Introduction
As work shifts away from the traditional employer–employee relationship,
alternative forms of organizing are more important than ever. The COVID-19 pandemic has shown that workers rely on their employers to provide workplace safety measures,
job and income stability,
and health insurance benefits,
especially in times of crisis. Yet with more workers taking part in the gig economy,
these assurances are becoming harder to secure. Indeed, roughly half of gig workers feel that their gig platforms do not adequately provide unemployment, health care, and paid leave benefits.
More than a third of gig workers say they have been harassed or have felt unsafe at work.
With one in six Americans reporting that they have earned money from an online gig platform, these inadequacies affect a broad swath of the population but disproportionately impact young, Hispanic, and low-income workers.
One way that workers have historically remedied precarity in the workplace is through collective action.
Workers who coordinate their efforts and negotiate collectively with their shared employer are better positioned to determine the terms and conditions of their employment.
This option is not available to gig workers, however, who are typically classified as independent contractors rather than employees and are thus excluded from the striking and collective bargaining protections of the National Labor Relations Act (NLRA), which apply only to employees.
The law treats gig workers as independent businesspeople, so raising wages through collective bargaining is considered price-fixing, and striking a gig platform is considered a group boycott—both per se violations of section 1 of the Sherman Act.
Gig workers who do attempt to act collectively therefore are likely to face antitrust liability.
Workers have long been exempted from antitrust liability through statutory carveouts from the antitrust laws, collectively known as the “labor exemption,”
but courts have traditionally excluded independent contractors from this exemption.
The First Circuit in the recent case Confederación Hípica de Puerto Rico, Inc. v. Confederación de Jinetes Puertorriqueños, Inc. (Jinetes) made a step toward including gig workers in the exemption by holding that workers engaged in a labor dispute may benefit from the exemption regardless of their employment status.
Courts in the First Circuit may construe this holding either narrowly or broadly, and other courts may similarly choose to adopt narrow or broad interpretations of the reasoning—or ignore it altogether. The scope and breadth of this interpretation will largely determine the policy effects of Jinetes. If the case is interpreted narrowly, most gig workers would still be excluded from the antitrust labor exemption, and their organizing options would be accordingly limited.
If the case is interpreted broadly, not only would gig workers be able to strike and collectively bargain without inviting antitrust lawsuits, but states and municipalities would be able to enact affirmative protections granting these rights to gig workers.
These state and local laws could protect workers from being fired or disciplined for engaging in collective action and even establish sectoral bargaining frameworks to set industry-wide standards.
Part I of this Comment describes the contours of the labor exemption and explains how Jinetes builds on prior opinions. Part II explains how the reasoning in Jinetes, by eschewing the question of employment status altogether, opens the decision up to a narrow interpretation that in practice aligns with courts’ prior jurisprudence on the scope of the labor exemption. Part III argues instead, on policy grounds, for a broad inter-pretation of the Jinetes holding that expands the organizing terrain for gig workers.
I. The Antitrust Labor Exemption and the Jinetes Approach
The Sherman Antitrust Act of 1890 aims to promote competition by prohibiting monopolies and agreements that restrain trade.
While individual legislators had different perspectives, the legislators who passed the Sherman Act showed a broad-based concern for containing the domination of large corporations, democratically allocating economic coordination rights, and institutionalizing norms of fair competition.
