1 2 3 4 5 6 7 8 IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON FOR KING COUNTY 9 10 11 12 The WASHINGTON FOOD INDUSTRY ASSOCIATION, a Washington Non-Profit Corporation, and MAPLEBEAR INC. d/b/a INSTACART, a Delaware corporation Plaintiffs, 13 14 15 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES v. CITY OF SEATTLE, Honorable Roger Rogoff Defendant. 16 17 Case No. 20-2-10541-4 SEA Plaintiffs the Washington Food Industry Association (“WFIA”) and Maplebear Inc. 18 d/b/a Instacart (“Instacart”), through their attorneys, assert these claims against Defendant 19 the City of Seattle: I. 20 21 1. NATURE OF THE CASE In 2018, Washington voters approved Initiative 1634, the Prohibit Local Taxes on 22 Groceries Measure (codified as the Keep Groceries Affordable Act of 2018, RCW Chapter 82.84) 23 because “keeping the price of groceries as low as possible improves the access to food for all 24 Washingtonians.” To achieve its purpose, the Initiative prohibits “local government entities” 25 from imposing any “fee” or “assessment”—including any “charge, or exaction of any kind”—on 26 the “transfer” or “transportation” of groceries. This lawsuit arises from just such a prohibited 27 “charge” or “exaction” passed by the City on food and grocery delivery services in Seattle. 28 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 1 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 2. 1 Despite the will of Washington voters as expressed through the unequivocal 2 mandate of I-1634, on June 15, 2020, the Seattle City Council passed Council Bill 119799 3 (Ordinance 126094, the “Ordinance”), which Seattle Mayor Jenny Durkan signed on June 26, 4 2020.1 In an unprecedented action purportedly in response to the COVID-19 pandemic, the 5 Ordinance requires “food delivery network companies” (“FDNCs”), including those that deliver 6 groceries, to pay “premium pay” to independent contractors who provide delivery services 7 (referred to in the Ordinance as “gig workers”) of $2.50 for their first work-related stop on each 8 online order and $1.25 for each additional work-related stop on the same online order. 3. 9 The Ordinance’s requirement that FDNCs provide “premium pay” to persons 10 delivering groceries constitutes a new “fee,” “assessment,” “charge,” or “exaction of any kind” 11 on the transfer and transportation of groceries and is explicitly proscribed by I-1634. 4. 12 In addition to this premium pay, the Ordinance makes unprecedented intrusions 13 into FDNCs’ most fundamental management and operational decisions. The Ordinance prohibits 14 FDNCs from: (1) “reduc[ing] or otherwise modify[ing]” the areas they currently serve; 15 (2) reducing a delivery person or business’s compensation; (3) limiting a delivery person’s or 16 business’s earning capacity including by “restricting access to online orders”; and (4) “[a]dd[ing] 17 customer charges to online orders for delivery of groceries.” 5. 18 FDNCs that do not comply with the Ordinance, e.g., by inadvertently failing to 19 pay a single $1.25 bonus per additional pick-up or drop-off, face draconian and disproportionate 20 penalties. The penalties begin at $546.07 per aggrieved party and go up to $5,462.70 per 21 aggrieved party for a particular violation. 6. 22 By these extraordinary and unprecedented mandates, the Ordinance effectively 23 commandeers private network businesses for the benefit of specific members of the community— 24 “gig drivers” and consumers—rewrites the businesses’ independent contracts, and undermines 25 1 26 27 28 Ordinance 126094, “AN ORDINANCE relating to gig workers in Seattle . . . ,” was passed by the Seattle City Council on June 15, 2020, and signed into law by Seattle Mayor Jenny Durkan on June 26, 2020. On August 10, 2020 (after Plaintiffs filed the original complaint in this action), the Seattle City Council passed Ordinance 126122, which made “technical corrections” to Ordinance 126094. Ordinance 126122 was signed into law by Mayor Durkan on August 14, 2020. These ordinances are attached as Appendix A. As used herein, “the Ordinance” refers to Ordinance 126094 as amended by Ordinance 126122. FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 2 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 their ability to profitably provide essential grocery-delivery services to consumers. The 2 Ordinance violates Plaintiff Instacart’s rights protected by the Takings, Contracts, and Equal 3 Protection Clauses of the United States Constitution, as well as Article I, Sections 12, 16, and 23 4 of the Washington Constitution. 7. 5 Because the Ordinance, without a rational basis, also precludes FDNCs from 6 offsetting the compelled premium pay by reducing payments to delivery persons2 and charging 7 additional fees to customers for groceries, the Ordinance will cause Plaintiff Instacart and other 8 FDNCs to suffer unsustainable increased operational losses in the Seattle market. 8. 9 In effect, the Ordinance empowers the City to commandeer private food delivery 10 businesses to force them to provide services that the City has deemed “essential services” on an 11 unsustainable and commercially impracticable basis with no clear end-date in the City of Seattle. 12 This effect is particularly acute in the grocery-delivery business, which is the only business 13 prohibited from recouping Ordinance-imposed expenses from its consumers. That special 14 disadvantage leaves grocery-delivery businesses with no path to profitability. They alone are 15 expected to subsidize unprofitable deliveries in Seattle with revenues derived from other 16 jurisdictions and lines of business. 9. 17 Plaintiffs seek a declaratory judgment that the Ordinance is unlawful and invalid, 18 insofar as it applies to Plaintiffs’ facilitation of the delivery of groceries, because the Ordinance 19 violates I-1634 (as codified at RCW Chapter 82.84). Plaintiffs also seek declaratory relief that 20 the Ordinance (1) is an unreasonable and illegal intrusion on private business that exceeds the 21 scope of the City’s police powers to provide for the public health, safety, and welfare during and 22 after the COVID-19 emergency declared by the Mayor; (2) violates Plaintiff Instacart’s rights 23 protected by the Fifth and Fourteenth Amendments of United States Constitution under the 24 Takings and Equal Protection Clauses, respectively; (3) is an unconstitutional taking of private 25 property without just compensation in violation of Plaintiff Instacart’s rights under Article I, 26 27 28 2 Both natural persons and business entities contract with Instacart to use its platform to shop for and deliver groceries to customers. As used herein, the term “delivery persons” encompasses both groups. Instacart also refers to these independent contractors as “full-service shoppers.” FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 3 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 Section 16 of the Washington Constitution; (4) impairs contractual obligations in violation of the 2 Contracts Clauses of the United States Constitution (Article I, Section 10, Clause 1) and 3 Washington Constitution (Article I, Section 23); and (5) grants special privileges or immunities in 4 violation of Article I, Section 12 of the Washington Constitution. As a result, Plaintiffs seek 5 preliminary and permanent injunctions against any steps to enforce the Ordinance against 6 Plaintiffs. Plaintiff Instacart additionally seeks damages and attorneys’ fees for any costs 7 incurred pursuant to 42 U.S.C. § 1983. II. 8 9 10. PARTIES Plaintiff WFIA is a non-profit corporation organized under the laws of 10 Washington and headquartered in Olympia, Washington. WFIA’s members include independent 11 grocery stores, markets, convenience stores, and their suppliers operating throughout 12 Washington. WFIA’s grocer members are privately held and not publicly traded, often family- 13 owned, independent grocers who depend heavily on third party delivery services to remain 14 competitive with large national and international chains that can afford their own delivery 15 service. WFIA represents the interests of its retailer and wholesaler members on state and local 16 legislative issues that could upend their business operations, including labor, transportation, and 17 tax issues. 