Chamber of Commerce v. City of Seattle

Case Updates

Through its litigation, the U.S. Chamber blocked implementation of this ordinance for more than four years (it has never been implemented). As a result of the U.S. Chamber’s antitrust claims, in 2019 the City also was forced to remove driver pay as a subject for permissible collective bargaining. The City of Seattle has now enacted a new ordinance, which does not alter the status of drivers but which seeks to develop a different regulatory scheme regarding driver pay. Because the City no longer plans to move forward with its old unionization ordinance and instead plans to implement this new ordinance, there is no longer a need to continue this litigation. Accordingly, the U.S. Chamber and its co-plaintiff have voluntarily dismissed the remaining claims, but without prejudice to reviving the suit in the future if the City ever did reanimate its effort to unionize independent contractors.

The U.S. Chamber’s opposition, which is embedded as part of the letter-briefing format used in the Western District of Washington for discovery issues, argues that it does not have “possession, custody, or control” of its members’ documents and, therefore, has no obligation (or ability) produce them under Federal Rule of Civil Procedure 26.

Click here to view the order.

Click here to view the Chamber’s response in opposition. The U.S. Chamber and its co-plaintiff, Rasier, LLC, previously moved for summary judgment against the City of Seattle’s ordinance permitting the unionization of independent contractors.

Click here to see the Chamber’s motion for summary judgment. The case is on remand from the U.S. Court of Appeals for the Ninth Circuit, which ruled in favor of the Chamber in rejecting the City’s antitrust immunity arguments. In its motion, the Chamber argues the City’s ordinance is preempted by federal antitrust law.

The court granted the City of Seattle's motion to dismiss and dismissed the claims in this matter.

Click here to view the notice of the City of Seattle's appeal of preliminary injunction to the Ninth Circuit.

Click here to view the order granting the Chamber's motion for preliminary injunctive relief.

The U.S. Chamber of Commerce renewed litigation in the U.S. District Court for the Western District of Washington to challenge a Seattle ordinance that authorizes union organizing of for-hire drivers working as independent contractors, highlighting that the ordinance will burden innovation, increase prices, and reduce quality and services for consumers.

The Chamber’s complaint notes that in addition to being in violation of federal law, implementation of the ordinance would result in a balkanized set of labor schemes that would negatively impact the sharing economy and jeopardize the flexible work schedules and earnings opportunities that economy provides to millions of people nationwide.

The lawsuit argues:

“Seattle’s unprecedented attempt to permit independent contractors to organize a union is clearly inconsistent with federal antitrust and labor laws. If adopted more broadly, Seattle’s approach would lead to a morass of inconsistent state and local regulations that would stifle innovation and undermine economic growth.”

“[T]he City’s one-of-a-kind ordinance authorizes drivers to unionize and collude through collective bargaining over the price terms of their contracts with driver coordinators. The Ordinance turns labor law on its head, treating independent businesses as employees, and flouts antitrust law, allowing independent economic actors to fix prices. As such, the Ordinance is preempted by both the Sherman Act and the National Labor Relations Act.”

“This is horizontal price-fixing—a classic per se antitrust violation. The Supreme Court has repeatedly affirmed that the antitrust laws prohibit independent contractors from forming or joining unions to collectively bargain, and the Federal Trade Commission has consistently maintained that state and local enactments authorizing collective bargaining by independent contractors violate the antitrust laws.”

"If the City implements and enforces the Ordinance, other local governments may also seek to regulate collective bargaining for for-hire drivers. Subjecting independent-contractor relationships to thousands of different bargaining schemes is contrary to congressional intent in enacting the NLRA to leave these relationships unregulated.”

“[T]he sheer novelty of the City’s attempt to regulate independent contractors should raise red flags. Plaintiff is unaware of any other state or local law authorizing independent contractors to collectively bargain; the City’s theory is unprecedented. Given the many decades of union efforts to organize various types of workplaces, including multiple efforts to claim that individuals working as independent contractors are actually employees, it is implausible that unions have inexplicably ignored for decades a prime opportunity to expand their membership.”

Timothy J. O'Connell of Stoel Rives LLP and Michael A. Carvin, Jacqueline M. Holmes, Christian G. Vergonis, and Robert Stander of Jones Day served as co-counsel for the U.S. Chamber of Commerce in this case on behalf of the U.S. Chamber Litigation Center.