Brief of Amicus Curiae Professor Samuel Estreicher in Support of Defendants-Appellees in Chamber of Commerce of United States v. City of Seattle, No. 17-35640 (9th Circuit)

Abstract

Companies like Uber and Lyft contend that, because drivers are independent contractors and not employees under the U.S.'s various labor and employment laws, any attempt to form unions or bargain collectively for higher wages violates antitrust laws. Until now, that assumption has been widely shared -- but it's based on a failure to understand why concerted activity by workers is protected against antitrust liability. Labor’s antitrust shield was established by the 1914 Clayton Act, in which Congress determined that “the labor of a human being is not an article in commerce.” Conventionally, only workers defined as “employees” are viewed as having the right to organize without violating antitrust laws. Individuals are considered employees only if their boss can control when and how they do their work – what is called the common law’s “right to control” test. Under this view, people who provide their products or services directly to the public are prohibited from banding together with peers to try to raise wages and improve working conditions. For all intents and purposes, these independent contractors are considered business owners. They can form associations to share information and lobby for their interests -- like the American Bar Association or the so-called Freelancers Union -- but cannot form an organization that insists on collective bargaining. Allowing to join together with competitors to fix prices or carve up markets, the argument goes, represents a combination against the welfare of consumers. A Seattle ordinance, passed in 2015, would protect drivers from being fired for engaging in joint action. Given the prevailing “right to control” test, Uber and Lyft drivers may not be protected by all employment laws. But at the very least, they are entitled to engage in collective action without risk of antitrust liability. This is because of the Clayton Act, which preceded by two decades the affirmative legislation of the 1930s. In 1941, the Supreme Court confirmed that the Clayton Act, coupled with a latter statute broadening the scope of a protected “labor dispute,” established the right of workers to organize in their own interests free of civil and criminal liability under the antitrust laws. The antitrust exemption applies to workers who sell only their services, without any significant capital investment. Individuals who are principally engaged in selling goods are not covered by the exemption. Neither are those whose services involve investments in an office space and equipment, hiring staff, and advertising themselves as a business. The only investment that Uber and Lyft drivers make to their businesses is to supply their own vehicles. These drivers are “laborers” or “workers” under the Clayton Act exemption from the antitrust laws. Seattle’s involvement in setting a framework for collective bargaining and protection from retaliation does not alter the availability of the exemption for the drivers in seeking to improve their collective situation.