This post has been updated with details of another lawsuit against the city of Seattle ordinance.
The U.S. Chamber of Commerce is going back to court to in an attempt to stop the first-of-its-kind law that lets drivers for ride-hailing companies decide if they want to bargain collectively.
The chamber on Thursday re-filed a lawsuit against the city of Seattle in U.S. District Court of Western Washington, arguing that the driver unionization ordinance violates federal labor laws related to independent contractors. In addition, the chamber pointed to a scenario where other cities will follow Seattle’s lead, creating a maze inconsistent of regulations for companies like Uber and Lyft to follow.
“Seattle’s unprecedented attempt to permit independent contractors to organize a union is clearly inconsistent with federal antitrust and labor laws,” a chamber spokesperson said. “If adopted more broadly, Seattle’s approach would lead to a morass of inconsistent state and local regulations that would stifle innovation and undermine economic growth.”
The chamber originally sued the city in March 2016, representing Uber and Eastside for Hire, but a federal judge threw out the complaint in August, coming to the conclusion that it was impossible to litigate any outcomes of the law because it was not yet in effect.
Last week, the city certified Teamsters Local 117 to represent drivers. According to the chamber lawsuit, Teamsters Local 117 notified Uber, Lyft and Eastside For Hire that it planned to be the exclusive representative for drivers contracting with those companies. The ride-hailing companies will be required to turn over driver contact information to organizers in early April, or face a $10,000 daily fine. That starts a 120-day clock for organizers to gather support from a majority of drivers for collective bargaining.
The chamber argued in its filing that these actions from Teamsters Local 117 showed that the law is far enough along that the time was right to re-file its lawsuit. The lawsuit, and a corresponding motion for a temporary restraining order, ask the court to block the city from implementing and enforcing the ordinance by April 3, when the ride-hailing companies will have to turn over driver lists.
“In less than four weeks, the Ordinance will, absent prompt judicial intervention, wreak irreparable harm that threatens the very existence of the for-hire and rideshare transportation system in western Washington through compulsory production of confidential, trade secret information and forced compliance with a novel regulatory scheme that is preempted by federal antitrust and labor law,” according to the chamber’s restraining order motion. “The Ordinance should be enjoined before it ever goes into effect.”
The chamber isn’t the only organization challenging the new law. In January, on the day the law was set to go into effect, Uber subsidiary Rasier filed a petition in King County Superior Court aiming to block many of the ordinance’s key provisions. A hearing on that dispute is set for next week.
UPDATE: A group of 11 drivers intends to file its own lawsuit in federal court seeking to block the ordinance. The suit claims that Seattle’s law violates federal labor law as well as drivers’ First Amendment rights of free speech and freedom of association by forcing them to unionize and pay dues.
“Expanding forced unionism to independent drivers is not only wrong, it is a violation of federal law and the First Amendment rights of drivers who never asked for and don’t want union officials’ so-called ‘representation,’” said Mark Mix, president of the National Right to Work Legal Defense Foundation, which is representing the drivers. “Big Labor’s one-size-fits-all, top down model is the very antithesis of ride-sharing which attracts drivers by connecting them with consumers and providing them the freedom to decide when to work and through which app to find customers.”
The unionization law, passed in 2015, gives drivers the ability to decide if they want to band together to negotiate pay rates and employment conditions, among other conditions. Currently, these drivers are considered independent contractors and are not protected by traditional labor standards — including Seattle’s $15 per hour minimum wage law. They also do not have collective bargaining rights covered by the National Labor Relations Act.
The most controversial aspect of the law concerns which drivers get to vote on collective bargaining. New drivers who have been with their respective ride-hailing companies for less than 90 days prior to the kick-off of the law on Jan. 17 will not get a vote, according to rules published late last year. Drivers also need to have made 52 trips starting or ending in Seattle during any three-month period in the last year to be eligible. These eligibility conditions have rankled the ride-hailing companies, which favor giving each driver a vote.
As the legal machinations play out, the city is continuing to implement the new law. The Department of Facilities and Administrative Services released several new rules earlier this week having to do with topics like arbitration and how organizations can in the future sign up to represent drivers. A public hearing on the new rules is scheduled for 1:30 p.m. March 21 at City Hall.
Below are the lawsuit and temporary restraining order motion from the chamber.