Claiming the law could "burden innovation, increase prices, and reduce quality and services for consumers," the U.S. Chamber of Commerce is suing Seattle over its landmark law allowing app-based drivers to unionize. The suit claims the city law violates federal labor laws and will hurt "the sharing economy."
"Technology companies are leading the charge when it comes to empowering people with the flexibility and choice that comes with being your own boss, and that is something to be championed, not stifled," Amanda Eversole, president of the Chamber’s Center for Advanced Technology & Innovation, said in a statement.
The question of whether services like Uber really "empower" their drivers is, of course, up for debate. Drivers on these platforms are subject to sudden changes in pay and can be kicked of the platforms with little advance notice. Because they are considered "independent contractors" instead of employees, drivers have no rights under federal law to organize and bargain with the companies that act as their bosses.
The Chamber's suit, which you can read in full here, was filed today in District Court and names the city, its Department of Finance and Administrative Services, and that department's director, Fred Podesta. Kimberly Mills, a spokesperson for City Attorney Pete Holmes, said the City Attorney's Office will "definitely" defend the city's ordinance, but had no other comment to offer.
"Our response will come in the answer filed with the court," Mills said in an email.
In a statement, Mayor Ed Murray doubled down on his noncommittal stance from when the law passed and he refused to either sign or veto it:
As I said when the legislation was passed last year, I strongly support the right of workers to organize to ensure a fair and just workplace.
I stated at the time—and still believe—that the administration would likely need to seek clarifying legislation from the Council before full implementation of this law. Today’s lawsuit will now inject a level of uncertainty for the City on how best to proceed with any future legislation and implementation.
Neither Lyft nor Uber are named as parties to the suit. A Lyft spokesperson said the company continues to "share concerns" about the law.
An Uber spokesperson said in an emailed statement: “The Chamber of Commerce’s challenge to the Seattle ordinance raises serious questions not only about whether the city has run afoul of federal laws, but also about the impact on drivers who rely on ridesharing to earn flexible income.” (Meanwhile, the company has been calling drivers trying to discourage them from unionizing.)
This lawsuit is a big deal that will cost the city money and time and—if the U.S. Chamber loses—could set a precedent that has ripple effects across the modern tech economy. But it's not a surprise. Seattle was the first city ever to pass a law allowing app-based drivers to unionize and it's a massive disruption to the so-called gig economy. A lawsuit was all but guaranteed. When the Seattle City Council approved the law, council members openly acknowledged the possibility of the city getting sued.
"My attitude about [a legal challenge] is that this is the work we’ve chosen to do," Council Member Bruce Harrell said ahead of the vote. "None of this kind of work is easy."
UPDATE: In a statement, Teamsters Local 117, which supported the legislation, called the lawsuit a “cynical ploy to deprive workers of a fundamental human right."
Uber driver Peter Kuel said in that statement, “The drivers decided to have a union, so nothing is going to stop the union. The union will stay. We’re not going to stop organizing."