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A higher court rules in Uber and Lyft unionization—and it’s complicated

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The short version: more court ahead


A 2015 Seattle law allowing drivers for companies like Uber and Lyft to unionize has been blocked—again—after an appeal to the ninth circuit of the U.S. Court of Appeals, although the ruling still has interesting implications for independent contractors.

For-hire drivers with ride-hailing services like Uber, Lyft, and Eastside for Hire started organizing with Teamsters 117 in 2014, and the next year, the Seattle City Council passed a law unanimously allowing those drivers to collectively bargain. The U.S. Chamber of Commerce sued, arguing that because drivers for Uber and similar companies are contractors and not technically employees, they don’t have the right to organize under the National Labor Relations Act (NLRA). The Chamber also argued that the drivers’ collective bargaining would violate federal antitrust law.

Seattle city attorneys argued that the city can provide protections for the drivers even if federal law doesn’t.

A federal judge dismissed the suit back in August, and, after a second lawsuit was dismissed, the law looked good to go. But just a couple of days later, the Chamber suit was appealed. This time around, a three-judge panel ruled somewhere in between: The law is not exempt from federal antitrust law, but it also doesn’t violate the NLRA.

The court also ruled that the state didn’t play a large enough role and doesn’t make specific-enough allowances, reported Bloomberg. This is something that, according to Seattle University law professor Charlotte Garden and Wayne State University law professor Sanjukta Paul, could be remedied by the State Legislature.

While the decision keeps the law tied up in red tape, Seattle City Attorney Pete Holmes was quick to point out the silver lining: Under the current ruling, a city can pass a law allowing independent contractors to unionize.

“The City is very pleased with the court’s unequivocal holding that a City law allowing independent contractors to engage in collective negotiations is not preempted by federal labor law,” said Holmes in a statement. “The Court reiterated that federal law does not cover independent contractors, and that state and local governments are free to regulate their labor relations in the manner they deem most appropriate.”

The other part of the suit concerning antitrust law has a couple of more legal steps to go through. “The Court did not consider or comment upon the merits of the U.S. Chamber of Commerce’s federal antitrust claims,” clarified Holmes, “and instead remanded the case to the district court so that court could consider the antitrust claims in the first instance. The City is currently evaluating its next steps consistent with its commitment to protecting worker rights.”

Spokespeople with Teamsters 117 expressed frustration at the decision. “Drivers are deeply disappointed with today’s decision, which continues to delay our right to unionization,” said Don Creery, an Uber and Lyft driver and member of the leadership council of union-backed App-Based Drivers Association, in a statement. “Anti-trust laws were put in place to protect the little guy from monopolistic practices from large corporations, not to shield a company like Uber.”

“We are disappointed by the Court’s ruling that continues to block drivers from having a voice,” said John Scearcy, Secretary-Treasurer of Teamsters Local 117, in a statement.

Uber, meanwhile, kept its response short and optimistic: “The court’s decision is a win for rideshare drivers, riders, and the entire Seattle community,” said Uber spokesperson Caleb Weaver.

Lyft was also pleased. “This positive development will maintain the flexibility of drivers to choose when, where and for how long they drive,” said Lyft spokesperson Adrian Durbin, “the very things that make Lyft so attractive to drivers and useful for passengers.”