Employment Law Daily Seattle ordinance permitting bargaining by drivers-for-hire survives preemption challenge
Tuesday, August 29, 2017

Seattle ordinance permitting bargaining by drivers-for-hire survives preemption challenge

By Pamela Wolf, J.D.

On August 24, a federal district court in Washington put an end to arguments that Seattle Ordinance 124968, which provides a mechanism through which for-hire drivers in Seattle—only those who are independent contractors, though—can collectively bargain with the companies that hire, contract with, and/or partner with them, is preempted by the National Labor Relations Act, violates First Amendment rights of speech and association, and is preempted by the Drivers’ Privacy Protection Act (DPPA). Accordingly, the court dismissed the complaint and dissolved the temporary injunction against implementation of the ordinance previously entered in April in a companion case, Chamber of Commerce of the United States of American v. City of Seattle (Clark v. City of Seattle, August 24, 2017, Lasnik, R.).

Driver representation. The first of its kind in the nation, the ordinance is aimed at granting collective bargaining rights to rideshare drivers. Under the ordinance a union may request recognition as a “qualified driver representative” (QDR) to negotiate terms and conditions of employment with “driver coordinators”—for-hire companies such as Uber, and taxi companies. If recognition is granted, the QDR may contact the company whose drivers it wants to represent for contact information of qualifying drivers so it can solicit their interest in being represented by the union. If a majority of drivers express interest, the city will certify the QDR as the exclusive driver representative for all drivers associated with that driver coordinator. The driver coordinator must then negotiate with the union over vehicle equipment standards, safe driving practices, the nature and amount of payments to drivers, and other matters.

In this case, Teamsters Local 117 notified three driver coordinators that it would like to be the sole and exclusive representative of their drivers in collective bargaining. The plaintiffs, drivers who provide transportation services to individuals in Seattle and who do business with one or more of the Teamster-targeted driver coordinators, filed a complaint asserting that the ordinance is preempted by the NLRA, violates their First Amendment free speech and association rights, and is preempted by the DPPA.

NLRA Sec. 8(e) challenge premature. The court first rejected the contention that the ordinance is preempted by NLRA Sections 8(e) and 8(b)(4) based on the assertion that the ordinance authorizes labor organizations to compel driver coordinators to stop doing business with independent drivers who do not want to be represented by the labor organization. As to Sec. 8(e), the issue was not yet ripe for determination because there were too many facts that needed to be developed before that provision’s preemptive effect could properly be addressed. Contrary to the plaintiffs’ repeated assertion, the ordinance does not require that the driver coordinator stop doing business with drivers unwilling to accept the union’s representation. Sec. 6.310.735.H.4 of the ordinance authorizes negotiation of a union shop provision, but it neither requires nor precludes such an arrangement, the court explained.

Moreover, the identified conflict between Sec. 8(e) and the ordinance would not emerge until questions of whether all of the following are resolved: the Teamsters will obtain statements of interest from a majority of qualified drivers working for any particular driver coordinator, the City will certify the Teamsters as the exclusive driver representative (EDR), the union will seek and/or obtain a union shop provision, the City would approve such a provision, and a named plaintiff would be impacted by such a provision. The court would not offer an advisory opinion or to declare rights in what amounts to a hypothetical case.

Nor could the plaintiffs make the required showing that “no set of circumstances exists under which the [Ordinance] would be valid” to sustain their facial challenge. A violation of Sec. 8(e) was not a foregone conclusion, and a number of contingent events, described above, must occur before even an arguable violation could arise. The ordinance does not require the EDR and the driver coordinator to enter into a union shop agreement, and EDR can be certified and a collective agreement negotiated that does not require the driver coordinator to stop doing business with non-member drivers. The ordinance thus can be validly enforced in those circumstances, and plaintiffs’ facial challenge, even if ripe, fails as a matter of law.

Finally, Sec. 8(e) prohibits certain activities on the part of labor organizations. In the context of plaintiff’s facial challenge, the ordinance does not require EDRs to be “labor organizations” as that term is defined in the NLRA. It’s possible that nonemployee drivers will choose as their representative an entity involved only in representing nonemployees, which means there would be no colorable NLRA claim. Until the ordinance is applied in a way that potentially conflicts with the NLRA, the plaintiffs’ challenge was premature.

No Sec. 8(b)(4) conflict. The court also rejected the plaintiffs’ argument that the ordinance is preempted because it conflicts with Sec. 8(b)(4), which makes it an unfair labor practice for a labor organization to “threaten, coerce, or restrain any person engaged in commerce” with the objective of forcing a self-employed person to join the labor organization or forcing any person to stop doing business with any other person. This claim was not ripe for resolution because yet to be seen were the questions of whether the Teamsters will be designated as the representative of any group of for-hire drivers, if it will attempt to negotiate a union shop provision with the driver coordinator, and whether such efforts could reasonably be viewed as a threat, coercion, or restraint on the named plaintiffs. Nor had the plaintiffs shown that they are likely to establish that Sec. 8(b)(4) applies to an organization representing independent contractors.

First amendment claims. As to the plaintiffs’ First Amendment claims that the ordinance will compel them to be represented by an EDR and will limit their ability to negotiate contract terms with the driver coordinators, the issue was whether the obvious and intended effects of legislation authorizing exclusive collective bargaining would amount to a First Amendment violation. Here, the plaintiffs had not identified any provision of the ordinance that restrains their expressive activities, ties them to the EDR’s expressive activities, or prevents them from speaking to the driver coordinators. The ordinance neither promotes nor prohibits the dissemination of any particular idea or bargaining position. The plaintiffs made no attempt to show that the legislative authorization for exclusive collective negotiations, standing alone, amounts to impermissible government interference in the marketplace of ideas.

Nor will the certification of an EDR compel the plaintiffs to become members of the EDR, to financially support the EDR, prevent the plaintiffs from criticizing the EDR or the negotiated contract terms, or otherwise affiliate them with the EDR’s petitioning, speech, or policy positions. Selection of an EDR by majority vote as required under the ordinance would make unreasonable any assumption that all members of the bargaining unit support the representative, much less every one of its policy positions.

Moreover, to the extent plaintiffs’ First Amendment claim was based on a fear that they will be forced to pay fees to the union and/or to fund speech or political activities with which they disagree, their claim was not yet ripe for adjudication, the court held.

DPPA not implicated. The court similarly rejected the plaintiffs’ DPPA claim. The DPPA is fairly limited in scope, the court observed. Although state and local agencies throughout the country collect personal data when a permit, permission, or other benefit is sought, Congress chose to regulate the use and disclosure of personal information only when it was collected by the state departments of motor vehicles. Neither the ordinance nor the implementing regulations require driver coordinators to obtain information collected, generated, or held by the DMV. The implementing rules specifically require disclosure of licenses or numbers generated by King County and/or the City of Seattle, not the DMV. The plaintiffs’ allegations therefore do not rise to a plausible inference that the information that must be disclosed is “from a motor vehicle record” regulated by the DPPA.

The court accordingly dismissed all of the plaintiffs’ claims and dissolved the previously entered temporary injunction.

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