The battle over organizing workers in the on-demand economy continues to heat up. Yesterday, a federal court in Washington dismissed a lawsuit filed by the U.S. Chamber of Commerce and others challenging the City of Seattle’s landmark ordinance that essentially authorizes ride-hailing drivers to unionize. However, the law remains on hold as an injunction remains in place pending the outcome of related litigation.
Not two weeks ago, we discussed several active court cases seeking to challenge the City of Seattle’s first-of-its-kind ordinance aimed at unionizing ride-sharing drivers, pointing out that the battle was about to reach a critical point. We’re happy to report that a federal court struck a blow against the ordinance yesterday and blocked it from proceeding for the time being. While this is just the first step in what is sure to be a long and complex fight, and it is only temporary in nature, it is incredibly positive news and a step in the right direction.
If the City of Seattle has its way, your next ride-sharing driver could be part of a first-of-its-kind union. And if on-demand economy companies have their way, the courts will block any such unionization efforts before they end up altering the way these companies currently operate. Although this battle has been brewing for over a year, we’re reaching a critical point in the fight, and we might now the direction this situation will take sooner rather than later.
In an effort to head off litigation by workers claiming they have been misclassified as contractors, companies using a largely on-demand workforce have been working with the New York State Assembly to develop a system of portable benefits to provide occasional workers with some level of benefits that would be available to them despite not being attached to a particular employer.
The first shot was fired by the City of Seattle last year when it passed an ordinance intended to assist with the unionization of ride-sharing drivers. The ordinance was groundbreaking in that it is the first of its kind in the country. The ordinance was also seen as controversial because it remains to be seen whether such a regulation could comply with national labor laws. The U.S. Chamber of Commerce tried to join the fight by filing a lawsuit against the City, claiming the ordinance violated antitrust and labor laws. But a federal judge dismissed that lawsuit by concluding that the Chamber didn’t have standing to pursue the claims, and even if it did, that no damage had yet been done and so the lawsuit was premature.
The Chicago regional office of the National Labor Relations Board (NLRB) has filed a complaint for unfair labor practices against Postmates, an on-demand delivery service that, according to its website, “connects customers with local couriers who can deliver anything from any store or restaurant in minutes.” The NLRB alleges that Postmates violated the National Labor Relations Act (NLRA) by prohibiting delivery workers from discussing the terms and conditions of their supposed “employment,” and by requiring the workers enter into arbitration agreements.
In its early years, the gig economy, led by ridesharing platforms Uber and Lyft, was touted as the new land of rugged individualism.
In a 2015 survey of Uber drivers in 20 cities across the United States, nine out of 10 Uber drivers reported that “being their own boss” was the primary reason they drive for the company. This new economic model upended the traditional notion that people want to have a permanent job for the financial security. Additionally, it replaced the idea of working one’s way up the corporate ladder with using new internet-based technologies to provide services on your own schedule, with your own equipment.
Yesterday, a federal court judge in Seattle gave a boost to those who want to unionize the gig economy. The August 9 ruling could end up having widespread implications, although unionization efforts for gig workers still have numerous hurdles to overcome before they become law.
The paradigm shift in labor and employment laws forced by the gig economy continues to develop as quickly as our technology. With the monumental decline in union organization over the past few decades, national unions recognize the potential for increasing membership by exploring how to unionize these new age workspaces.