Uber and Lyft Drivers in Seattle Get Rights To Unionize
This was a bit shocking to me this morning. On Monday, Seattle put a measure up to vote to allow Uber, Lyft and Taxi drivers to unionize over pay and working conditions. The ordinance was approved and according to KiroTV, the ordinance can become law even without the mayor’s signature. Despite the legal issues surrounding this measure, this may encourage more states to enact similar laws to protect their constituents from large corporations, such as Uber and Lyft.
This ordinance requires companies that hire independent contractors as drivers to bargain with drivers if a majority show interest to form a union. “Drivers would be represented by nonprofit organizations certified by the city. Under the proposed ordinance, the city will give certified nonprofit organizations a list of eligible drivers at each company, and the groups must show that a majority of drivers of each company want representation. The organizations would then bargain on behalf of those drivers.”
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This measure may be not be legal due to the National Labor Relations Act, which prevents collective bargaining rights to independent contractors.
According to KiroTV, “San Francisco-based Uber and others say federal labor law prevents cities from regulating collective bargaining for independent contractors, and the ordinance would violate federal antitrust laws. Opponents also argue it would be costly for the city to implement, it would violate drivers’ privacy since their information would be given to the organization, and it would stifle the growth of the on-demand economy.”
“It is a virtual certainty that the ordinance will be challenged in court if it is enacted,” said Charlotte Garden, an assistant law professor at Seattle University. “I anticipate that other cities will consider similar measures, but they may wait to see whether the ordinance survives review by a federal court. Legal experts have been mixed on how the bill would be challenged in court, including whether the ordinance violates antitrust laws because it would allow drivers to get together and set rates.”
According to King5, Jack Kirkwood is a law professor at Seattle University who has spent decades studying federal antitrust law and the ordinance approved on Monday concerns him for several reasons.
“This decision is problematic from an antitrust point of view. The problem occurs because these drivers appear to be independent contractors, not employees,” said Kirkwood. “If they were employees, they could unionize without creating an antitrust issue. But as independent contractors, they cannot agree on the wages they demand, because that would be illegal price fixing, unless they have an exemption.”
That exemption, he says, can only be granted by the state. That’s where Kirkwood feels Seattle really messed up.
“The state, not the city, has to clearly articulate and declare that it wants to replace competition in the labor market with state regulation,” said Kirkwood. “And if the city council is truly serious about this, they could go to the state legislature and get the legislature to declare clearly that they want to allow drivers of cabs and for-hire vehicles to unionize. And then they could establish a stronger, more robust form of state regulation.”
Kirkwood says those are likely the very same issues lawyers for Uber and Lyft would raise in federal court, if the companies decide to sue.
“Federal court will takes these antitrust concerns very seriously,” said Kirkwood. “And the city will have arguments, but they strike me as very weak. I’ve talked to lawyers who helped work on the ordinance. So I think they were aware of the issues but didn’t seem willing to go far enough to produce an ironclad or bulletproof ordinance. They’ve left major issues outstanding.”
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