This Comment assumes that the Sherman Act intended to remedy vast concentrations of economic power, a reading evidenced by congressional debate around the passage of the Act. For example, Senator James George of Mississippi, a key legislator in the formation of the Sherman Act, observed in 1889 that he hoped passage of the Act would “put an end forever to the practice, now becoming too common, of large corporations, and of single persons, too, of large wealth, so arranging that they dictate to the people of this country what they shall pay when they purchase, and what they shall receive when they sell.” 20 Cong. Rec. 1458 (1889) (statement of Sen. James George). Rather than being solely concerned with consumer welfare, as Professor Robert Bork suggested, Senator George was also concerned with concentrations of buying power. In Senator George’s case, this concern primarily contemplated the plight of farmers, but the same argument may apply to gig workers, who, in many cases, must contend with platforms that possess a labor monopsony. See, e.g., Arindrajit Dube, Jeff Jacobs, Suresh Naidu & Siddharth Suri, Monopsony in Online Labor Markets, 2 Am. Econ. Rev.: Insights 33, 34 (2020) (“[W]e find a highly robust and surprisingly high degree of market power even in this large and diverse online spot labor market.”).
But for decades after its passage, the Sherman Act was frequently used against workers with a stifling effect.
Gilded Age courts often issued labor injunc-tions to end union activity on the basis of, among other things, antitrust liability.
These courts viewed labor unions as groups of workers seeking to restrain competition in the labor market by fixing prices for their labor through standardized wages and refusing to deal with certain employers through strikes.
Governments’ ability to regulate employers was hamstrung too in the early twentieth-century Lochner era, as courts struck down state and local laws setting minimum labor standards, including wage and hour laws and even child labor laws, in the name of the freedom to contract.
Without the ability to act collectively without running afoul of antitrust laws, the situation for industrial workers was dire in the Lochner era.
Labor activists eventually won a statutory exemption from the antitrust laws through provisions of the 1914 Clayton Act and the 1932 Norris–LaGuardia Act (NLGA).
The Clayton Act attempted to expand upon the Sherman Act by, inter alia, including protections for labor organizing where the Sherman Act remained silent. Section 6 of the Clayton Act boldly begins, “The labor of a human being is not a commodity or article of commerce.”
The Clayton Act then prohibits federal courts from issuing injunctions in cases “involving, or growing out of, a dispute concerning terms or conditions of employment.”
Courts initially applied the Clayton Act’s exemption narrowly, prompting Congress to clarify its intent with the Norris–LaGuardia Act in 1932.
The NLGA specifies that federal courts cannot issue injunctions in “labor dispute[s]” and that federal courts cannot prevent people in labor disputes from joining a union, picketing, striking, or engaging in other enumerated acts.
Together, these provisions of the Clayton Act and the NLGA form the statutory labor exemption from the antitrust laws.
Within a decade, courts finally enforced the exemption by ruling for employees in antitrust suits brought by their employers.
But, as with other labor and employment laws,
courts have typically excluded independent contractors from the exemption.
Even though the Clayton Act and the NLGA are silent as to whether independent contractors may claim the labor exemption, courts’ treatment of independent contractors resembles the treatment of workers generally prior to the creation of a labor exemption. There is a strong argument to be made that gig workers should properly be classified as employees, and several states have sought to do so.
Nonetheless, platform apps such as Uber and food delivery services have insisted on classifying gig workers as independent contractors.
The first case examining the cumulative implications of the Clayton Act and the NLGA for independent contractors came a decade after the NLGA’s passage in the 1942 case Columbia River Packers Ass’n v. Hinton.
In a dispute between a fish processor and a group of fishermen—the latter group described by the Court as “independent entrepreneurs” and “independent businessmen”—the Court upheld the district court’s grant of injunctive relief to the processor, holding that the dispute was not a “labor dispute” under the NLGA.
Justice Hugo Black, writing for the Court, portrayed the dispute instead as one over the price of a commodity: “The controversy here is altogether between fish sellers and fish buyers.”
Despite the NLGA’s broad language specifying that a labor dispute need not involve an employer against an employee,
the Court in Columbia River Packers wrote that the employer–employee relationship must still be the matrix of the controversy.
Notably, however, courts before and after the Columbia River Packers decision have held that the exemption does still encompass disputes between people not precisely in an employer–employee relationship
—for instance, in circumstances involving pro-spective employees,
or in certain situations in which protected labor groups collaborate with independent contractors.
