chamber made a statement opposing the legislation, O’Brien told GeekWire that it “doesn’t change our way of thinking.”
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.
The law also includes a “non-retaliation” clause that would prevent a company like Uber or Eastside from discouraging drivers from bargaining or punishing them as a result of it.
The city argues that Uber and Eastside could not possibly be impacted until all these steps are completed.
“This court should entertain questions about the ordinance’s legality only at the appropriate time, which is most certainly not before any implementing regulations have been issued and before any facts regarding its application to actual drivers and driver coordinators are available,” according to the city’s motion to dismiss.
The chamber counters that the future of the law is not in doubt, and all of these steps will be completed. And when that happens, the court will have a limited amount of time to decide future disputes unless the city voluntarily decides to delay enforcement of the ordinance.
Here are the key filings by the City of Seattle and the U.S. Chamber of Commerce.