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January 19, 2016Client Alert

Collective Bargaining Rights Granted for Uber Drivers, Independent Contractors

On December 14, 2015, the Seattle City Council unanimously approved legislation giving Uber, Lyft and other “for hire” drivers the right to unionize and negotiate their pay and working conditions. The ordinance will apply to companies that hire, contract with or partner with at least 50 for-hire drivers in Seattle. Uber and Lyft drivers are considered to be independent contractors, which is why such legislation is groundbreaking. Independent contractors do not have the right to unionize under the National Labor Relations Act—the federal labor law that provides employees with, among other things, collective bargaining rights.

In a recent Wall Street Journal publication, Reuel Schiller, a professor of University of California’s Hastings College of the Law, said, “If a state wanted to create a regime where independent contractors are able to unionize, there’s nothing in the National Labor Relations Act that would stop them from doing that.” On the other hand, ride-hailing services could argue that allowing drivers to form unions could raise antitrust concerns since it might enable price-setting by thousands of contractors, each operating as independent businesses, Schiller said.

This legislation will likely face significant legal challenges and opposition from employers claiming federal preemption. Under the ordinance, approved organizations will be allowed to represent drivers, provided that such organizations submit to the director of Seattle’s Department of Finance and Administrative Services statements of interest from a majority of a company’s qualifying drivers. The method will be card-check, not election.

Other cities will likely wait and see how the Seattle legislation plays out in the courts before creating their own similar legislation.

As reported by the San Diego Union-Tribune on January 14, 2016, Uber independent contractors in San Diego plan to protest recent Uber fare discounts, which will lead to more driving miles for the same amount of wages. Some drivers fear that Lyft and Uber are lowering their rates to compete with each other in U.S. markets.

 

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