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Uber Technologies Inc. has filed a lawsuit against the city of Seattle, alleging that the city's new App-Based Worker Deactivation Rights Ordinance, which is set to take effect on January 1, 2025, poses serious constitutional issues. Uber claims the ordinance compels the company to express views inconsistent with its approach to privacy and safety, violating fundamental constitutional protections.

In a complaint filed in the U.S. District Court for the Western District of Washington on Wednesday, Uber argued that the ordinance forces the company to adopt the city's perspective, even when that perspective could damage Uber’s reputation and operations. The company asserts that by enforcing the ordinance, Seattle would require Uber to publicly align with the city’s policies, which might suggest to the public that Uber is not fully committed to providing high-quality services, privacy, or safety for its workers and customers.

Uber’s complaint describes the city’s actions as unconstitutional, alleging that the ordinance imposes a regime of compelled speech, forced association, and an indecipherable government mandate. The company also argues that the ordinance demands sweeping disclosures of sensitive business information and interferes with its contractual rights with workers and clients. According to Uber, Seattle’s attempts to regulate worker deactivations threaten to harm both its business operations and its relationships with app-based workers who do not meet the company’s standards.

The App-Based Worker Deactivation Rights Ordinance requires companies like Uber, which employ 250 or more app-based workers worldwide, to provide workers with a detailed explanation whenever they are deactivated from the platform. The ordinance mandates that companies not only disclose the reasons for deactivation but also provide evidence supporting that decision and allow workers to challenge it through an appeals process. The city of Seattle’s Office of Labor Standards (OLS) will have the authority to enforce the ordinance, though the agency will be limited to investigating whether companies provided the proper notices and followed the correct procedures until May 31, 2027.

The ordinance, which also includes a private right of action for workers, has caused significant concern for Uber. The company argues that the city's vague standards and unclear guidance put it in a difficult position, potentially forcing it to reinstate workers that it would have otherwise deactivated for legitimate reasons, such as safety or reliability concerns. Uber contends that the ordinance's provisions could harm its ability to maintain high service standards and keep customers safe.

“Seattle seeks to impose an unconstitutional regime of compelled speech, forced association, indecipherable government mandate, sweeping disclosure demand, and impairment of contract rights on companies like Uber,” the company wrote in its complaint. Uber further asserts that the city’s demands would significantly alter its ability to make decisions based on its own operational requirements and safety protocols, undermining its privacy policies and ability to protect sensitive business information.

At the heart of Uber's legal challenge is the requirement that the company disclose confidential business information and adopt a deactivation policy that aligns with Seattle’s approach, even if it goes against the company’s operational preferences. Uber believes that such a policy would undermine its reputation and undermine its focus on maintaining safety, quality, and privacy.

Uber’s complaint also highlights that while it shares Seattle's goal of keeping couriers active on platforms like Uber, it disagrees with the specific balance the city has chosen to strike. The company asserts that ensuring consumers receive reliable and safe deliveries is a higher priority than allowing couriers with consistently poor ratings to remain on the platform. Uber also contends that couriers should not be allowed to refuse delivery to certain neighborhoods based on the characteristics of the people or businesses there.

Moreover, Uber believes that protecting consumers from fraud and retaliation should take precedence over the requirement to provide deactivated workers with extensive documentation on the reasons for their removal, particularly when that information may be sensitive or confidential. The company argues that such demands could compromise its ability to safeguard consumers and prevent fraud.

Uber has raised concerns with the Seattle City Council and the city’s Office of Labor Standards about the ordinance since it was first introduced in August 2023. The company claims that the ordinance, as it stands, would lower its standards for safety, quality, and privacy. Despite these concerns, Uber asserts that it has received little guidance from the city regarding how the ordinance would be enforced and implemented, leaving the company uncertain about how to comply with the new regulations.

"Whatever objectives the City may have, it cannot pursue them in defiance of the First, Fourth, and Fourteenth Amendments and the Contracts Clause of the U.S. Constitution," Uber wrote in its complaint. Uber is seeking to have a section of the ordinance that applies to companies like Uber with 250 or more app-based workers blocked, specifically targeting how companies manage deactivation processes.

The Seattle Office of Labor Standards had previously announced that the ordinance would go into effect on January 1, 2025, but with limited enforcement authority until May 31, 2027. The city stated that during this time period, it would investigate specific issues such as whether companies provided a notice of rights, a deactivation policy, evidence supporting the deactivation, and a process for challenging the deactivation. However, the office will not have the authority to investigate whether a company deactivated a worker for a legitimate reason until June 1, 2027.

OLS Director Steven Marchese commented when the ordinance was announced that the law would give app-based workers the right to know why they were deactivated, what information the company used to make the decision, and the process for challenging the deactivation. While Uber supports the idea of transparency, the company asserts that the ordinance goes too far, requiring more disclosure than is necessary or reasonable.

Uber's delivery platform connects consumers with independent couriers who deliver meals, groceries, and other goods, and the company maintains that it has every incentive to keep couriers on the platform. However, Uber argues that the ordinance forces the company to adopt a model that may not align with its operational and safety standards. In particular, Uber has expressed concerns about the possibility of keeping workers who do not meet the company’s standards for quality, safety, and reliability, as well as the impact on the company’s privacy policies and protection of sensitive business information.

Uber has been critical of the city’s approach, arguing that Seattle’s handling of the ordinance has been sluggish, offering little guidance and clarity as the implementation date approaches. As the new year approaches, Uber continues to express frustration with the city's lack of answers regarding how the ordinance will affect its operations.

A representative from the city of Seattle did not immediately respond to a request for comment regarding Uber’s lawsuit. The case is currently being represented by Uber’s legal team, which includes Robert J. Maguire and Theo A. Lesczynski of Davis Wright Tremaine LLP, and Stacey Grigsby, David Zionts, Neha Jaganathan, Alexander Cave, and Neema Sahni of Covington & Burling LLP. Seattle is being represented by Jessica L. Goldman of Summit Law Group.

The case is being heard under the title Uber Technologies Inc. et al. v. City of Seattle, case number 2:24-cv-02103, in the U.S. District Court for the Western District of Washington.