Uber and Lyft have seen a number of attacks
challenging the status of their independently contracted drivers in an effort
to force both companies to reclassify and/or treat their drivers
as employees. A recent example was a local ordinance enacted
in Seattle, Washington, allowing drivers working for ride-hailing
companies like Uber and Lyft the right to unionize. Specifically, the
ordinance, enacted in December 2015, would allow drivers working for the same
company to form a nonprofit organization that would collectively bargain for
them.
However, on March 3 the U.S. Chamber of Commerce filed suit in Washington federal court challenging the ordinance. In addition to various challenges under
state law, the complaint’s primary challenges under federal law rely upon the
Sherman Antitrust Act and the National Labor Relations Act.
The complaint
asserts that the ordinance violates and is preempted by the Sherman
Antitrust Act as it would allow the independently contracted drivers to form an
illegal cartel and engage in illegal horizontal fixing of prices. Federal labor
law also preempts the city ordinance, according to the complaint, because:
·
Congress expressly left independent contractors
unregulated and excluded from the NLRA’s collective-bargaining requirements; and
·
the NLRA preempts state resolution of issues committed
to the exclusive jurisdiction of the National Labor Relations Board.
The complaint specifically notes that the “NLRB has
not definitely resolved the employee status of drivers who receive ride requests
from software applications and, indeed, as to certain drivers, that issue is
currently pending before the NLRB.”
The lawsuit presumably references five different NLRB
cases where the Board, as part of its investigation of alleged unfair labor
practices by Uber, must determine whether Uber’s drivers are
employees or independent contractors. As part of its investigation of
those cases, the NLRB issued two subpoenas to Uber requiring the production
of sworn answers to 107 written interrogatories and 34 requests seeking
production of documents “regarding…the threshold issue of whether the drivers
at issue are employees under Section 2(3) of the Act.”
Uber has produced some documents responsive to the
subpoenas, but, according to the NLRB, Uber “has not provided the
majority of the documents and information requested in the Subpoenas. It
continues to maintain that the Board is not entitled to the answers and
documents it requested in its Subpoenas, and it has limited its scant
production of evidence to the two Charging parties that filed charges in Region
20.”
As a result, the NLRB filed a lawsuit in a California federal
court to enforce the subpoenas. While the federal court will not decide the
“threshold issue,” its decision will determine what information the NLRB has to
evaluate the independent contractor issue. If the NLRB ultimately determines
that Uber’s drivers should be classified as employees and not independent
contractors, it will issue a complaint and have a hearing before an
administrative law judge to decide that issue.
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