18 11. Plaintiff Instacart is a Delaware Corporation and WFIA member. Instacart 19 provides an innovative service that facilitates on-demand grocery shopping and delivery services. 20 Through its website and smartphone application, Instacart offers a method to connect independent 21 delivery persons with consumers seeking grocery shopping and delivery services from 22 participating grocery stores. Instacart operates across the United States, including in Seattle, and 23 in Canada. 24 12. Defendant City of Seattle is a municipal corporation chartered under authority 25 conferred by the Constitution of the State of Washington, with powers to enact legislative 26 measures as limited by applicable state, federal, and constitutional law. 27 28 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 4 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 III. 1 2 13. JURISDICTION AND VENUE This Court has jurisdiction over this matter. Washington superior courts have 3 original jurisdiction in all cases in equity, all cases in law that involve “the legality of any tax, 4 impost, assessment, toll or municipal fine,” and in all other cases in which the demand amounts 5 to three hundred dollars. RCW 2.08.010. This Court has the power to “declare rights, status, and 6 other legal relations whether or not further relief is or could be claimed,” RCW 7.24.010, and to 7 grant restraining orders and injunctions, RCW 7.40.010. 8 9 14. Venue is proper in King County Superior Court against the City of Seattle, a municipal corporation located and doing business in King County. See RCW 4.12.025. IV. 10 11 15. STANDING WFIA has associational standing to challenge the Ordinance. WFIA has a direct 12 interest in protecting its members from unlawful ordinances and regulations affecting the grocery 13 and convenience store industries. WFIA’s members, including Instacart, small, independent 14 grocery stores, and other businesses that sell food for pick-up and delivery through online orders, 15 will suffer immediate, concrete, and specific economic injury from the Ordinance. WFIA’s 16 privately held and often family-owned grocers depend heavily on third party delivery services to 17 remain competitive with large national and international chains that can afford to develop in- 18 house delivery services. Without viable third-party delivery services like Instacart, WFIA’s 19 members would face great difficulty competing against these large national chains. The 20 Ordinance unlawfully burdens WFIA members by increasing the costs of operating food-delivery 21 services to obtain delivered groceries in Seattle and threatening the economic viability of those 22 services in Seattle. WFIA conducts legislative advocacy on behalf of its members on a wide 23 variety of issues, including in the areas of labor, transportation, and taxation, and it challenges 24 laws and regulations that unlawfully burden its members’ businesses and operations. 25 16. Instacart has standing to challenge the Ordinance. Instacart meets the Ordinance’s 26 definition of a “covered hiring entity” that “hire[s] 250 or more gig workers worldwide” and is 27 therefore subject to the Ordinance’s regulation. Ord. § 100.020(A); see also id. § 100.010 28 (defining “hiring entity” to mean a “food delivery network company”). The Ordinance will FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 5 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 unlawfully usurp the business judgment of Instacart’s management and cause Instacart, a private 2 business, to suffer immediate, concrete, and specific economic injury, including by, among other 3 things: (1) forcing it to provide delivery persons with fixed “premium pay” for each “work- 4 related stop” in Seattle, thus significantly increasing its costs of doing business and the losses it 5 suffers on deliveries in Seattle; (2) prohibiting it from reducing or otherwise modifying the areas 6 of Seattle that it serves; (3) prohibiting it from reducing compensation to delivery persons; (4) 7 prohibiting it from restricting access to online orders; and (5) prohibiting it from adding charges 8 to its customers to reduce or offset its losses from the above. 9 17. The Court may also hear this action because it involves a controversy of 10 substantial public importance that immediately affects significant segments of the population who 11 rely on the delivery of groceries to reduce their exposure to disease and to obtain food during the 12 ongoing emergency lockdown. V. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALLEGATIONS OF FACTS Washington Voters Approve an Initiative to Prevent New Taxes, Fees, and Assessments on Groceries 18. Washington voters approved I-1634 in the general election on November 6, 2018. According to the explanatory statement which appeared in the Voters’ Pamphlet, “If adopted, Initiative 1634 would prevent local governments from imposing or collecting any new tax, fee, or other assessment on certain grocery items after January 15, 2018. This restriction would prohibit any new local tax, fee, or assessment of any kind on the manufacture, distribution, sale, possession, ownership, transfer, transportation, container, use, or consumption of certain groceries.” The Voters’ Pamphlet “Argument For” I-1634 section highlighted that the initiative would “help keep groceries affordable.” 19. I-1634 is codified at RCW Chapter 82.84. The statute prohibits local governments from “impos[ing] or collect[ing] any tax, fee, or other assessment on groceries.” RCW 82.84.040(1). The phrase “tax, fee, or other assessment on groceries” is broadly defined and “includes, but is not limited to . . . any . . . charge[] or exaction of any kind on groceries or the . . . transfer, [or] transportation . . . thereof.” RCW 82.84.030(5). FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 6 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 2 3 Acting at the Behest of Organized Labor, the Seattle City Council Flouts the Will of Washington Voters and Engages in Overreach in Enacting the Ordinance 20. The Ordinance resulted from a long-standing collaboration among members of the 4 City Council, their staff, and labor organizations including Working Washington, the 5 International Brotherhood of Teamsters (the “Teamsters”), Service Employees International 6 Union (“SEIU”), and United Food Commercial Workers Union (“UFCW”) to raise the wages of 7 so-called “gig workers” irrespective of the COVID-19 emergency. Following Mayor Durkan’s 8 Proclamation of Civil Emergency on March 3, 2020, Working Washington emailed 9 Councilmembers Lisa Herbold and Andrew Lewis on April 26, 2020, suggesting a $5 surcharge 10 on food deliveries made by gig workers. Councilman Lewis began working on Council Bill 11 119799 that same day. 12 21. The City Council and its staff remained in close communication with Working 13 Washington over significant aspects of Council Bill 119799, including the industries that would 14 be affected, which types of workers would be covered, the specific amount of the premium pay 15 mandate, whether covered entities could pass on the costs of compliance, and other key details. 16 The City Council also sought comment on the bill from SEIU and UFCW. 17 22. As contemporaneous communications make clear, the Seattle City Council and the 18 labor unions with which it consulted were intent on increasing pay to food delivery persons and 19 used the COVID-19 emergency as a pretext to do so. Working Washington is closely affiliated 20 with labor organizations in Seattle that seek to organize gig workers and drive up pay for certain 21 gig workers notwithstanding many workers prefer to remain independent and work for multiple 22 platforms on their own schedule. 