Chamber of Commerce v. City of Seattle
Seattle files Ninth Circuit appeal
Federal judge grants Chamber's motion for preliminary injunction of Seattle drivers' union ordinance
U.S. Chamber renews lawsuit challenging Seattle drivers’ union ordinance
The U.S. Chamber of Commerce renewed litigation in the U.S. District Court for the Western District of Washington to challenge a Seattle ordinance that authorizes union organizing of for-hire drivers working as independent contractors, highlighting that the ordinance will burden innovation, increase prices, and reduce quality and services for consumers.
The Chamber’s complaint notes that in addition to being in violation of federal law, implementation of the ordinance would result in a balkanized set of labor schemes that would negatively impact the sharing economy and jeopardize the flexible work schedules and earnings opportunities that economy provides to millions of people nationwide.
The lawsuit argues:
“Seattle’s unprecedented attempt to permit independent contractors to organize a union is clearly inconsistent with federal antitrust and labor laws. 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.”
“[T]he City’s one-of-a-kind ordinance authorizes drivers to unionize and collude through collective bargaining over the price terms of their contracts with driver coordinators. The Ordinance turns labor law on its head, treating independent businesses as employees, and flouts antitrust law, allowing independent economic actors to fix prices. As such, the Ordinance is preempted by both the Sherman Act and the National Labor Relations Act.”
“This is horizontal price-fixing—a classic per se antitrust violation. The Supreme Court has repeatedly affirmed that the antitrust laws prohibit independent contractors from forming or joining unions to collectively bargain, and the Federal Trade Commission has consistently maintained that state and local enactments authorizing collective bargaining by independent contractors violate the antitrust laws.”
"If the City implements and enforces the Ordinance, other local governments may also seek to regulate collective bargaining for for-hire drivers. Subjecting independent-contractor relationships to thousands of different bargaining schemes is contrary to congressional intent in enacting the NLRA to leave these relationships unregulated.”
“[T]he sheer novelty of the City’s attempt to regulate independent contractors should raise red flags. Plaintiff is unaware of any other state or local law authorizing independent contractors to collectively bargain; the City’s theory is unprecedented. Given the many decades of union efforts to organize various types of workplaces, including multiple efforts to claim that individuals working as independent contractors are actually employees, it is implausible that unions have inexplicably ignored for decades a prime opportunity to expand their membership.”
Timothy J. O'Connell of Stoel Rives LLP and Michael A. Carvin, Jacqueline M. Holmes, Christian G. Vergonis, and Robert Stander of Jones Day served as co-counsel for the U.S. Chamber of Commerce in this case on behalf of the U.S. Chamber Litigation Center.