After the city of Seattle, Washington, passed a law in 2015 giving rideshare drivers the right to unionize, the US Chamber of Commerce and an Uber subsidiary sued to block the law on antitrust grounds. The case attracted the attention of Samuel Estreicher, Dwight D. Opperman Professor of Public Law and director of the NYU Center for Labor and Employment Law, who appeared amicus curiae in a brief stating his views in 2017 when the case was before the US Court of Appeals for the Ninth Circuit. His brief, arguing against the antitrust challenge to the Seattle law, eventually led to a law review article, which Estreicher co-authored with Dr. Jack Samuel ’23 and which is slated for publication next year in the Wake Forest Law Review.
Labor unions’ exemption from antitrust laws is derived from the Clayton Act of 1914 and the Norris-LaGuardia Act of 1932. Before the Clayton Act’s passage, the Sherman Antitrust Act of 1890, largely ineffective at bringing down industrial monopolies, was used more successfully against unions. But the Clayton Act established that human labor was not “a commodity or article of commerce”; thus, unions were not monopolies or trusts. Later, the Norris-LaGuardia Act banned employment contracts barring workers from joining unions, and specified that employers could not prevent employees from becoming union members.
Estreicher has long been interested in the labor exemption to antitrust laws, going at least as far back as his representation of the Actors’ Equity Association in H.A. Artists & Associates v. Actors’ Equity Association (1981). In that case, the US Supreme Court agreed with Estreicher’s argument that Actors’ Equity was exempt from antitrust laws. In the Seattle case, on the other hand, the Ninth Circuit overturned the Seattle ordinance allowing for rideshare driver unionization, because, the court asserted, the law neither followed from clearly expressed state policy nor received active state supervision.
Estreicher’s reasoning in the amicus brief was based on a section of the Clayton Act that, he explains, granted labor statutory immunity from federal antitrust laws when read in tandem with the Norris-LaGuardia Act. A common argument is that workers classified as independent contractors rather than as traditional employees do not enjoy the same level of rights, including the right to organize. But Estreicher disagrees.
“It’s been my contention in that brief, which led to this later article, that classification by employers or even by state governments…[as to] whether they’re independent contractors or employees, applies to employment law—but it does not define the scope of the labor exemption to the antitrust laws,” Estreicher says. Thus, he argues, federal antitrust laws from a century ago already permit independent contractors, including gig workers, to unionize.
Estreicher’s brief in the Seattle case took on a new life when Jack Samuel, now a tax associate at Cleary Gottlieb Steen & Hamilton, enrolled in Estreicher’s Employment Discrimination and Employment Law course. Samuel had recently taken Regulating Work Beyond Employment Seminar, taught by Crystal Eastman Professor of Law Cynthia Estlund, which was focused on non-employee workers and their legal status within employment law. Estlund’s assigned reading included Estreicher’s brief in the Seattle case—which Samuel calls “sort of a cult classic for the fans of this niche intersection of labor and antitrust.” With Estreicher’s blessing, Samuel wrote a term paper that picked up where the amicus brief had left off, fleshing out the legal analysis and providing historical context. Eventually, the project evolved into a full-fledged, co-authored article.
In “Labor’s Antitrust Immunity for Independent-Contractor Workers,” Estreicher and Samuel argue that independent-contractor workers—workers who provide primarily their own labor without significant capital investment—have the right to unionize and engage in collective bargaining with companies that utilize their services free of antitrust damage suits and injunctions, irrespective of how they are classified by their employers. “Employer classification of these workers as ‘independent contractors,’ whether well-founded or not, is irrelevant to whether they are protected by labor’s longstanding antitrust exemption inquiry, as long as the workers in question provide only their personal services without significant, non-fungible (with personal uses) capital investment,” they write. Traditionally, workers have brought their own tools or drive their cars to work without being treated as businesses who cannot combine legally.
Estreicher and Samuel target the common assumption that workers who are not statutory employees (independent contractors who are considered employees of a company for payroll tax purposes) as defined by the National Labor Relations Act will violate antitrust laws if they engage in collective action. They point out that nothing in the language of “either the Clayton or Norris-LaGuardia Acts conditions the labor immunity from the antitrust laws on the labor group comprising solely common-law or statutory employees, and the Supreme Court has never held that all independent contractors are categorically excluded from the labor exemption’s protection.” Further, they assert, since gig workers are not categorized as statutory employees under federal labor law, they are not preempted from seeking protection at the state and local levels against termination for union involvement, as illustrated by the Seattle ordinance.
Samuel’s interest in the topic stemmed in part from his own background. His grandfather, Howard Samuel, was deputy undersecretary of labor in the Carter administration (and spoke in the 1980s at an NYU-Columbia conference, led by Estreicher, on the Japanese labor model), and later president of the AFL-CIO’s Industrial Union Department. Samuel’s father, William Samuel, served in the Clinton administration as associate deputy secretary of labor; he recently retired from his latest role as the AFL-CIO’s director of government affairs.
Estreicher underscores the idea that longstanding federal labor laws can be applied in novel ways to cutting-edge issues arising from new forms of employment. “We think this can have a revivifying effect on labor law,” he says, “because here we have a group of people that can engage in joint action to improve their welfare, and they’re not subject to the National Labor Relations Act’s preemption rules.” That means state and local governments could potentially pass laws protecting collective action by independent contractors without being preempted by federal labor laws.
Posted May 21, 2024