23 23. For example, in a May 20, 2020 email, Rachel Lauter of Working Washington 24 offered to explain Working Washington’s “thinking on the math” to Councilmember Lewis, who 25 had assumed responsibility for drafting the portion of the legislation covering food deliveries. 26 Ms. Lauter expressed that the goal of the legislation was to ensure that “people classified as 27 essential workers can at least support themselves at the well-established baseline level of 28 $15/hour.” FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 7 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 24. On June 15, 2020, the Seattle City Council passed the Ordinance. Among other 2 things, the Ordinance mandates that FDNCs—including Plaintiff Instacart—pay delivery persons 3 (referred to in the Ordinance as “gig workers”) “premium pay” for “each online order that results 4 in . . . a work-related stop in Seattle.” Ord. § 100.025(A). A “work-related stop in Seattle” 5 means “time spent . . . that is related to the provision of delivery services associated with an 6 online order.” The mandated “premium pay” is “$2.50 for one pick-up point or one drop-off 7 point in Seattle,” “$1.25 for each additional pick-up point in Seattle,” and “$1.25 for each 8 additional drop-off point in Seattle.” Id. The bill contained no legislative findings, however, 9 relating the amount of premium pay to existing hourly income or the goal of achieving some goal 10 11 of minimum hourly income. 25. The Ordinance’s premium pay provisions remain in effect during the emergency 12 declared by Mayor Durkan on March 3, 2020, in response to COVID-19. That emergency 13 declaration, in turn, has no end date. 14 26. Moreover, the Ordinance makes it clear that the City Council plans to weigh 15 permanent, mandatory increases in gig worker pay, regardless of the COVID-19 emergency’s 16 duration. As explained in Section 100.025(E), “If the City establishes a minimum compensation 17 standard for gig workers, the Council intends to consider eliminating the premium pay 18 requirement for gig workers before the termination of the civil emergency.” 19 27. As originally introduced, and as discussed in communications between the City 20 Council and Working Washington, the Ordinance would have also applied the premium pay 21 mandate to transportation network companies (“TNCs”) like Uber and Lyft that “offer[] 22 prearranged transportation services for compensation using an online-enabled application or 23 platform.” However, at the request of the Teamsters, who purported to be drafting broader 24 legislation covering TNCs, the TNCs were removed from the Ordinance’s scope, even though 25 TNC drivers, like taxi drivers and many other occupations in the City, face demonstrably higher 26 risks of infection than grocery delivery drivers because they have direct person-to-person contact 27 while transporting individuals in the confined spaces of their vehicles-for-hire. 28 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 8 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 28. The Ordinance states in prefatory language that “gig workers working for food 2 delivery network companies during the COVID-19 emergency face magnified risks of catching or 3 spreading disease because the nature of their work can involve close contact with the public.” 4 The Ordinance also states that “provid[ing] premium pay to gig workers protects public health, 5 supports stable incomes, and promotes job retention by ensuring that gig workers are 6 compensated now and for the duration of the public health emergency for the substantial risks, 7 efforts, and expenses they are undertaking to provide essential services in a safe and reliable 8 manner during the COVID-19 emergency.” 9 29. The Ordinance lacks any standards or rules requiring that premium payments be 10 used by delivery persons to take proactive steps to increase health and safety. The Ordinance 11 identifies and requires no nexus between additional cash bonuses and reducing alleged hazards 12 faced by food delivery persons as a result of the COVID-19 emergency; it does not require that 13 delivery persons actually take precautions to safeguard health; and it contains no finding that the 14 amount of the bonus payments bears any relation to the cost of necessary personal protective 15 supplies. 16 30. The Ordinance also contains no legislative findings that food delivery persons are 17 at a greater risk for contracting COVID-19 than are TNC drivers or any other workers providing 18 similar services during the COVID-19 emergency, such as taxicab drivers, private and for-hire 19 drivers, courtesy drivers, grocery-delivery drivers other than gig workers, workers making far 20 more frequent home deliveries of other essential and non-essential goods, retail and grocery-store 21 workers, food-service workers, or restaurant workers. 22 31. The Ordinance is a solution in search of a problem that does not exist. In fact, 23 delivery persons that use FDNCs’ platforms are already experiencing a large increase in demand 24 for their services—and therefore are working and earning more—as a result of the pandemic. In 25 the three months after Mayor Durkan declared a COVID-19 emergency, the number of delivery 26 persons contracting with Instacart had already more than tripled, from approximately 1,000 27 delivery persons serving Seattle to well over 3,000. As a result of the COVID-19 emergency, 28 there has been an ample increase in the supply of food delivery services to handle the increased FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 9 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 demand for grocery delivery services from persons who wish to avoid the risks of in-person 2 shopping. 3 32. Moreover, even before the Ordinance was introduced, the average hourly pay of 4 delivery persons had also already increased substantially. Delivery persons contracting with 5 Instacart were earning approximately $20 per hour working in Seattle in January and February 6 2020, including tips. As a result of increased demand leading to greater efficiencies that directly 7 benefit delivery persons, they enjoyed a 50% increase—earning approximately $30 per hour 8 worked as of May 2020, including tips, nearly double the $16.39 minimum wage Seattle imposes 9 on the largest employers in the City, all before the premium payments were mandated under the 10 Ordinance. 11 33. The transcripts of statements by City Council members during deliberation and 12 adoption of the Ordinance, published reports and information from City officials, and 13 communications between City Council members, their staff, and Working Washington (and other 14 labor organizations), all reveal that, rather than ensuring continuity of food delivery services, the 15 main motivation for singling out FDNCs for the premium pay requirements was to assist certain 16 labor organizations in achieving their long-standing and continuing goal to organize workers in 17 the so-called “gig economy.” 18 34. The Ordinance also prohibits FDNCs from taking any of the following actions “as 19 a result of this ordinance going into effect”: (1) “reduc[ing] or otherwise modify[ing]” the areas 20 of Seattle that are currently served; (2) reducing a delivery person or business’s compensation; 21 (3) limiting a delivery person or business’s earning capacity including by “restricting access to 22 online orders”; and (4) adding “customer charges to online orders for delivery of groceries.” 23 These provisions intrude into the core business and operations decisions of Instacart and other 24 WFIA members. 