The US Chamber of Commerce sued to stop a new Seattle ordinance that could pave the way for independent contractor drivers to unionize. The chamber warned in a court filing that the law could “balkanize” the market for independent contractor services.
“Absent judicial intervention, the city of Seattle and thousands of other municipalities would be free to adopt their own disparate regulatory regimes, which would Balkanize the market for independent-contractor services and inhibit the free flow of commerce among private service providers around the nation,” the lawsuit claims.
Seattle’s first-of-its-kind law includes drivers at firms such as Uber, Lyft and traditional taxi companies. The law took effect in January.
“Under the guise of regulating public safety, the ordinance at issue would, for the first time anywhere in the United States, insert a third-party labor union into the relationship between independent contractors and companies and require agreements that would fix wage and prices in violation of the nation’s anti-trust and labor laws,” according to the lawsuit.
The Seattle City Council first approved the law in December. City Council member Mike O’Brien at the time cited concerns some drivers were making less than minimum wage and were excluded from a number of labor standards.
Under the law, transportation companies can be required to collectively bargain with a designated union, according to the chamber. But it argues that such a rule is not legal.
“In amendments to the National Labor Relations Act, Congress expressly excluded independent contractors from collective-bargaining requirements,” said Randel Johnson, senior VP of Labor, Immigration and Employee Benefits for the US Chamber. “The city of Seattle — or any state or other municipal government — cannot dictate otherwise.”
Independent contractor status for drivers remains an issue, especially for Uber and Lyft, which rely on independent contractor drivers.
The AFL-CIO recently weighed in with a statement that gig economy workers, such as Uber and Lyft drivers, be classified as employees, not independent contractors. And Teamsters affiliate, the App-Based Drivers Association, announced a ride-share startup in Edmonton, Canada, that would allow its drivers to unionize. The ride-share firm is called TappCar and would compete with Uber and Lyft.
Separately, both Uber and Lyft still face lawsuits over misclassification. Lyft agreed to settle one lawsuit in January; it would pay $12.25 million and drivers would remain independent contractors. That case is still in play after a judge raised questions about the settlement. Another case involving Uber and independent contractors who claim they were misclassified is still set to go to trial on June 20. However, California’s Employment Development Department recently awarded unemployment compensation to a former Uber driver from California, ruling he was an employee, according to news reports. The National Labor Relations Board also accused Uber of impeding a probe in another case, according to another news reports.