In late 2015 the Seattle city council passed an ordinance giving independent contractor for-hire drivers the right to collectively bargain certain working conditions through selected representatives. Recently, the Seattle City Council publicly stated that it was seeking guidance on how the National Labor Relations Board would implement the ordinance. As former NLRB General Counsel under both Democratic and Republican Administrations, I would like to weigh in.
The ordinance became law without benefit of the mayor’s signature because, he said, the ordinance imposes unknown costs and places significant rulemaking burdens on city staff. Further, the mayor said additional clarifying legislation would be needed from the council.
At the other end of the spectrum, a lawsuit filed in federal court claimed, among other things, that the ordinance is inconsistent with and preempted by the Sherman Antitrust Act and the National Labor Relations Act, relying on the supremacy clause of the U.S. constitution and several supreme court decisions. The suit was dismissed on procedural grounds, but the legal issues it raises have not gone away. There is little reason to believe they will not be pursued once the procedural hurdles have been overcome.
The concerns expressed by the mayor and the claims made in the federal court suit raise valid and important issues. But the ordinance is fundamentally flawed in at least one other respect: It fails to provide for certain basic protections afforded to workers covered by the National Labor Relations Act (NLRA).
Independent contractors like the drivers are not covered by the NLRA, and for good reason. Contractors are entrepreneurs who essentially set their own flexible working terms, unlike employees covered by the NLRA. But since the Seattle ordinance nevertheless extends collective bargaining to them, there is no reason to deny the drivers certain fundamental protections given to workers under the NLRA.
Under the ordinance the City must, by regulation, define who is a “qualified driver” eligible to participate in the selection of the drivers’ representative. If not carefully drafted, the city’s definition may deny many drivers a voice in the choice of whether to select a representative—or not. Unduly narrow restrictions on who is a “qualified driver” would be inconsistent with NLRB policies and practices.
Under the NLRA, a wide variety of employees—full time, part time, temporary, seasonal, on-call, intermittent—may participate in the choice on union representation. This gives most all employees an opportunity to have a voice in the choice. The city’s definition of who is a “qualified driver” should be based on a similar policy of inclusiveness. Unfortunately, nothing in the ordinance guarantees this.
However a qualified driver is defined, the ordinance also fails to provide the protection of a secret ballot election to determine whether a representative is desired. Instead, the organization seeking to become the representative need only obtain a “statement of interest” from a majority of the drivers, based only upon driver signatures on non-secret cards collected by the very entity seeking representative status.
For a number of reasons, this system—known as a “card check”—is not a reliable way to determine the drivers’ desire for representation. For example, many times signers of cards do not know that the cards may be used to obtain representation without an election. Workers often sign cards to avoid offending a fellow worker, or to avert union pressure, or because they think that signing the card will result in a secret ballot election. Intimidation may also play a part in whether an individual will sign a card.
Because of this, the National Labor Relations Board (NLRB) and the U.S. Supreme Court have long held that a secret ballot election is the preferred method to determine union representation. Under the NLRA, employers may insist upon a secret ballot election in which their employees may vote on union representation. But there is no secret ballot protection provided by the ordinance.
Finally, if and when a union is chosen, the ordinance imposes an extraordinarily short 90-day bargaining timeline for the parties to reach an agreement. This timeline alters the normal give and take bargaining process, and creates artificial pressure to hurriedly resolve complex bargaining issues without due consideration by both parties. This limits the opportunity for driver input and feedback as well. If no contract is reached within the 90 days, an arbitrator may impose a binding two year agreement involuntarily on the parties.
Under the NLRA, collective bargaining is recognized as a process in which the parties themselves work out the issues based on voluntary agreement and the free play of economic forces. The Board may not impose contract terms on the parties, and arbitral imposition of a contract is allowed only where the parties have specifically and voluntarily agreed to it. None of this is provided for in the ordinance.
Ultimately, the legality or workability of Seattle’s new ordinance may be decided on the basis of the local problems articulated by the mayor and the national issues raised in the federal court suit. But the city should not lose sight of the fact that apart from those vitally important concerns, the ordinance is also deficient because it denies key legal procedures and protections to the drivers whom it purports to be helping.
Ronald Meisburg is Special Counsel to the law firm of Hunton & Williams. He served as general counsel of the National Labor Relations Board under Presidents George W. Bush and Barack Obama.