25 35. As originally enacted, the Ordinance’s provisions in the preceding paragraph 26 forbidding FDNCs from taking certain actions were to remain in effect for three years following 27 the termination of the civil emergency declared by Mayor Durkan on March 3, 2020. Following 28 the filing of the Complaint in this action, in a “technical amendment” to the Ordinance enacted FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 10 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 through Council Bill 119841 and signed by Mayor Durkan on August 14, 2020, those provisions 2 are now in effect only for the duration of the civil emergency, which is ongoing and will continue 3 indefinitely. 4 36. The Ordinance also imposes steep penalties for violations. Upon receipt of a 5 complaint that an FDNC has violated the Ordinance, the City’s Office of Labor Standards 6 (“Agency”) will launch an investigation. The Ordinance gives the Agency Director the power to 7 impose relief for each violation, including ordering corrective action, and/or payment of unpaid 8 compensation, liquidated damages, civil penalties, fines, and interest. 9 37. The Ordinance also empowers the Director to request that the City’s Department 10 of Finance and Administrative Services deny, suspend, refuse to renew, or revoke the business 11 license of an FDNC until it complies with any remedy as defined in a settlement agreement or 12 final order. 13 38. The Ordinance also creates a private right of action, providing that “[a]ny person 14 or class of persons that suffers financial injury as a result of a violation of this ordinance, or is the 15 subject of prohibited retaliation under Section 100.050, may bring a civil action.” 16 17 18 The Relationship Established by Food Delivery Network Companies Benefits Retailers, Consumers, and Delivery Persons 39. FDNCs operate a multi-sided platform involving relationships among multiple 19 parties, which benefits all parties, not just the FDNCs. First, FDNCs create an online 20 marketplace or platform. Second, grocery stores and other retailers use the platform to offer their 21 products to consumers. Third, consumers search for and purchase products through the platform. 22 Fourth, independent delivery persons, or their personnel, choose to provide services through the 23 platform by delivering retailers’ products to consumers. 24 40. Grocery stores benefit from the operations of FDNCs, which provide them greater 25 access to customers. Instacart has enabled grocery stores to access new revenue streams without 26 the prohibitive investment in the infrastructure necessary to create their own on-demand online 27 ordering and delivery systems. In 2019, Instacart’s online delivery technology increased grocery 28 store revenues by $55.8 million in Washington. More significant for this case, from 2014 to FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 11 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 2018, net employment in Seattle metropolitan area grocery retailers has increased by 2 approximately 1,700 persons—and all of that net increase was attributable to increased sales 3 through Instacart. See, e.g., Robert Kulick, The Economic Impact of Instacart on the Retail 4 Grocery Industry: Evidence from Four States (2020). 5 41. Consumers also benefit from the multi-party relationship established by FDNCs 6 by having access to a broader range of on-demand food options and being able to obtain groceries 7 without going into a grocery store. These benefits are especially relevant during the COVID-19 8 pandemic, particularly for consumers in higher-risk populations. During the COVID-19 9 emergency, Instacart has seen an increase in the percentage of new customers who are 45 or older 10 or retired. The networks have also helped reduce traffic in retail outlets overall, thereby 11 promoting social distancing and potentially slowing the virus’s spread. 12 42. In addition to the increased employment and earnings above, food delivery 13 persons working on independent contracts, often with multiple network technology companies 14 simultaneously, also benefit from the relationship. They enjoy significant freedom and discretion 15 over when, where, and how long to work. They choose which orders to fulfill, when to fulfill 16 them, and how many to fulfill. Because they are independent contractors and not employees, 17 they are never required to accept a particular order or work in a specific place or at a specific 18 time. This freedom most benefits workers who could not work assigned full-time shifts, 19 including students, working parents, and people with limited work histories. 20 43. In fact, the availability of essential delivery-network jobs has been a lifeline for 21 many people during the pandemic. Throughout the country, delivery networks have seen an 22 influx of hundreds of thousands of workers offering their services for the first time, many of them 23 recently unemployed as a result of nationwide shutdowns. In Seattle, Plaintiff Instacart has 24 tripled the number of delivery persons with whom it contracts, from approximately 1,000 to well 25 over 3,000. 26 44. When providing services through a delivery network, workers are typically paid 27 through a mix of service fees or payments and customer tips. During the COVID-19 emergency 28 in Seattle, there has been a surge in the number of customers ordering groceries online through FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 12 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 the FDNCs. Workers’ earnings per hour increased because of the increased number of deliveries 2 they can make per trip to the grocery store, and the overall increase in the number of deliveries 3 ordered by customers. The earnings have also increased because the size of the average order— 4 or “batch”—has increased, and thus the corresponding payment from Instacart has also increased. 5 45. For example, delivery persons contracting with Instacart enjoyed an increase of 6 approximately 50% in total average hourly earnings compared to earnings immediately before 7 COVID-19, due in large part to network efficiencies created by greater demand and larger 8 average orders during the pandemic. In other words, well before the Ordinance was passed, 9 delivery persons were already enjoying a huge increase in earnings to compensate them for the 10 11 allegedly higher risks during COVID-19. 46. Unlike drivers for TNCs, food delivery persons do not transport passengers and so 12 are at a low risk of infection while performing much of their job—driving from grocery stores to 13 residences. When they arrive at a customer’s residence, the default setting for all food deliveries 14 is “Leave at My Door” to minimize person-to-person contact. 15 47. Instacart has also taken various measures to promote the health and safety of 16 independent contractors in Seattle on the Instacart platform during the COVID-19 emergency. 17 Instacart offers a free health-and-safety kit that includes a washable face mask and hand sanitizer 18 to any active delivery person who requests one. All Instacart delivery persons in the United 19 States can use Apple Pay or Google Pay to check out of grocery stores without needing to touch 20 their wallets or use a keypad to pay. 21 48. Instacart has also updated its mobile app to provide access to safety resources and 22 daily in-app wellness checks that direct users to contact their healthcare providers if they have 23 COVID-19 symptoms. And delivery persons who submit proof of a COVID-19 diagnosis such 24 as a doctor’s note automatically receive a lump-sum payment equal to their earnings from 25 Instacart for their last 14 days of delivery services (exclusive of tips) and are suspended from 26 making deliveries during that period. 