In case you have not noticed there is a war of sorts going on over the definition of independent contractors, in particular the case of Uber and Lyft. There are many combatants in this battle. This most recent clash was instigated by the U.S. Chamber of Commerce.
Who is involved?
On one side we have the government, represented by the several agencies of the Federal government; state governments, in particular California, Washington and New York; and local municipalities, in particular Seattle, Washington. One party supporting this side is unions, who would love to have independent contractors be declared employees in order to try to organize them. On the other side, we have businesses who do not want employees, they want independent contractors. Supporting them now is the U.S. Chamber of Commerce. Somewhere in between are the workers, some of whom want the independence and others who want jobs.
Most recent action
About a year ago the city of Seattle passed local legislation basically declaring Uber and Lyft drivers as employees and granting them the right to join a union and bargain over wages. On Thursday, March 3rd, the U.S. Chamber of Commerce filed a lawsuit against Seattle saying the local legislation is taking the power out of federal legislation, in this case the National Labor Relations Act. The Chamber basically says that Seattle does not have the right to supersede federal labor law which defines who is eligible to bargain collectively. The Chamber’s lawsuit said “Seattle and thousands of other municipalities would be free to adopt their own disparate regulatory regimes, which would … inhibit the free flow of commerce among private service providers around the Nation..” The Chamber is seeking to have the law suspended.
Basically Seattle ruled on the status of independent contractors before the National Labor Relations Board, which controls compliance with the National Labor Relations Act, could rule. The Chamber argues this could put Seattle in violation of federal law. California has already had a case that declared drivers to be employees, but that is under state law. Seattle doesn’t have the ability to supersede federal law the way a state does.
What will happen?
At this time it is anybody’s guess. The city of Seattle has a war chest of millions of dollars and is prepared to fight the lawsuit. The U.S. Chamber in turn has thousands of members who could be adversely affected by allowing the city law to stand. So we will just have to wait and see.