Employment Law Daily Challenge to Seattle ordinance establishing collective bargaining for Uber/Lyft drivers properly dismissed as unripe
Monday, August 13, 2018

Challenge to Seattle ordinance establishing collective bargaining for Uber/Lyft drivers properly dismissed as unripe

By Ronald Miller, J.D.

A lawsuit challenging a Seattle ordinance that established a collective bargaining process covering for-hire drivers who contract with rideshare companies such as Uber and Lyft was properly dismissed as unripe, ruled the Ninth Circuit. The drivers had not satisfied any of the requirements for establishing an injury in fact, the appeals court concluded. First, they failed to show how the disclosure of personal information presented a “risk of real harm” since all for-hire drivers must obtain business licenses and disclose much of the same information in a public and searchable municipal database. It was speculative whether a union would become the “exclusive driver representative” for Uber and Lyft’s drivers, and any violation of NLRA Section 8(e) requires a “contract or agreement.” Further, any argument that the union would engage in conduct that is “sufficiently intimidating,” in violation of Section 8(b)(4), was wholly speculative. Accordingly, the judgment of the district court was affirmed (Clark v. City of Seattle, August 9, 2018, Smith, M., Jr.).

City ordinance. In December 2015, the Seattle City Council passed an ordinance that established a multistep collective bargaining process between “driver coordinators,” such as Uber and Lyft, and for-hire drivers who contract with those companies. The process begins with the election of a “qualified driver representative” (QDR). A representative that makes it through the process can be certified as the “exclusive driver representative” (EDR). To be a qualifying driver, a for-hire driver must have driven at least 52 trips originating or ending within the Seattle city limits for a particular coordinator during any three-month period in the 12 months preceding the commencement date.

The ordinance took effect on January 22, 2016. On March 3, 2017, the director of the Seattle Department of Finance and Administrative Services designated Teamsters Local 117 as a QDR. On March 7, the union notified Uber, Lyft and other driver coordinators that it intended to seek EDR certification for those companies. It requested contact information of qualifying drivers from the driver coordinators.

Challenge to ordinance. Drivers who contracted with Uber and Lyft filed suit against the city challenging the ordinance on federal law grounds. They objected to the prospect of representation by the Teamsters. The city moved to dismiss the drivers’ complaint, and the district court dismissed the drivers’ action as unripe without reaching the merits of their claims. On appeal, the drivers contend that the Seattle ordinance is preempted by Sections 8(b)(4) and 8(e) of the NLRA and violates the drivers’ First Amendment rights.

Ripeness. Ripeness is one of the justiciability doctrines that courts use to determine whether a suit presents a live case or controversy. Citing Ninth Circuit precedent, the appeals court noted that ripeness is “peculiarly a question of timing” designed to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements. In conducting a traditional ripeness inquiry, the court evaluates both a “constitutional and a prudential component.” For a case to be ripe, it must present issues that are “definite and concrete, not hypothetical or abstract.”

Injury in fact. The Ninth Circuit first considered the requirements for an injury in fact, noting that a plaintiff must have suffered “an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual and imminent, not ‘conjectural’ or ‘hypothetical.’” The appeals court concluded that the drivers had not satisfied any of the requirements for an injury in fact. It rejected each of the three reasons offered by the drivers for why their NLRA preemption claims were constitutionally ripe.

Privacy. First, the drivers argued that the ordinance would infringe on their privacy rights because their personal information would be disclosed to the union under the ordinance’s disclosure provisions. Even assuming that the disclosure was imminent, the disclosure of the drivers’ personal information was neither a concrete nor a particularized injury. The drivers failed to show how the disclosure of the information presents a “risk of real harm” to each driver “personally and individually.” In order to operate in Seattle, all for-hire drivers must obtain business licenses and disclose much of the same information in a public and searchable municipal database online. Moreover, “a bare procedural violation, divorced from any concrete harm,” did not “satisfy the injury-in-fact requirement of Article III.”

Section 8(e) violation. Next, the drivers argued that “certification of an exclusive driver representative would result in a contract governing the manner in which they can do business with Uber and/or Lyft.” In other words, the drivers asserted that they were poised to suffer a violation of Section 8(e). By its plain language, Section 8(e) requires a “contract or agreement,” and here, no contract or agreement was imminent, and no QDR had successfully procured support of the majority of either Uber or Lyft’s qualifying drivers. Thus, it was speculative whether Local 117, another entity, or no entity at all would become the EDR for Uber and Lyft’s drivers. Consequently, the appeals court concluded that such an injury was neither actual nor imminent.

Certification process. Third, the drivers argued that the ordinance’s certification process would violate their rights under Section 8(b)(4) not to be subject to union campaigns prohibited by that statute. However, the plain language of the statute makes clear that not just any conduct will trigger Section 8(b)(4)’s proscription. The conduct must be “threatening, coercive, or restraining.” In this case, the drivers anticipate that they will be subject to a “coercive campaign” by the union. However, they did not provide any facts about the foreseen campaign. Whether the union will engage in conduct that is “sufficiently intimidating” is wholly speculative. Because the drivers have not satisfied the constitutional component of ripeness, their challenge to the ordinance based on NLRA preemption was unripe.

First Amendment claim. The drivers’ First Amendment claim was unripe for the same reasons. The drivers asserted that the ordinance violated their First Amendment rights because it called for transferring their speech rights to an unwanted representative. However, their actual injuries hinged on a prospective chain of events that have not yet occurred, and may never occur, the court pointed out. First, the union must be elected EDR for Uber or Lyft. It must then participate in collective bargaining. Because no entity has achieved EDR certification, much less impinged on the drivers’ freedom of speech at the negotiating table, the drivers’ First Amendment claim is also unripe. Therefore, the appeals court affirmed the district court’s judgment dismissing the action.

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