Uber loses.
Uber loses. Spencer Platt / Getty

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A federal judge has dismissed a lawsuit from the U.S. Chamber of Commerce that challenged Seattle's landmark law allowing ride share drivers to unionize, a victory for labor advocates fighting for collective bargaining rights in the sharing economy.

Seattle's Uber unionization law, passed by City Council in 2015, gave ride-share drivers collective bargaining rights. Since then, the policy has been mired in city rule-making and legal challenges. Meanwhile, Uber has been waging a campaign to convince its drivers they don't need a union.

The Chamber's case, one of several, argued the ordinance violated federal labor and antitrust laws. In April, the Chamber won an injunction temporarily halting implementation of the law. The group had argued that a requirement to share drivers' contact information with unions would "wreak irreparable harm that threatens the very existence" of such companies in Seattle. would immediately harm companies like Uber and Lyft.

In an order issued today, U.S. District Court Judge Robert Lasnik rejected the Chamber's arguments.

The National Labor Relations Act, which gives workers the right to form and join unions, does not cover government employees, agricultural workers, and independent contractors (like ride-share drivers). The Chamber argued that by leaving independent contractors out of that law, Congress intended for them to go unregulated. Yet, some states have extended bargaining rights to agricultural workers and Seattle's law attempts to do the same for ride-share drivers. Lasnik ruled that nothing in the NLRA suggests that Congress intentionally left out independent contractors in order to stop them from unionizing.

Don't expect union drives among Uber and Lyft drivers to start right away, though. There's still an injunction stemming from another another challenge to the law, brought by the Freedom Foundation The city has asked the judge to dismiss that case as well.

Charlotte Garden, a labor law professor at Seattle University, says she expects the city to win that case, too. "In my view, this was the more substantial challenge," Garden said of the Chamber's case.

"I think other states and cities are probably watching this case closely... waiting to see if this is a permissible way of regulating ride-share drivers," Garden said. "It’s possible this decision would prompt [other cities and states] to begin considering whether they want to go down the same road."

In a statement, Uber General Manager for the Pacific Northwest Brooke Steger said the decision "ignores the serious legal challenges raised in this case about an ordinance that will turn back the clock in Seattle." Now, Uber plans to appeal the decision to the 9th Circuit.

At the higher court, things could go either way, according to Garden. "The ordinance isn’t out of the woods yet," she said, "but this strikes me as a well-reasoned decision that keeps things on track."