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Antitrust Challenge to Seattle Ride-Hail Union Law Continues (1)

Sept. 17, 2018, 10:58 AMUpdated: Sept. 17, 2018, 6:49 PM

Seattle couldn’t convince the full panel of the Ninth Circuit to reconsider its bid to throw out an antitrust challenge to a city ordinance that lets ride-hail drivers join unions.

The case will now proceed before Judge Robert Lasnik in the U.S. District Court for the Western District of Washington.

The U.S. Chamber of Commerce and an Uber Technologies subsidiary argued that allowing drivers to bargain collectively over their pay would be tantamount to colluding on prices. They won a ruling from a three-judge panel in May that revived their antitrust challenge to the city ordinance. But the three-judge panel did affirm dismissal of their claim that federal labor law should pre-empt Seattle’s local regulation.

Seattle sought review from the full appeals court in the hope it would dismiss the antitrust claim as well, but no Ninth Circuit judges voted in favor of review, according to a court order issued Sept. 14.

A Seattle representative said the city will defend against the antitrust claim.

“While the City is considering its options, all today’s ruling does is send the case back to the trial court to determine the merits of the Chamber’s antitrust claim and the City is prepared to explain why its groundbreaking ordinance does not offend the antitrust laws,” the representative told Bloomberg Law by email Sept. 14. “This ruling does nothing to disturb the Ninth Circuit’s determination that federal labor law does not stand in the way of the City’s efforts to allow for-hire drivers to bargain for better working conditions.”

The city ordinance, enacted in 2015, is the only state or local law that extends collective bargaining rights to ride-hail driver. It has never fully gone into effect because it’s been tied up in litigation.

An Uber representative welcomed the appeals court’s decision.

“The decision further validates the legal concerns already identified in May by a unanimous three-judge panel of the Ninth Circuit,” Nathan Hambley, Uber spokesperson in Seattle, said in a statement emailed to Bloomberg Law Sept. 17. “The Ninth Circuit outcome underscores the fundamental legal problems consistently raised about Seattle’s Collective Bargaining Ordinance since the City Council passed it in late 2015.”

A separate legal challenge to the ordinance ended over the summer, when the U.S. Court of Appeals for the Ninth Circuit in August upheld Lasnik’s dismissal of a separate case filed by drivers backed by National Right to Work Legal Defense Foundation Inc. and Freedom Foundation. That case also raised labor law concerns but unsuccessfully argued the ordinance would violate drivers’ First Amendment freedom of association right not to be forced to affiliate with a union.

Despite their legal setback in August, Right to Work welcomed the Sept. 14 denial of rehearing in the Chamber’s lawsuit.

“We are relieved that independent drivers who use ride-sharing apps are no longer under imminent threat of being forced into a union and compelled to pay union fees just to pick up passengers within Seattle city limits,” Mark Mix, president of National Right to Work Foundation, said in a statement emailed to Bloomberg Law.

A representative for the Chamber didn’t immediately respond to a request for comment.

The case is U.S. Chamber of Commerce v. City of Seattle, 9th Cir., No. 17-35640, en banc rehearing denied 9/14/18.

(Updated to include comments from Uber.)

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com

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