Seattle's first-in-the-nation law allowing drivers-for-hire to unionize was blocked by a federal judge, giving a legal boost to ride-hailing companies such as Uber Technologies Inc. and Lyft Inc.
U.S. District Judge Robert Lasnik in Seattle granted a request by the U.S. Chamber of Commerce to block the city's ordinance before it goes into effect. The organization argued the law improperly treats independent contractor drivers as employees because it allows them to unionize and collude through collective bargaining over their fares. Uber and Lyft are members of the chamber.
The fight over whether Uber and Lyft drivers can unionize is part of a larger conflict over how sharing economy companies treat their workforce. Uber's business model is under attack worldwide by the taxi industry, local governments and drivers. In March, Seattle's law survived an attack by Uber after a Washington state judge rejected the company's arguments that there are flaws in the local collective bargaining process.
Seattle's law "turns labor law on its head, treating independent businesses as employees, and flouts antitrust law, allowing independent economic actors to fix prices," the chamber argued in a legal filing in its federal lawsuit attempting to block the measure.
Saying the city's ordinance would likely disrupt the ride-hailing companies' businesses in "fundamental and irreparable ways," Lasnik ruled that it should be blocked while the case is decided.
"There can be no doubt that ride-share companies such as Uber and Lyft have, at a truly startling rate, created havoc in this industry using a business model that simply did not exist before its recent technological development." Lasnik said in his ruling. The judge said it was uncertain, though, whether state law allows the city's ordinance.
The chamber pursued the court order with urgency, arguing that the Teamsters union has demanded that it turn over a confidential list of contracted drivers for Uber, Lyft and the dispatch service Eastside for Hire Inc. to unionize them. Turning over the list will cause "irreparable harm," the chamber argues, because it'll be forced to turn over personal identifying information of drivers and incur costs and expenses not completely covered by money damages.
Seattle argued the lists contain information that is already publicly available. The city said Lasnik should deny the chamber's request because its labor and antitrust claims are likely to fail.
Allowing for-hire drivers to collectively negotiate is "a means to create a safer, more reliable for-hire industry," Seattle argued in a court filing. "Stopping this first-of-its-kind law in its tracks, based on speculative and non-existent harms is not in the public interest."
Lasnik said the chamber had raised "serious questions that deserve careful, rigorous judicial attention, not a fast-tracked rush to judgment based on a date that has no extrinsic importance."
"The court emphasizes that this order should not be read as a harbinger of whatthe ultimate decision in this case will be when all dispositive motions are fully briefed and considered," he added.
The case is Chamber of Commerce v. Seattle, 17-cv-00370, U.S. District Court, Western District of Washington (Seattle).
-- Bloomberg News
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