Nevertheless, courts have typically excluded independent contractors from the labor exemption altogether.
Though Columbia River Packers and its progeny have featured contractors who are independent businesspeople,
the exigencies of contemporary work arrangements have complicated the picture, as gig workers fall somewhere in between traditional employees and traditional independent contractors, exhibiting characteristics of both.
Additionally, an increasing number of independent contractors perform work formerly performed by employees as employers prefer contingent workforce models.
But the First Circuit’s approach in Jinetes may solve the problem of gig worker exclusion from the antitrust labor exemption.
The First Circuit in Jinetes held that workers may benefit from the labor exemption without regard to their employment status.
Following a work stoppage in Puerto Rico by a group of horse jockeys demanding higher wages, an association of horse owners and the owners of the only racetrack in Puerto Rico brought an antitrust suit.
The jockeys claimed that the statutory labor exemption applied to their conduct, but the district court ruled otherwise on account of the jockeys’ independent contractor status.
On appeal, the First Circuit sidestepped the question of employment status altogether, focusing instead on whether the jockeys were in a dispute over compensation for their labor.
Reversing the district court, the circuit court noted that the jockeys sought higher wages and safer working conditions and held that the group was engaged in a labor dispute, regardless of whether the jockeys were independent contractors.
Though the ruling currently only applies to the fourteen million people living within the jurisdiction of the First Circuit,
the Supreme Court’s denial of the owners’ certiorari petition
opens up the labor exemption to a rejuvenated development of case law at the circuit court level.
The First Circuit did not explicitly consider the Supreme Court’s statement in Columbia River Packers that the employer–employee relationship must be the matrix of the controversy to claim the exemption, treating it as dicta.
Instead, the First Circuit rejected the traditional categorical approach entirely, holding that the dispositive factor is not whether a party claiming the exemption is an employee but rather whether the dispute is about wages for labor or prices for goods.
For the horse jockeys, the subjects of their bargaining would be the same as if the jockeys were employees.
The First Circuit made no determination regarding the jockeys’ employment status and instead treated the question of whether a dispute is about compensation for labor as the essence of Columbia River Packers.
Focusing on employment status in determining coverage by the labor exemption, as prior courts have done, obviously implicates the misclassification issue that has plagued gig workers for years.
But the common law “control” test most commonly used to determine classi-fication does not account for the economic dependence of nominally independent contractors, such as the horse jockeys forced to contend with a racetrack monopsony in Jinetes.
Though the horse jockeys did not have the option of racing at a competing racetrack and thus had no real alternative place to work, they were nonetheless classified as independent contractors, at least by the racetrack and the district court. The First Circuit’s reasoning in Jinetes provides an avenue to allow independent contractors to organize without having to argue the misclassification issue. Instead, independent contractors claiming the exemption may argue that, regardless of their employment status, they are not truly independent like the fishermen in Columbia River Packers. While most notable labor exemp-tion cases involving independent contractors have featured coordination between independent businesspeople, Jinetes featured workers in a bona fide labor dispute of the kind contemplated by gig worker organizers.
II. The Narrow Interpretation of Jinetes
The First Circuit’s reasoning in Jinetes relies on a distinction between wages for labor and prices for commodities, which the court does not fully delineate.
The line between wages and prices is blurry, and much of the distinction depends on one’s conception of the purposes of the antitrust laws. A focus on the consumer-welfare-maximization goal of the antitrust laws may lead a court to take a narrow view of labor and look at whether a putative independent contractor provides anything other than their labor—for instance, rideshare drivers provide both their labor and tempo-rary usage of their cars.
In this case, a consumer-welfare-maximizing court applying Jinetes might hold that the labor exemption is unavailable because, although the labor of a human being may not be “a commodity or article of commerce,” to paraphrase the Clayton Act,
the contractor provides other goods or services that should properly fall within the ambit of the antitrust laws to ensure consumers enjoy the benefits of competition in the form of low prices.
