All across the nation we’ve had problems with municipalities mucking-up labor and employment law with new and burdensome regulations—heaped on top of existing state and federal regimes. But Seattle may finally have gone too far in seeking to require Uber drivers to join a labor union. As NFIB Small Business Legal Center recently argued, in an amicus brief to the Ninth Circuit Federal Court of Appeals, Seattle’s Uber Ordinance is illegal on several counts.
First, the National Labor Relations Act (NLRA) flatly forbids government (or private actors) from conditioning the award of a contract, or the right to run a business, on a requirement to be unionized. (Such a requirement is lawful in the employment context, only in Non-Right to Work states). More fundamentally, the NLRA expressly excludes both managers and independent contractors from the protections it bestows upon “employees” to engage in concerted action. As we argued in our amicus brief, the NLRA allows the right to concerted action for true employees; however, Congress intentionally withheld the right to utilize this “economic weapon” for non-employees. And that only makes sense because independent contractors are in business for themselves.
Moreover, Seattle’s Uber Ordinance violates federal antitrust law. To be sure, antitrust law prohibits price-fixing, which is precisely what the Uber Ordinance purports to authorize in allowing Uber drivers to unionize and to engage in collective bargaining. Indeed, if unionized and bargaining for higher rates, Uber drivers would effectively establish a cartel, which would operate in conflict with federal policy of free competition. And while antitrust law allows States to authorize anti-competitive conduct in some cases, the Supreme Court is very clear in holding that municipalities enjoy no such prerogative. Simply put, Seattle’s Uber Ordinance is illegal through and through.
For a related topic, check-out our previous commentary on federal anti-trust law. Specifically, we’ve argued that state actors can be sued under antitrust for competing with private businesses—at least when acting in an anti-competitive manner.