27 28 49. Instacart’s relationship with delivery persons is governed by an Independent Contractor Agreement that delivery persons voluntarily sign prior to undertaking any deliveries FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 13 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 for Instacart. This agreement gives Instacart the right to modify the terms of the Full Service 2 Shopper Account Access Guidelines. 3 4 The Ordinance Will Cause Substantial Harm to Instacart, Other FDNCs, and the Public 50. Instacart and other FDNCs operating or seeking to operate in Seattle will 5 immediately and irreparably suffer financially unsustainable damages as a direct result of the 6 Ordinance if it is not invalidated. For example, Plaintiff Instacart will (1) be obligated to pay 7 premium pay, causing Instacart to lose additional money on every delivery; (2) be prohibited 8 from managing its business to profitability—particularly in its use of independent contractors, 9 charges to consumers, and the geographic areas it chooses to serve—to address its evolving 10 economic and financial circumstances; and (3) suffer further harm by incurring significant 11 compliance costs, including costs associated with reengineering the platform to comply with the 12 law, keeping records, and providing delivery persons with required notices translated into 13 multiple languages. 14 15 51. The Ordinance also subjects Plaintiffs to duplicative and draconian penalties, fines and civil judgments. 16 VI. CAUSES OF ACTION 17 18 19 52. challenge the constitutionality, legality, validity, or enforceability of the Ordinance. FIRST CAUSE OF ACTION THE ORDINANCE VIOLATES I-1634 20 21 22 23 24 25 26 Plaintiffs reserve the right to raise any legal bases under Washington law to 53. Plaintiffs incorporate by reference the allegations in all the preceding paragraphs. 54. There is an actual, present, and justiciable controversy as to whether the Ordinance’s “premium pay” provision, insofar as it applies to Plaintiffs’ facilitation of the delivery of groceries, violates I-1634, as codified at RCW Chapter 82.84. A judicial determination on the illegality, invalidity, and enforceability of the Ordinance will conclusively resolve these issues of substantial public concern and the parties’ dispute. 27 28 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 14 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 55. I-1634, as codified at RCW Chapter 82.84, states that (subject to certain 2 exceptions not applicable here) “a local governmental entity may not impose or collect any tax, 3 fee, or other assessment on groceries.” The phrase “[t]ax, fee, or other assessment on groceries” 4 “includes, but is not limited to . . . any . . . charge[] or exaction of any kind on groceries or 5 the . . . transfer [or] transportation . . . thereof.” RCW 82.84.030(5). 6 56. The Ordinance violates RCW Chapter 82.84, insofar as it applies to Plaintiffs’ 7 facilitation of the delivery of groceries, because its premium pay provisions constitute a “fee,” 8 “other assessment,” “charge,” or “exaction of any kind” on the transfer or transportation of 9 groceries. 10 11 12 57. Because the People have prohibited cities from levying and enacting such fees, assessments, charges, and exactions, the Ordinance is illegal, invalid, and void. 58. The Ordinance is also preempted by state law because it directly and 13 irreconcilably conflicts with the state’s prohibition on localities imposing any charge or exaction 14 of any kind on the transfer or transportation of groceries. I-1634 contains an express legislative 15 intent to occupy the entire field in which the Ordinance aims to regulate, and the Ordinance does 16 not meet one of the exceptions in subsections (2)-(4) of RCW 82.84.040 that permit a locality 17 concurrent jurisdiction with the state. 18 19 59. Instacart is suffering and will continue to suffer damages as a direct result of the Ordinance’s violation of I-1634. SECOND CAUSE OF ACTION THE ORDINANCE EXCEEDS THE CITY’S POLICE POWERS 20 21 60. Plaintiffs incorporate by reference the allegations in all the preceding paragraphs. 61. The Ordinance relies on the City’s police powers as the source of the City’s 22 23 authority to enact and enforce the Ordinance. The Ordinance declares that it is an “emergency 24 ordinance,” and it purports to promote “public health, safety, and welfare during the . . . COVID25 19 . . . emergency.” 26 62. To be a lawful exercise of police power, an ordinance must be reasonably 27 necessary in the interest of the public health, safety, morals, and general welfare and be 28 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 15 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 substantially related to the evil sought to be cured. In addition, the classes of businesses, 2 products, or persons regulated must be reasonably related to the legitimate object of the 3 legislation. 4 63. The Ordinance is an arbitrary and irrational response to the COVID-19 5 emergency, and the City Council’s intention in passing the Ordinance was to promote labor 6 organizations’ goals to organize certain workers for higher pay by using the emergency as a 7 pretext. If the Ordinance were a rational response to the COVID-19 emergency, the Ordinance 8 would not single out FDNCs for regulation while omitting many other workers who provide 9 essential services and come into greater contact with the public, and thereby are exposed to a 10 11 greater risk of viral contraction. 64. Instacart is suffering and will continue to suffer damages as a direct result of the 12 Ordinance’s intrusions on their rights to control and manage their business operations and 13 contractual relationships. 14 THIRD CAUSE OF ACTION THE ORDINANCE TAKES PRIVATE PROPERTY IN VIOLATION OF THE FEDERAL AND STATE CONSTITUTIONS 15 16 65. Plaintiffs incorporate by reference the allegations in all the preceding paragraphs. 17 66. The Takings Clause of the Fifth Amendment of the Constitution of the United 18 States, extended to state and local governments by the Fourteenth Amendment, provides that no 19 private property shall be taken for public use without just compensation. The Washington 20 Constitution’s provision on Eminent Domain (Article I, Section 16) provides the same restriction 21 that private property shall not be taken for public or private use without just compensation. The 22 Ordinance violates both the Takings Clause in the U.S. Constitution and the Eminent Domain 23 section of the Washington Constitution. 24 67. The U.S. Supreme Court has held that the Takings Clause applies to intangible 25 property, such as contract rights, and that “regulatory” takings may be unlawful even where they 26 do not directly appropriate real or tangible property. 27 28 68. By compelling Instacart to pay unsustainable premium pay for every food delivery in Seattle, while prohibiting Instacart from taking any steps to pass the costs of such charges to FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 16 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 consumers or receive any compensation from the government or reduce or modify areas of 2 Seattle served by FDNCs, the City is rendering commercially impracticable Instacart’s previously 3 agreed-to contracts for services with the independent contractor delivery persons and their 4 facilitation of food delivery services to consumers, effecting a regulatory taking of Instacart’s 5 intangible property without just compensation. 6 69. Further, by prohibiting FDNCs from reducing or otherwise modifying the areas of 7 Seattle served regardless of profitability or business needs while simultaneously prohibiting 8 Instacart from passing through to Instacart’s customers the substantial additional charges and 9 exactions the City is imposing, the City is appropriating Instacart’s fundamental property rights in 10 its business for the private benefit of independent contractors receiving “premium pay” not 11 required by contract and Seattle residents paying below-marginal cost for food delivery services, 12 without just compensation. 