Under this narrow view of Jinetes, which tends to treat compensation for services as prices rather than wages for labor, many gig workers would still not be able to claim the exemption. Indeed, much of the economic rationale behind platform companies is that gig workers typically provide material inputs, such as a rideshare driver using their own car to provide rideshare services.
These gig worker inputs, in turn, allow rideshare platforms to save significant money on capital expenditures because they obviate the need for the platform to purchase and maintain a fleet.
A narrow interpretation of Jinetes that restricts “labor disputes” to disputes involving only labor would still expand the exemption to include some independent contractors, but this expansion would only capture those gig platform models that do not rely on non-labor worker inputs.
For these task-based gig workers, even a narrow reading of Jinetes may expand opportunities for collective action.
But for gig workers such as the prototypical rideshare driver, the organizing environment would remain unchanged. These gig workers would still be treated by the law as workers were treated before the creation of the labor exemption, and today gig workers face many of the same problems that twentieth-century collective action ameliorated. For example, rideshare platform drivers commonly complain of low wages, but drivers on these platforms have no method of negotiating or giving input on their rates, meaning drivers in low-paying or low-demand markets must work longer hours if they want to earn more.
Rideshare drivers also face occupational safety and harassment issues—Uber drivers, for instance, may be unable to avoid violent or abusive passengers because they cannot see passenger ratings before accepting a ride.
Further, rideshare drivers have to contend with job insecurity, because they may be deactivated on a whim from their platforms due to changing platform standards like vehicle model requirements
or to low ratings and passenger complaints—even if such complaints are unfounded.
Through a collective bargaining framework, gig workers could advocate for themselves and compel their platforms to address worker grievances. But such frameworks have come under vitiating antitrust scrutiny,
and gig worker collective action outside of established bargaining frameworks—for example, an indefinite ride-share driver strike—would likely invite antitrust lawsuits as well.
III. The Broad Interpretation of Jinetes
The narrow view of Jinetes fails to consider gig workers as workers, but under a view of the antitrust laws that goes beyond consumer welfare and considers harms broadly construed, Jinetes may be more encompassing. The foremost school of thought that takes a broader approach to antitrust is the New Brandeis movement, which considers the effects of vast concentrations of private economic power on all facets of economic, social, and political life.
The New Brandeis approach provides an avenue to address harms to workers caused by powerful economic actors. A more labor-oriented view of antitrust enforcement is already evident in the Biden Administration, which in 2022 blocked a merger between two publishing giants on the theory that the resulting labor monopsony would be harmful to workers.
Additionally, Biden’s FTC Chair Lina Khan has indicated that her agency will not prosecute cases of collective action by gig workers,
and Biden-appointed FTC Commissioner Alvaro Bedoya voiced support in 2023 for a broader labor exemption that allows for gig worker organizing.
In the gig platform context, a labor antitrust reading of Jinetes would allow gig workers to challenge platforms’ concentrated economic power by concentrating their own power through collective bargaining and striking.
In contrast to the difficulties of collective action for gig workers in the United States, work stoppages have been a common tool for gig workers internationally.
To return to the rideshare example, Indian rideshare drivers conducted a two-week strike in 2018, through which they won a national fuel price index ensuring that driver earnings will increase as fuel costs increase.
Although U.S. rideshare drivers have also participated in strikes, these work stoppages have been limited in scope, often lasting for a single day, unlike the indefinite strikes seen in other countries.
Collective bargaining with gig platforms may become increasingly common internationally as well. The Supreme Court of the United Kingdom held in 2021 that Uber drivers were “workers,” an intermediate category between employees and independent contractors under U.K. law.
That classification not only entitled Uber drivers to the National Living Wage, holiday pay, and pensions, but it also allowed Uber’s 70,000 U.K. drivers to unionize and collectively bargain, which U.K. Uber drivers did three months after the ruling.
