The FINANCIAL — The U.S. Chamber of Commerce on January 5 announced its strong opposition to a Seattle ordinance that authorizes union organizing of for-hire drivers working as independent contractors, highlighting that the ordinance violates federal law in at least two ways and that the ordinance will burden innovation, increase prices, and reduce quality and services for consumers.
The Teamsters-backed ordinance would require taxi, for-hire vehicle, and transportation network companies to collectively bargain with independent drivers, and would impose contract terms on drivers and companies that did not reach an agreement through a designated union for drivers, according to the U.S. Chamber of Commerce.
On its face, Seattle’s ordinance conflicts with federal labor and antitrust laws.
“In amendments to the National Labor Relations Act, Congress expressly excluded independent contractors from collective-bargaining requirements. The City of Seattle—and any state or other municipal government—cannot dictate otherwise,” said Lily Fu Claffee, chief legal officer of the U.S. Chamber. “In addition, it’s antitrust 101 that independent actors cannot conspire with each other to set prices.”
In situations like this one where state or local legislation is barred by federal law, the Chamber has pursued litigation in cases such as Chamber of Commerce v. Brown (2008). “We are disappointed that the City Council has chosen to take Seattle down this unfortunate and expensive path,” Claffee continued. “Although litigation is always a last resort, the U.S. Chamber will not hesitate to engage the courts to enforce the law when lawmakers are dead set on stifling free enterprise and trampling the legal rights of the business community. Jurisdictions contemplating similar legislation should remember that enacting an unlawful ordinance like Seattle’s inevitably imposes significant litigation costs, thus wasting finite taxpayer resources.”
“It’s unfortunate that a city known for driving innovation has chosen not to protect the jobs and tax revenue created by a thriving technology sector, but rather has chosen to stifle innovation and limit consumers’ choices,” said Amanda Eversole, president of the U.S. Chamber’s Center for Advanced Technology and Innovation. “Technology companies are leading the charge when it comes to empowering people with the flexibility and choice that comes with being your own boss, but this ordinance sends the message that Seattle is closed for business.” Moreover, legislation like Seattle’s is “an albatross for consumers, who will suffer higher prices and reduced quality of service as a result of reduced flexibility that will inevitably result from implementation of Seattle’s ordinance.”