13 14 15 16 70. Instacart is suffering and will continue to suffer damages as a direct result of the City’s unconstitutional takings. FOURTH CAUSE OF ACTION THE ORDINANCE IMPAIRS EXISTING CONTRACTUAL OBLIGATIONS IN VIOLATION OF THE FEDERAL AND STATE CONSTITUTIONS 17 71. Plaintiffs incorporate by reference the allegations in all the preceding paragraphs. 18 72. The Contracts Clause of the Constitution of the United States (Article I, Section 19 10, Clause 2) provides: “No State shall … pass any Law impairing the obligation of Contracts.” 20 The Washington Constitution’s Contracts Clause (Article I, Section 23) likewise provides: “No 21 bill of attainder, ex post facto law, or law impairing the obligations of contracts shall ever be 22 passed.” The Ordinance violates the contracts clauses of both the federal and state constitutions. 23 73. The Ordinance substantially impairs Instacart’s preexisting contractual 24 relationships by altering the contractual obligations owed to Instacart and by depriving it of the 25 benefit of its contractual rights and protections. Specifically, Section 100.027(A) of the 26 Ordinance impairs several terms of Instacart’s Independent Contractor Agreement with delivery 27 persons. First, in Section 5.3 of that agreement, “Instacart reserves the right to modify the terms 28 of Full Service Shopper Account Access Guidelines from time to time when Instacart determines, FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 17 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 in its reasonable and good faith business judgment, it is necessary to do so to ensure the safe and 2 reliable operation of the Instacart platform.” The Ordinance impairs that right by barring 3 Instacart from: reducing areas served, Section 100.027(A)(1); reducing a shopper’s 4 compensation, Section 100.027(A)(2); and limiting a shopper’s earning capacity, Section 5 100.027(A)(3). Section 100.027(A)(3) of the Ordinance impairs provision 5.4 of Instacart’s 6 Independent Contractor Agreement because it infringes on Instacart’s right to “stop providing 7 access to the Instacart Platform services” whenever it deems “necessary.” And Section 8 100.027(A)(3)’s ban “limit[ing] a gig worker’s earner capacity, including … restricting access to 9 online orders” also impairs section 6.6 of the Independent Contractor Agreement, which states 10 that “Instacart does not guarantee the availability of the Instacart Platform” to delivery persons. 11 74. These contractual impairments are substantial. Instacart’s business model requires 12 contractual terms that ensure the platform remains flexible and responsive to evolving market 13 demands. The ability to modify terms and expand or limit access to the platform is thus essential 14 to Instacart’s business model. The Ordinance’s sweeping restrictions severely diminish the value 15 of Instacart’s contracts. 16 75. The Ordinance was not drawn in an appropriate or reasonable way to advance a 17 significant and legitimate public purpose. The Ordinance broadly adjusts the rights and 18 responsibilities under existing contracts beyond the degree necessary to advance any rational and 19 legitimate purpose of addressing the health and safety conditions caused by COVID-19. 20 21 22 23 76. Instacart is suffering and will continue to suffer damages as a direct result of the Ordinance’s impairment of existing contracts. FIFTH CAUSE OF ACTION THE ORDINANCE VIOLATES THE EQUAL PROTECTION CLAUSE OF THE FOURTEENTH AMENDMENT OF THE UNITED STATES CONSTITUTION 24 77. Plaintiffs incorporate by reference the allegations in all the preceding paragraphs. 25 78. The Ordinance’s mandate to provide premium pay applies exclusively to FDNCs, 26 which are defined as “an organization whether a corporation, partnership, sole proprietor, or other 27 form, operating in Seattle, that offers prearranged delivery services for compensation using an 28 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 18 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 online-enabled application or platform, such as an application dispatch system, to connect 2 customers with workers for delivery from one or more of the following: (1) eating and drinking 3 establishments, (2) food processing establishments, (3) grocery stores, or (4) any facility 4 supplying groceries or prepared food and beverages for an online order.” 5 79. The Equal Protection Clause of the Fourteenth Amendment of the United States 6 Constitution provides that no state shall make or enforce any law which shall abridge the 7 privileges or immunities of citizens of the United States; nor shall any state deprive any person of 8 life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction 9 the equal protection of the laws. 10 80. The Ordinance violates the Equal Protection Clause. By singling out FDNCs, the 11 Ordinance is designed to increase earnings for a subset of persons working in grocery and food 12 delivery. The City Council purports to justify its differential treatment of those food delivery 13 workers who use FDNCs’ platforms because those workers allegedly confront special health 14 hazards in their line of work. But because these workers have no passengers and are not near 15 other people when driving, they face lower risks of infection than the grocery store workers who 16 spend their entire day in the stores, or food workers in restaurants who deal with customers in 17 person or who deliver food to customers, or transportation network drivers who transport 18 passengers in the close confines of their vehicle for hire. There is no rational basis for singling 19 out food delivery persons for using FDNCs’ platforms for the premium pay requirement on food 20 deliveries, and certainly no rational basis for doing so by imposing unsustainable requirements on 21 Plaintiff Instacart without allowing it to pass on the additional charges or stop doing business in 22 Seattle. In fact, the Ordinance bars Instacart from even adjusting its service levels, effectively 23 freezing its businesses in place. The Ordinance places no similar burdens on taxis, TNCs, or any 24 other businesses or service providers in the grocery and food industry that face equal or greater 25 risks of exposure. 26 81. 27 Instacart is suffering and will continue to suffer damages as a direct result of the Ordinance’s unequal treatment of its business. 28 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 19 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 2 SIXTH CAUSE OF ACTION THE ORDINANCE VIOLATES ARTICLE I, SECTION 12 OF THE WASHINGTON CONSTITUTION 3 82. Plaintiffs incorporate by reference the allegations in all the preceding paragraphs. 4 83. Article I, Section 12 of the Washington Constitution provides: “No law shall be 5 passed granting to any citizen, class of citizens, or corporation other than municipal, privileges or 6 immunities which upon the same terms shall not equally belong to all citizens, or corporations.” 7 84. The Ordinance violates Article I, Section 12 by treating similarly situated 8 businesses differently without justification. The Ordinance singles out FDNCs for uniquely 9 disfavored treatment, placing no similar burdens on taxis, TNCs, or any other businesses or 10 service providers in the grocery and food industry that face equal or greater risks of exposure. 11 The Ordinance’s severe restrictions on Instacart’s operations—including the Ordinance’s 12 premium pay requirement, its prohibition on allowing Instacart to pass on additional costs, and its 13 mandate that Instacart maintain its existing service in Seattle—implicate Instacart’s fundamental 14 right to carry on business in the State. No reasonable ground exists to justify the Ordinance’s 15 disparate treatment of FDNCs vis-à-vis other similarly situated businesses. 