Uber Eats workers in Japan may soon follow suit, as labor authorities in Tokyo have held that these workers are covered by Japanese labor law and that Uber Eats must collectively bargain with them.
If Jinetes were interpreted to stand for the propositions that workers must be able to engage in collective action regardless of their employment status and that therefore disputes with platform companies over wages, hours, and working conditions constitute “labor disputes,” then most gig workers would likely be protected by the decision. This protection could expand the organizing options available to gig workers, including actions like the strikes and collective bargaining seen internationally. This broad interpretation of Jinetes could also allow states and cities to pass laws affirmatively protecting this collective action, attempts at which have been ensnared by antitrust problems in the past.
In 2015, Seattle became the first city to adopt an ordinance allowing collective bargaining by rideshare drivers.
The city’s collective bargaining framework permitted an elected driver representative to meet with platform representatives and negotiate certain standards related to the drivers’ work, including wages, hours, and working conditions, in the form of a written agreement.
After approval by the City, the agreement would become binding on the parties.
The ordinance went into effect in 2016, and the U.S. Chamber of Commerce filed suit against the City of Seattle in 2017 alleging NLRA preemption and Sherman Act preemption and violation.
Seattle claimed state-action immunity on the Sherman Act preemp-tion claim.
Under state-action immunity (or Parker immunity), a state may enact an anticompetitive restraint if the restraint is a product of “an act of government.”
But courts are skeptical of antitrust defendants claiming Parker immunity.
Without a showing that a putatively anticompetitive restraint flows directly from sovereign state action, a party claiming Parker immunity must satisfy the two-pronged Midcal test, which requires that (1) the challenged restraint be clearly articulated and affirm-atively expressed as state policy, and (2) the policy be actively supervised by the State.
On appeal, the Ninth Circuit held that the city ordinance did not pass the Midcal test, finding that the State of Washington had not clearly articulated a policy authorizing price-fixing by private parties in the rideshare driver market and that the State played no role in supervising the bargaining process, approving the agreements, or enforcing the ordinance.
The ordinance was thus struck down,
and no collective bargaining framework exists for rideshare drivers in Seattle today.
Because city or state collective bargaining frameworks for gig workers generally involve private parties organizing themselves, usually through another private party like a union, restraints on trade resulting from such arrangements do not flow directly from sovereign state action and thus must be able to pass the Midcal test in order to survive antitrust suits. In California, labor-friendly state legislators introduced a bill in 2016 that was substantially similar to the Seattle ordinance.
A state legislature (rather than a city council) passing the bill would satisfy the “clearly articulated state policy” Midcal prong,
but such a bill may still run into antitrust issues regarding the “active supervision” requirement, depending on the State’s role in reviewing the resulting collective bargaining agreement.
The California bill’s author later removed the proposed legislation from consideration due to antitrust concerns.
When asked why they pulled the bill, a spokesperson for the bill’s author noted that the bill contained “a number of untested legal theories,” implying that the bill may not have been able to pass muster before the California Assembly Judiciary Committee.
The spokesperson averred that their office needed to “really explore all the legal issues that could be involved with this bill” before putting it to a vote,
but, so far, California legislators have not reintroduced the bill.
New York state legislators drafted a bill in 2021 that would have allowed gig worker bargaining by all delivery and transportation network workers, including delivery drivers for platforms like DoorDash and Instacart.
But, unlike the Seattle ordinance, the New York bill estab-lished a sectoral bargaining framework, allowing gig worker unions to form industry councils with multi-platform company associations and negotiate standards that would govern entire industries.
This innovation addresses the “active supervision” requirement of the Midcal test because the State supervises the industry councils by approving or rejecting their recommendations. The bill’s authors, evincing concern about antitrust issues following the Ninth Circuit’s quashing of the Seattle ordinance, attempted to immunize their legislation from antitrust suits through several provisions: The bill invoked Parker immunity, the statutory and nonstatutory labor exemptions, and their New York State equivalents.
