A landmark law giving drivers of app-based transportation companies, such as Uber and Lyft, the right to collectively bargain is not preempted by the National Labor Relations Act, a three-member panel of the Ninth Circuit Court of Appeals has ruled. U.S. Chamber of Commerce v. City of Seattle, No. 17-35640 (9th Cir. May 11, 2018).

Among other things, the NLRA regulates union activity and collective bargaining among almost all private-sector employees in the United States. The Seattle law affords covered drivers with rights analogous to those accorded employees under the NLRA, such as the right to select a representative to negotiate certain terms and conditions of employment.

The Court also ruled the law is not exempted from the Sherman Antitrust Act, under the Sherman Act’s exemption for states to enact laws that regulate competition. (The Sherman Act prohibits price-fixing and other practices that inhibit competition.) The Ninth Circuit panel decided that Seattle’s law did not meet either of the exemption’s requirements. First, the law does “not ‘plainly show’ that the Washington legislature ‘contemplated’ allowing for-hire drivers to price-fix their compensation.” Second, “[i]t is undisputed that the State of Washington plays no role in supervising or enforcing the terms of the City’s ordinance,” the Court said, and the lack of active state supervision meant the “active-supervision requirement” of the exemption also was not met.

The Seattle City Council passed the law on December 13, 2015; it took effect in January 2016. From the outset, the law faced numerous legal challenges, with advocates for businesses and employees weighing in. On its face, the law is intended to improve public health, safety, and welfare by providing Seattle with a means to regulate for-hire and taxicab transportation services.

In addition to opening the door to further legal challenges under the Sherman Act, the panel’s ruling offers a potential silver-lining to workers’ rights advocates. By ruling that the law was not preempted by the NLRA, efforts to organize independent contractors, who are exempt from the NLRA, may increase through the passage of state laws similar to Seattle’s.

Please contact a Jackson Lewis attorney if you have any questions.

 

 

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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. 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 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.