16 17 85. Ordinance’s violation of this clause. 18 SEVENTH CAUSE OF ACTION INSTACART’S CLAIM FOR VIOLATION OF 42 U.S.C. § 1983 19 20 21 22 23 24 25 26 27 Instacart is suffering and will continue to suffer damages as a direct result of the 86. Instacart incorporates by reference the allegations in all the preceding paragraphs. 87. 42 U.S.C. § 1983 prohibits any State from depriving any citizen of the United States of any of the “rights, privileges, or immunities secured by the Constitution and laws” of the United States. 88. By enacting the Ordinance, the Seattle City Council has, under color of law, violated the rights of Instacart protected by the United States Constitution and federal law. 89. Instacart is entitled to recover damages and attorneys’ fees as a result of such violations. 28 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 20 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 VII. 1 PRAYER FOR RELIEF 2 WHEREFORE, Plaintiffs request that judgment be entered as follows: 3 1. Declaratory Relief. a. For a declaratory judgment that the Ordinance is illegal, invalid, and 4 5 unenforceable insofar as it applies to Plaintiffs’ facilitation of the delivery 6 of groceries because it violates I-1634, as codified at RCW Chapter 82.84. b. For a declaratory judgment that the Ordinance is illegal, invalid, and 7 unenforceable in its entirety because it lacks a rational basis. 8 c. For a declaratory judgment that the Ordinance is illegal, invalid, and 9 10 unenforceable in its entirety because it violates the Takings Clauses of the 11 United States Constitution and the Washington Constitution. d. For a declaratory judgment that the Ordinance is illegal, invalid, and 12 13 unenforceable in its entirety because it impairs existing contractual 14 obligations in violation of the Contracts Clause of the United States 15 Constitution (Article I, Section 10, Clause 2) and the Washington 16 Constitution (Article I, Section 23). e. For a declaratory judgment that the Ordinance is illegal, invalid, and 17 18 unenforceable in its entirety because it violates the Equal Protection Clause 19 of the Fourteenth Amendment of the United States Constitution. 20 f. For a declaratory judgment that the Ordinance is illegal, invalid, and 21 unenforceable in its entirety because it violates Article I, Section 12 of the 22 Washington Constitution. 23 2. Damages. Plaintiff Instacart seeks an award of damages for the financial and 24 economic injuries it is suffering and will continue to suffer as a result of the Ordinance, including 25 the marginal cost of premium pay that it is prohibited from recouping from its customers. 26 3. Injunctive Relief. Plaintiffs’ rights to be free of the burdens of an ordinance that 27 violates federal and state law are in jeopardy of immediate invasion, which will cause Plaintiffs to 28 suffer substantial irreparable injury. Plaintiffs pray for preliminary and permanent injunctions FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 21 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 1 staying and restraining the City from taking any steps to implement, collect, or enforce collection 2 of any sum of money due that is purportedly authorized by the Ordinance, and otherwise enforce 3 any provision. 4 5 6 7 4. Attorneys’ Fees and Cost of Suit. For Plaintiffs’ attorneys’ fees, costs, and expenses of bringing this suit, to the extent permitted by law or equity. 5. Other Relief. For such other and further relief as the Court deems just, proper, and equitable. 8 9 DATED this 2nd day of September, 2020. ORRICK, HERRINGTON & SUTCLIFFE LLP 10 By: s/Robert M. McKenna Robert M. McKenna (WSBA# 18327) Daniel J. Dunne (WSBA# 16999) Christine Hanley (WSBA# 50801) 701 Fifth Avenue, Suite 5600 Seattle, WA 98104 Telephone (206) 839-4300 Fax (206) 839-4301 rmckenna@orrick.com ddunne@orrick.com chanley@orrick.com 11 12 13 14 15 16 Attorneys for Plaintiffs the Washington Food Industry Association and Maplebear Inc. d/b/a Instacart 17 18 19 20 21 22 23 24 25 26 27 28 FIRST AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND DAMAGES 22 Orrick Herrington & Sutcliffe LLP 701 5th Avenue, Suite 5600 Seattle, Washington 98104-7097 tel+1-206-839-4300 APPENDIX A Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 CITY OF SEATTLE 2 ORDINANCE __________________ 3 COUNCIL BILL __________________ 4 5 6 7 8 9 10 AN ORDINANCE relating to gig workers in Seattle; establishing labor standards requirements for premium pay for gig workers working in Seattle; amending Sections 3.02.125 and 6.208.020 of the Seattle Municipal Code; declaring an emergency; and establishing an immediate effective date; all by a 3/4 vote of the City Council. WHEREAS, the new coronavirus 19 (COVID-19) disease is caused by a virus that spreads easily 11 from person to person and may result in serious illness or death, and is classified by the 12 World Health Organization as a worldwide pandemic; and 13 WHEREAS, COVID-19 has broadly spread throughout Washington State and remains a 14 significant health risk to the community, especially members of our most vulnerable 15 populations; and 16 WHEREAS, the definitions of “employee” and “employer” in local, state, and federal laws are 17 broad, but food delivery network companies rely on business models that hire gig 18 workers as “independent contractors,” thereby creating barriers for gig workers to access 19 employee protections; and 20 WHEREAS, gig workers working for food delivery network companies during the COVID-19 21 emergency face magnified risks of catching or spreading disease because the nature of 22 their work can involve close contact with the public, including members of the public 23 who are not showing symptoms of COVID-19 but who can spread the disease; and 24 WHEREAS, The City of Seattle (City) intends to make it clear that gig workers working for food 25 delivery network companies have a right to receive premium pay for work performed 26 during the COVID-19 emergency; and Template last revised December 2, 2019 1 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 WHEREAS, the City intends to make it clear that provision of premium pay should not result in 2 food delivery network companies reducing or otherwise modifying the areas in the City 3 served by the companies, reducing a gig worker’s compensation, limiting a gig worker’s 4 earning capacity, or adding charges to customers; and 5 WHEREAS, establishing premium pay standards for gig workers working during the COVID-19 6 emergency will increase retention of these gig workers and compensate them for the 7 hazards of working on the frontlines of a global pandemic; and 8 WHEREAS, the City is a leader on wage, labor, and workforce practices that improve workers’ 9 lives, support economic security, and contribute to a fair, healthy, and vibrant economy; 10 and 11 WHEREAS, establishing a labor standard that requires premium pay for gig workers working for 12 food delivery network companies is a subject of vital and imminent concern to the people 13 of this City and requires appropriate action by the City Council to establish this labor 14 standard for gig workers; NOW, THEREFORE, 15 BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS: 16 Section 1. The City Council (Council) finds and declares that: 17 A. In the exercise of The City of Seattle’s police powers, the City is granted authority to 18 19 pass regulations designed to protect and promote public, health, safety, and welfare. B. This ordinance protects and promotes public health, safety, and welfare during the new 20 coronavirus 19 (COVID-19) emergency by requiring food delivery network companies to 21 provide premium pay for gig workers performing work in Seattle, thereby increasing retention of 22 gig workers who provide essential services on the frontlines of a global pandemic and who Template last revised December 2, 2019 2 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 should be paid additional compensation for the hazards of working with significant exposure to 2 an infectious disease. 