SEATTLE (CN) – An appellate panel grilled attorneys representing Seattle in a hearing over the constitutionality of the city’s first-of-its-kind ordinance allowing Uber and Lyft drivers to unionize, repeatedly asking why the rules didn’t violate antitrust laws.
In 2016, Seattle became the first city in the United States to allow for-hire drivers to collectively bargain with employers. 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.
In March 2017, the Chamber of Commerce and several individual drivers sued the city in two separate suits, claiming the ordinance violates and is preempted by the Sherman Antitrust Act and the National Labor Relations Act.
U.S. District Judge Robert Lasnik dismissed the claims in August, finding the ordinance does not violate federal laws and state law does not pre-empt cities from allowing independent contractors to organize.
The Chamber and drivers appealed to the Ninth Circuit and Lasnik ordered an injunction preventing Seattle from enforcing the law pending appeal.
On Monday, both groups tried to persuade a three-judge appellate panel to strike down the ordinance.
Michael Carvin, representing the Chamber of Commerce, argued the city can’t regulate compensation for drivers. As an example, Carvin said Seattle could legally regulate emergency room services, but could not dictate the pay of doctors or have a say in their collective bargaining.
Carvin argued that municipalities can’t exempt federal labor laws because Congress sets “national uniformity.”
Michele Arington, representing the Federal Trade Commission, who filed an Amicus brief in support of the Chamber, said the ordinance permits private parties to collude on ride prices, an antitrust violation.
Seattle Assistant City Attorney Michael Ryan told the panel the statute was about “safe and reliable transportation.”
Judge Milan Smith admonished Ryan for dancing around the question of price fixing.
“Isn’t that what this ordinance is all about?” Smith asked.
Ryan countered the law was about safety, and said studies have shown that drivers who receive low pay are sometimes working 18 hours a day, sleeping in their car and not making safe decisions.
“You seem to be reluctant to agree that we have two private parties that set rates,” Smith said, referring to the proposed union representatives and the ride-share companies.
“I’m struggling with that,” Smith said.
William Messenger, representing drivers who objected to unionization, said the law violated the National Labor Relations Act because it “coerces” employers to do business with a union.
“All Uber and Lyft drivers will be subject to union representation,” Messenger said.
The panel did not say when they will rule, but the injunction on enforcement will remain in place until a decision is handed down.
Eastern Pennsylvania Senior District Judge Eduardo Robreno and Circuit Judge Mary Murguia also sat on the panel.
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