Landmark legislation giving drivers of app-based transportation companies, such as Uber and Lyft, the right to collectively bargain, has been passed by the Seattle City Council.  However, the new law faces significant legal hurdles.

Although the new law, enacted on December 13, on its face is intended to improve public health, safety and welfare by providing Seattle with a means to regulate for hire and taxicab transportation services, the ordinance attempts to provide these drivers, who may be independent contractors and therefore exempt from rights afforded by the National Labor Relations Act, with rights analogous to those accorded employees under that Act. The NLRA regulates unionization and collective bargaining among almost all private sector employees in the country.

Section 6.310.735 of the Seattle Municipal Code creates a process for designating Exclusive Driver Representatives (“EDRs”) and for overseeing the collective bargaining process. Any organization may apply to become a Qualified Driver Representative (“QDR”). The transportation company is then required to turn over driver contact information to all QDRs. The information can be used by the QDRs to solicit support from eligible drivers — drivers who have completed 150 trips in the 30 days before the commencement date established by Seattle’s Director of Finance and Administrative Services. To become an EDR of a company’s drivers, the QDR must submit a statement of interest from a majority of that company’s drivers to the Director, who will determine if the statements are sufficient, and certify the QDR as the EDR, if appropriate. If no QDR obtains majority support from the drivers, a QDR will not be certified; however, any QDR can request to repeat the process the following year.

Once an EDR is certified, the parties have 90 days to negotiate certain terms and conditions of work specified by the Director. Either party can request “interest arbitration” (placing their contract dispute in front of an arbitrator for resolution) if the parties are unable to reach agreement within the requisite time.  All agreements must be presented to the Director for review and to ensure compliance with the ordinance.

The ordinance also includes a QDR decertification process, an administrative and private right of action for enforcement, and hefty fines for any transportation company that fails to negotiate in good faith or provide contact information for drivers. The ordinance prohibits retaliation against any driver who participates in the representative process and adverse action against any driver who exercises rights provided by the ordinance.

Seattle Mayor Edward Murray criticized the legislation, citing several “flaws” and the unknown costs associated with the administration of the collective bargaining process. The legislation will become law without his signature.

The ordinance is expected to face significant legal challenges. First and foremost, the ordinance may be preempted by the NLRA, since the National Labor Relations Board may be called upon to decide whether the drivers are employees entitled to engage in collective bargaining under the NLRA, or independent contractors who are not. NLRA preemption may be invoked to oust the City of authority to regulate labor relations involving these drivers – to invalidate the ordinance. (This raises an interesting issue: would a finding of independent contractor status by the NLRB, making the drivers eligible to collectively bargain, nevertheless result in preemption of a city ordinance like Seattle’s?  Would this eligibility to collectively bargain paradoxically make the drivers-employees subject to NLRA coverage, preempting the city ordinance?) Second, if drivers are appropriately classified as independent contractors, the ordinance may run afoul of federal anti-trust laws against price-fixing.

Other municipalities likely are watching the Seattle ordinance closely, ready to enact their own ordinances if the Seattle version survives its challenges.

 

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Photo of Howard M. Bloom Howard M. Bloom

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues.

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Mr. Bloom speaks frequently to employer groups on a wide range of labor and employment law topics. He also has written extensively on labor and employment law for a variety of publications, including New England Business magazine, The Boston Globe and the Boston Business Journal. He also is editor of and a frequent contributor to the Jackson Lewis Labor & Collective Bargaining Blog.

While attending law school, he was the Executive Editor of The Advocate: the Suffolk University Law School Journal and President of the Student Bar Association.

Mr. Bloom is a diehard baseball fan. His first book, The Baseball Uncyclopedia: A Highly Opinionated Myth-Busting Guide to the Great American Game, was published in February 2006.

Photo of Philip B. Rosen Philip B. Rosen

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing…

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing Partner of the New York City office from 1989 to 2009.

Mr. Rosen lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media, reorganizations and reductions-in-force, purchase/sale transactions, sexual harassment and other workplace conduct rules, compliance with the Americans With Disabilities Act, wrongful discharge and other workplace litigation, corporate campaigns and union organizing matters, collective bargaining, arbitration and National Labor Relations Board proceedings. He has been quoted by the press on many labor matters, including the National Labor Relations Board’s recent initiatives on protected concerted activity and the proposed Notice Posting requirements.