(Bloomberg) -- Seattle’s first-in-the-nation ordinance allowing drivers-for-hire to collectively bargain is in jeopardy after an appeals court ruled it isn’t exempted from federal antitrust law.
The ruling is a boost to ride-hailing companies such as Uber Technologies Inc. and Lyft Inc. and the U.S. Chamber of Commerce, which have attacked the ordinance.
Seattle “has a hard road ahead” if it wants to preserve the ordinance, said Charlotte Garden, a law professor at Seattle University who had urged the San Francisco-based appeals court to uphold the measure’s legality.
The three-judge panel concluded Washington state didn’t authorize the law specifically enough, and didn’t play a role in supervising the collective bargaining process. The panel agreed with a lower court’s ruling that the Seattle law isn’t pre-empted by the National Labor Relations Act.
While Garden called the outcome unfortunate, she said “the other potential path forward for the law would be for the state to pass legislation allowing collective bargaining by drivers.”
The Seattle ordinance is one of several avenues that labor groups have pursued to organize ride-share drivers, whose legal status as employees or contractors is hotly contested. On Wednesday, congressional Democrats introduced a bill that would broaden the definition of an employee under the National Labor Relations Act so that more workers in the gig economy would qualify for collective bargaining rights.
Uber and Lyft however hailed the ruling as a win for drivers.
“This positive development will maintain the flexibility of drivers to choose when, where and for how long they drive,” Lyft spokesman Adrian Durbin said.
Seattle City Attorney Pete Holmes said the city is pleased with the part of the ruling that went its way and disappointed with the portion that didn’t.
“The city is currently evaluating its next steps consistent with its commitment to protecting worker rights,” he said in a statement.
The local Teamsters union said it’s reviewing the ruling.
The case is the U.S. Chamber of Commerce v. City of Seattle, 17-35640, 9th U.S. Circuit Court of Appeals (San Francisco).
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