SEATTLE (CN) – The Ninth Circuit on Friday revived the U.S. Chamber of Commerce’s challenge to Seattle’s ordinance allowing app-based drivers like Uber and Lyft to unionize, finding the law could violate federal antitrust rules.
The appellate panel remanded the case to U.S. District Judge Robert Lasnik, who dismissed the claims in August. Lasnik found the ordinance does not violate federal laws and state law does not pre-empt cities from allowing independent contractors to organize.
But the three-judge panel said the ordinance is not exempt from the Sherman Act’s prohibition on price-fixing.
The state does not have a clearly-articulated policy “authorizing private parties to price-fix the fees for-hire drivers pay to companies like Uber or Lyft in exchange for ride-referral services,” according to the opinion written by U.S. Circuit Judge Milan Smith.
State law allows Seattle to regulate rates transportation companies charge to passengers, but not fees for-hire drivers pay to ride-referral services and “state-action immunity is not satisfied in this case,” the ruling says.
The panel affirmed Lasnik’s dismissal of claims that the ordinance is pre-empted by the National Labor Relations Act.
The case will be sent back to Lasnik for reconsideration of antitrust claims.
U.S. Circuit Judge Mary Murguia and U.S. District Judge Eduardo Robreno, sitting by designation from the Eastern District of Pennsylvania, rounded out the panel and joined Smith’s opinion.
Seattle became the first city in the United States to allow for-hire drivers to collectively bargain with employers when the ordinance passed in 2016. The law allows both cab drivers and drivers for ride-hail services like Lyft and Uber to negotiate pay and working conditions through a representative.