However, there was significant opposition to the bill from labor groups and it was ultimately never introduced.
Lawmakers in Connecticut and Massachusetts introduced similar bills in 2021 and 2023, respectively, but the Connecticut bill died in committee
and, as of November 2023, the Massachusetts bill is pending.
Both bills, like the New York bill, include clauses invoking various antitrust immunities and exemptions, showing a concern by lawmakers about opening their legislation up to antitrust liability.
Because the broad interpretation of Jinetes would make independent contractor organizing no longer a per se antitrust violation, states and municipalities that enact legislation authorizing or setting up frameworks for gig worker organizing would be able to withstand antitrust challenges under a broad Jinetes paradigm. States and cities would no longer have to claim Parker immunity if they can demonstrate that conduct authorized by their legislation does not violate the antitrust laws. For instance, the 2015 Seattle ordinance would likely have been able to survive legal challenges under a broad Jinetes labor exemption if Seattle could demonstrate that elected driver representatives and platforms were negotiating over wages, hours, and working conditions in the context of a labor dispute. And because the ordinance already survived NLRA preemption claims on appeal,
the Chamber of Commerce would have had to resort to other, likely weaker legal arguments to challenge Seattle’s collective bargaining framework.
The broad interpretation of Jinetes also specifically addresses the issue of gig worker striking. While cleverly drafted bills allowing sectoral bargaining by gig workers like those proposed in New York, Connecticut, and Massachusetts purport to resolve the collective bargaining issue without running afoul of antitrust laws,
it is difficult to imagine a state or local law allowing gig workers to strike without inviting antitrust liability. Without an antitrust exemption for gig workers, states understandably prefer sectoral bargaining frameworks to secure bargaining rights. By setting up industry councils that recommend industry-wide standards to be enacted by state agencies, states can avoid claims that they are sanctioning independent contractor collusion and more easily claim Parker immunity because no agreement is binding unless adopted by the State. But such frameworks do not work similarly for striking, which states cannot undertake by proxy like they can with collective bargaining. Indeed, the Connecticut and Massachusetts sectoral bargaining bills did not authorize striking, and the New York draft bill explicitly prohibited striking.
Under the broad Jinetes approach, on the other hand, gig workers who engage in strikes over the terms and conditions of their employment may claim exemption from the antitrust laws by demonstrating that they are in a labor dispute.
States and municipalities may even be able to improve on the NLRA’s provisions by introducing, for example, card check, stronger good-faith bargaining obligations, and broader remedies for retaliation.
Because independent contractors are excluded from the NLRA’s coverage, states and municipalities that expand gig workers’ collective action rights beyond NLRA protections will likely survive Garmon
preemption claims and may survive Machinists
preemption claims as well.
Absent federal action on the misclassification of gig workers as independent contractors, state and local regulation of platform companies may be the most fruitful avenue for protecting collective action by gig workers.
Conclusion
Gig workers may face antitrust liability for organizing, and states and municipalities that attempt to immunize gig workers from such liability may face antitrust lawsuits themselves. In many ways, the growth of the gig economy is an effort by firms to evade American labor law—business models that rely on independent contractors have the advantage of significantly lower costs, both on labor and in capital expenditures. Unimpeded by labor law, the growth of gig platforms continues apace; restrained by the antitrust laws, gig workers have no means to resist.
By interpreting the antitrust laws in the context of the modern economy, the First Circuit’s approach in the Jinetes case could represent the easiest path to securing collective action rights for gig workers. A reconceptualization of the antitrust labor exemption, the Jinetes rationale rejects the categorical approach in weighing the availability of the exemption. A court employing a broad Jinetes approach would not consider gig workers’ independent contractor status—as long as a group of workers was engaged in a labor dispute, their concerted action would not automatically run afoul of the antitrust laws. This interpretation would allow gig workers to finally engage in collective action and improve the terms and conditions of their work.