{"id":6195,"date":"2019-03-08T19:23:21","date_gmt":"2019-03-08T23:23:21","guid":{"rendered":"http:\/\/ncjolt.org\/?p=6195"},"modified":"2020-06-04T20:52:26","modified_gmt":"2020-06-04T20:52:26","slug":"anti-competitive-or-a-good-policy-for-workers-uber-and-seattle-continue-their-battle-over-whether-uber-drivers-can-unionize","status":"publish","type":"post","link":"https:\/\/journals.law.unc.edu\/ncjolt\/blogs\/anti-competitive-or-a-good-policy-for-workers-uber-and-seattle-continue-their-battle-over-whether-uber-drivers-can-unionize\/","title":{"rendered":"Anti-Competitive or A Good Policy for Workers? Uber and Seattle Continue Their Battle Over Whether Uber Drivers Can Unionize."},"content":{"rendered":"\n

The U.S. Chamber of Commerce and an Uber\nsubsidiary have asked a\nWashington federal judge to invalidate Seattle’s ordinance<\/a> letting ride\nhailing app-based drivers unionize. The allege the city\u2019s law violates federal\nantitrust law by allowing independent contractors to unionize and fix prices.<\/p>\n\n\n

In 2015, Seattle became the first city to allow Uber and Lyft drivers the right to unionize. The bill, co-sponsored by Seattle council members Mike O\u2019Brien and Nick Licata<\/a>, allows drivers for ride-hailing companies, as well as taxis and other for-hire vehicles, to collectively bargain for things like higher pay and better working conditions. Lawmakers felt the bill was necessary after witnessing how poor the working conditions were for drivers. <\/p>\n\n\n

The dispute is now back in the district court, where the parties are battling over whether the per se rule of illegality or the rule of reason applies to analyzing the Chamber and Rasier\u2019s claims of violations of federal antitrust law.<\/p><\/blockquote>\n\n\n

Uber immediately responded by challenging\nboth the legality of the law as well as the policy reasons for passing the law.\nUber stated that its ride sharing platform creates \u201cnew opportunities for many\npeople to earn a better living on their own time and terms.\u201d The company\nreiterated that drivers like the flexibility and independence Uber affords them\nand this new ordinance will allow unionized\nindependent contractors to muscle \u2014 such as part-time drivers<\/a> \u2014 by preventing\nthem from contracting with ride-hailing companies outside the terms of a\ncollective bargaining agreement.<\/p>\n\n\n

\u201cCertain collusive practices \u2014 like\nhorizontal group boycotts and horizontal price fixing \u2014 are condemned as per se\nviolations, which means they are unlawful on their face regardless of market\nconditions or any purported economic or policy justifications,\u201d the Chamber and\nRasier, the Uber subsidiary, said. \u201cBecause the group boycotts authorized and\nfacilitated by the ordinance are illegal per se, the ordinance is\npreempted by the Sherman Act<\/a>.\u201d<\/p>\n\n\n

This case is back in Washington federal\ncourt on remand from the Ninth Circuit, which revived the Chamber’s lawsuit\nlast May. The appeals court partially reversed an August\n2017 dismissal<\/a>\nof the suit, after finding that the state-action immunity doctrine did not save\nthe ordinance from preemption by the Sherman Act.<\/p>\n\n\n

The dispute is now back in the district court, where the parties are battling over whether the per se rule of illegality or the rule of reason applies to analyzing the Chamber and Rasier\u2019s claims of violations of federal antitrust law.<\/p>\n\n\n

The argument that the Ordinance runs afoul\nof these federal antitrust laws, is that under section 1 of the Sherman Antitrust\nAct, a \u201ccontract, combination in the form of trust or otherwise, or conspiracy,\nin restraint of trade or commerce among the several States\u201d<\/a> is unlawful. This\nprovision has been held to prohibit independent economic actors, such as\nindependent contractors, from colluding on the prices they will accept for\ntheir services or otherwise engage in concerted action in the marketplace that\nwill have an anticompetitive effect. <\/p>\n\n\n

During the Ninth Circuit argument,\nbusiness lobbying groups hailed this as a classic example of per se illegal\nconduct because the law is unlawful on its face. The NFIB argued that, \u201cwhen it enacted\nthe NLRA, Congress intentionally chose to deny collective bargaining rights to\nindependent contractors<\/a> because they are\nengaged in their own business ventures.\u201d<\/a> For this reason, The NLRA preempts state\nand local regulation purporting to authorize collective bargaining for\nindependent contractors.<\/p>\n\n\n

On the flip side, Seattle argues they are exempt from\nantitrust liability<\/a>\nbecause of the state action doctrine which was articulated in the Supreme Court\ncase, Parker v Brown<\/em>. The two-prong\ntest for meeting this standard is met when the law is: (1) \u201cclearly\narticulated and affirmatively expressed as state policy\u201d, and (2) the policy is\n\u201cactively supervised by the state.\u201d <\/p>\n\n\n

Seattle argues the second prong of the\ntest is not a major issues since the ordinance\nestablishes a regulatory scheme that requires direct review<\/a> and approval of\nprivate action by government officials before any agreement between independent\ncontractors becomes effective. They also argue that they did foresee that there\nwould be anti-competitive effects of the law and in fact meant for those to\nhappen as a matter of policy. The ordinance\ncontains detailed legislative findings indicating that the City of Seattle has\nidentified concerns relating to the safety and reliability of for-hire\ntransportation services<\/a>. <\/p>\n\n\n

The Ninth Circuit stated that the Seattle\nordinance failed to meet the two-prong test, but the ordinance was not\nheld to be per se illegal<\/a>. This gave Seattle another chance to tweak the ordinance\nand bring the issue back to court to argue that it does pass the two-prong test\nand is exempt from anti-trust liability. <\/p>\n\n\n

Uber has long been allowed to treat workers poorly and pay them meager amounts of money because they are \u201cindependent contractors\u201d and not \u201cemployees.\u201d More and more Uber drivers drive full time and depend on the job as their primary source of income. Seattle was merely trying to put more power back into the hands of these workers. Uber is claiming that this policy hurts those that only drive part time and like the flexibility of the job, but is protecting a few part time drivers worth hurting those that depend on the job full time? This could be Seattle\u2019s last chance in court to uphold the validity of the law. The case will hinge on which policy is more important- the anticompetitive effects of independent contractors unionizing or a state giving workers, who receive poor wages and few benefits, the ability to fight for their rights. <\/p>\n\n\n

Kollin Bender, 25 February 2019<\/p>\n","protected":false},"excerpt":{"rendered":"

The U.S. Chamber of Commerce and an Uber subsidiary have asked a Washington federal judge to invalidate Seattle’s ordinance letting ride hailing app-based drivers unionize. The allege the city\u2019s law violates federal antitrust law by allowing independent contractors to unionize and fix prices. In 2015, Seattle became the first city to allow Uber and Lyft …<\/a><\/p>\n","protected":false},"author":1,"featured_media":6196,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[51],"tags":[],"_links":{"self":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/6195"}],"collection":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/comments?post=6195"}],"version-history":[{"count":1,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/6195\/revisions"}],"predecessor-version":[{"id":6840,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/6195\/revisions\/6840"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media\/6196"}],"wp:attachment":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media?parent=6195"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/categories?post=6195"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/tags?post=6195"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}