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Drivers protest the Uber unionization law at City Hall in January. (GeekWire Photo / Taylor Soper)

A first-of-its-kind law that would allow Uber drivers in Seattle to organize as a union has been temporarily blocked by a judge in Seattle.

Federal Judge Robert Lasnik sided with the U.S. Chamber of Commerce (representing Uber, Lyft, and Eastside for Hire) in a motion for a temporary restraining order that prevents implementation of the controversial ordinance. The Chamber made the case for the injunction in the U.S. District Court of Western Washington last week.

The ordinance in question, first introduced by Seattle City Councilmember Mike O’Brien, creates an avenue for drivers to form a union and negotiate labor conditions like employees. Drivers are currently operating as independent contractors. The chamber called for the injunction because the law would have required ride-hailing companies to hand over driver contact info to Teamsters Local 117, the union certified to represent drivers, by April 3 so they could be contacted for a union vote. The union would have then had 120 days to get support for collective bargaining from a majority of drivers.

Here’s how Judge Lasnik explained his ruling:

The Court is cognizant of the fact that the public is interested in this litigation and its outcome: that the issues raised here may well impact not only for-hire transportation, but also other sectors of the economy that have come to rely heavily on independent contractors instead of employees. The issues raised in this litigation are novel, they are complex, and they reside at the intersection of national policies that have been decades in the making. The public will be well-served by maintaining the status quo while the issues are given careful judicial consideration as to whether the City’s well-meaning Ordinance can survive the scrutiny our laws require.

“We’re pleased that Judge Lasnik acknowledged that Seattle’s unprecedented attempt to permit independent contractors to unionize raises serious legal questions,” said Lily Fu Claffee, executive vice president of the U.S. Chamber’s Litigation Center. “The judge underscored the case’s public importance and its potential impact beyond for-hire transportation to other sectors of the economy that rely on independent contractors.”

Uber echoed the Chamber’s sentiments.

“The court recognized the complexity of the issues and the imminent risk to drivers, transportation companies, and the people of Seattle if the ordinance were allowed to proceed without careful legal review,” said Brooke Steger Uber’s Northwest GM. “We look forward to the court’s full consideration of the many serious legal questions about this ordinance as the lawsuit moves forward.”

The court was careful to explain that today’s ruling is just a pause to consider the issues and doesn’t indicate which side will win out in the end. The decision also applies to a lawsuit brought by the National Right to Work Legal Defense Foundation, on behalf of 11 Uber and Lyft drivers who oppose Seattle’s collective bargaining ordinance.

“The City notes that the court did not reach a final ruling on any claims, and in fact
the court emphasized that its ruling ‘should not be read as a harbinger of what the
ultimate decision in this case will be when all dispositive motions are fully briefed and considered,'” said City Attorney Peter Holmes in a statement. “So today is not the final ruling in the case.”

The collective bargaining ordinance is the first of its kind in the country. Two weeks ago, a King County judge rejected a request from Uber subsidiary Rasier to block several provisions of the ordinance.

Uber’s Northwest General Manager Brooke Steger said at a private event in Seattle last week that the service may not continue to operate in Seattle if the ordinance is implemented.

In Thursday’s hearing, the chamber’s lawyers argued the ordinance could lead to contractors “price fixing” under a union and said turning over contact information would violate drivers’ privacy laws. They also argued, as Uber has in the past, that providing data on their drivers would put the company at a competitive disadvantage.

Assistant City Attorney Michael Ryan rebuffed that claim.

“Notably, in the declarations, neither Uber nor Lyft say it would be competitive harm to give the [contact information] to the Teamsters,” he said. “It’s only competitive harm if the teamsters misuse it. Under the ordinance, they can only use it for one purpose and that’s to organize drivers.”

The chamber’s attorneys shot back, saying delivering the information to the Teamsters puts Uber and Lyft at a “heightened risk” of mishandling or hacking.

Thursday’s hearing was the U.S. Chamber’s second attempt to block implementation of the collective bargaining ordinance. The chamber originally sued the city early last year, three months after the Seattle City Council approved the union law. A federal judge dismissed the lawsuit because the ordinance had not yet gone into effect. The chamber is trying again, now that the ordinance has been enacted.

In addition to violating federal labor laws, the chamber also argues the ordinance could encourage other cities to enact similar legislation, creating a patchwork of inconsistent laws.

A spokesperson for Lyft said the company is “pleased the court has ruled that Seattle’s experimental law should not be implemented until the serious issues raised by the drivers are heard.”

Read the Judge Lasnik’s ruling below.

Seattle Uber Union Ruling by GeekWire on Scribd

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