Uber Eats
SEATTLE - Seattle’s unique law requiring app-based delivery companies like Uber and Instacart to create and publish policies identifying when drivers can be deactivated has survived a First Amendment challenge.
The U.S. Court of Appeals for the Ninth Circuit last week, in an opinion drawing a partial dissent, approved Seattle Ordinance 126878, which was passed in 2023 and went into effect on Jan. 1, 2025.
According to a statement from Uber, it is the first and only law prohibiting “deactivations based solely on customer ratings,” and since its inception has negatively impacted Uber’s business in several ways, namely by allowing problematic couriers to stay on the platform longer, negatively impacting thousands of orders and reducing accountability in service quality.
Notably, the Ordinance does not regulate ride-share services, though Uber’s food-delivery business falls under the Ordinance’s coverage.
In addition to prohibiting deactivations for certain reasons, the Ordinance also requires a network company to provide app-based workers with a written deactivation policy and that the deactivation policy be “reasonably related” to the company’s “safe and efficient operations.”
Uber and Instacart sued for a temporary restraining order and preliminary injunction to enjoin enforcement of the Ordinance, claiming that the deactivation policy requirements compel speech in violation of the First Amendment and are void for vagueness under the 14th Amendment.
The network companies argued that the deactivation policy requirement “compels speech by forcing the companies to communicate their deactivation policies and decisions in writing and make them accessible to workers” and that “the deactivation standards regulate that speech’s content by requiring that the companies’ policies be… ‘reasonably related’ to ‘safe and efficient operations.’”
Writing for the majority, Judge Richard Clifton, a George W. Bush-appointee, found the ordinance passes First Amendment muster and focused on whether the requirements regarding deactivation policies involved sufficiently expressive conduct to subject the Ordinance to First Amendment scrutiny.
It found the regulation of the terms of agreements between network companies and app-based workers does not meet this threshold. “A business agreement between two parties is not conduct with a significant expressive element,” Judge Clifton wrote.
The central purpose of the Ordinance is to “keep app-based workers informed and employed while keeping the public safe,” the majority reasoned, and not to restrict speech.
In the majority’s view, any regulation of speech by the Ordinance is incidental to the legitimate regulation of business conduct, much like any “well-established” anti-discrimination law would require the removal of job postings saying “White Applicants Only.”
The majority also found that, even if speech is involved, the Ordinance regulates commercial speech, which is entitled to less First Amendment protection and is a hurdle easily cleared by the Ordinance.
The majority was likewise unpersuaded by the plaintiffs’ argument that the Ordinance’s requirements concerning deactivation policies are void for vagueness under the 14th Amendment.
Requiring deactivation policies to be “reasonably related” to the company’s “safe and efficient operations” is sufficiently clear in the context of the Ordinance to allow “a person of ordinary intelligence” to understand what is or is not prohibited in a deactivation policy, Judge Clifton argued.
The examples of reasons for deactivation prohibited by the Ordinance – such as failing background checks that do not reveal “egregious misconduct” or poor driving records revealing only one or two moving violations or at-fault collisions – provide clarity and notice as to acceptable and unacceptable grounds for deactivation, according to the majority.
Judge Mark Bennett, a Donald Trump-appointee, dissented from the majority’s conclusions on the First Amendment issues, arguing that the Ordinance compels speech by network companies.
In Judge Bennett’s view, the “drafting and publication of such a [deactivation] policy is speech” that triggers First Amendment scrutiny and “it is far from clear that Seattle is likely to prevail on the merits. At the very least… plaintiffs have raised serious questions going to the merits.”
Uber is no stranger to fights with the City of Seattle over regulation of its app-based business. In 2015, the City passed an ordinance to allow ride-share drivers to unionize. After being temporarily enjoined by the Ninth Circuit, the City agreed to dismiss the case and focus instead on regulating minimum wages for ride-share drivers.