The Ninth Circuit Court of Appeals has temporarily blocked enforcement of the City of Seattle’s Ordinance 124968, which grants certain collective bargaining rights to independent contractors who drive for ride-sharing companies like Uber.
The Ordinance, which was effective in January 2016, allows eligible drivers to collectively bargain with the companies that contract with them. Legal challenges against the Ordinance were expected.
The dispute has an extended procedural history. Soon after Teamsters Local 117 sought to represent certain drivers in collective bargaining, the U.S. Chamber of Commerce, and Chamber of Commerce members Uber Technologies, Inc. and Lyft, Inc. (collectively, the “Chamber”), sought to enjoin enforcement of the Ordinance in federal district court on the grounds that it is preempted by the National Labor Relations Act and otherwise violated federal anti-trust laws. The district court, recognizing the “novel” issues raised by the Ordinance and the Chamber’s challenge, preliminarily blocked enforcement of the Ordinance, finding the public would be “well-served by maintaining the status quo while the issues are given careful judicial consideration.” Thereafter, the court changed course and granted the City’s motion to dismiss, ruling the Ordinance was lawful and enforceable. Nonetheless, the court decided to keep in place its preliminary injunction, pending resolution of a “companion case” similarly challenging the Ordinance.
Later, the district court denied the Chamber’s motion to keep the preliminary injunction in place until resolution of its appeal, finding the Chamber had failed to state a claim with respect to its challenges against the Ordinance, which demonstrated, it said, that the Chamber similarly failed to establish a “likelihood of success on the merits,” a necessary factor in seeking injunctive relief.
The Chamber’s “emergency motion for injunctive relief pending appeal” was granted “temporarily” by the Ninth Circuit to give that court an “opportunity to consider the emergency motion.” A ruling is expected after September 7.
In addition to the significant impact this case will have on ride-sharing operations in Seattle, this case will provide a roadmap for other states and localities that wish to regulate collective bargaining rights of their local ride-sharing operations, in addition to a broader range of services provided by independent contractors who otherwise are unable to collectively bargain under the protections of the National Labor Relations Act.
This case is far from over, and, given the extensive impact the ruling will have, it may require the Supreme Court’s final word.