3 C. The World Health Organization (WHO) has declared that COVID-19 is a global 4 pandemic, which is particularly severe in high risk populations such as people with underlying 5 medical conditions and the elderly, and the WHO has raised the health emergency to the highest 6 level, requiring dramatic interventions to disrupt the spread of this disease. 7 D. On February 29, 2020, Washington Governor Jay Inslee proclaimed a state of 8 emergency in response to new cases of COVID-19, directing state agencies to use all resources 9 necessary to prepare for and respond to the outbreak. 10 E. On March 3, Mayor Jenny Durkan proclaimed a civil emergency in response to new 11 cases of COVID-19, authorizing the Mayor to exercise the emergency powers necessary to take 12 extraordinary measures to prevent death or injury of persons and to protect the public peace, 13 safety and welfare, and alleviate damage, loss, hardship or suffering. 14 F. On March 16, 2020, Washington Governor Jay Inslee and the Public Health – Seattle 15 & King County Local Health Officer issued parallel orders temporarily shutting down 16 restaurants, bars, and other entertainment and food establishments, except for take-out food. 17 G. On March 23, 2020, Washington Governor Jay Inslee issued a “Stay Home – Stay 18 Healthy” proclamation closing all non-essential workplaces, requiring people to stay home 19 except to participate in essential activities or to provide essential business services, and banning 20 all gatherings for social, spiritual, and recreational purposes through April 6, 2020. In addition to 21 healthcare, public health and emergency services, the “Stay Home – Stay Healthy” proclamation 22 identified delivery network companies and establishments selling groceries and prepared food Template last revised December 2, 2019 3 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 and beverages as essential business sectors critical to protecting the health and well-being of all 2 Washingtonians and designated their workers as essential critical infrastructure workers. 3 4 5 H. On April 2, 2020, Washington Governor Jay Inslee extended the “Stay Home – Stay Healthy” proclamation through May 4, 2020. I. On May 1, 2020, Washington Governor Jay Inslee extended the “Stay Home – Stay 6 Healthy” proclamation through May 31, 2020 in recognition that the worldwide COVID-19 7 pandemic and its progression in Washington State continue to threaten the life and health of our 8 people as well as the economy of Washington State, and remain a public disaster affecting life, 9 health, property or the public peace. 10 J. On May 4, 2020, Washington Governor Jay Inslee announced a “Safe Start” plan that 11 reopens Washington’s economy in phases and has restrictions on the seating capacity of 12 restaurants during three of the four phases and physical distancing for high-risk populations and 13 worksites during all four phases. 14 K. As of May 20, 2020, the World Health Organization Situation Report reported a 15 global total of 4,801,202 cases of COVID-19, including 318,935 deaths; the Washington State 16 Department of Health and Johns Hopkins University reported 18,811 cases of COVID-19, 17 including 1,031 deaths in Washington State; and Public Health – Seattle & King County reported 18 7,617 cases of COVID-19, including 530 deaths, in King County. 19 L. Food delivery network companies are essential businesses operating in Seattle during 20 the COVID-19 emergency and rely on business models that hire gig workers as independent 21 contractors, thereby creating barriers for gig workers to access employee protections established 22 by local, state, and federal law, and making gig workers highly vulnerable to economic 23 insecurity and health or safety risks. Template last revised December 2, 2019 4 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 M. Gig workers working for food delivery network companies are essential workers who 2 perform services that are fundamental to the economy and health of the community during the 3 COVID-19 crisis. They can work in high risk conditions with inconsistent access to protective 4 equipment and other safety measures; work in public situations with limited or no ability to 5 engage in physical distancing; and continually expose themselves and the public to the spread of 6 disease. 7 N. In the pursuit of economic opportunity, many gig workers are immigrants and people 8 of color who have taken on debt or invested their savings to purchase and/or lease vehicles or 9 other equipment to work for food delivery network companies. 10 O. Gig workers making deliveries for food delivery network companies are supporting 11 community efforts to engage in physical distancing and mitigate the spread of COVID-19 while 12 simultaneously exposing themselves to a higher risk of infection 13 P. Gig workers working for food delivery network companies bear the brunt of the time 14 and expenses necessary for cleaning and disinfecting equipment and engaging in other efforts to 15 protect themselves, customers, and the public from illness. 16 Q. Premium pay, paid in addition to regular wages, is an established type of 17 compensation for employees performing hazardous duty or work involving physical hardship 18 that can cause extreme physical discomfort and distress. 19 R. Gig workers working during the COVID-19 emergency merit additional compensation 20 because they are performing hazardous duty or work involving physical hardship that can cause 21 extreme physical discomfort and distress due to the significant risk of exposure to the COVID-19 22 virus. Gig workers have been working under these hazardous conditions for months. They are 23 working in these hazardous conditions now and will continue to face safety risks as the virus Template last revised December 2, 2019 5 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 presents an ongoing threat for an uncertain period, potentially resulting in subsequent waves of 2 infection. 3 S. The availability of food delivery services is fundamental to the health of the 4 community and is made possible during the COVID-19 emergency because gig workers are on 5 the frontlines of this devastating pandemic supporting public health, safety, and welfare by 6 making deliveries while working in hazardous situations. 7 T. Establishing an immediate requirement for food delivery network companies to 8 provide premium pay to gig workers protects public health, supports stable incomes, and 9 promotes job retention by ensuring that gig workers are compensated now and for the duration of 10 the public health emergency for the substantial risks, efforts, and expenses they are undertaking 11 to provide essential services in a safe and reliable manner during the COVID-19 emergency. 12 U. This ordinance is necessary in response to the COVID-19 public health emergency 13 because requiring food delivery network companies to provide premium pay to gig workers 14 compensates gig workers for the risks of working during a pandemic and the safety measures 15 they are undertaking to protect themselves, customers, and the public from catching or spreading 16 illness. The provision of premium pay also better ensures the retention of these essential workers 17 who are on the frontlines of this pandemic to provide essential services, who are needed 18 throughout the duration of the COVID-19 emergency, and who deserve fair and equitable 19 compensation for their work. 20 Section 2. As the substantive effects of this ordinance are not permanent, this ordinance is 21 not intended to be codified. Section numbers are for ease of reference within this ordinance, and 22 section and subsection references refer to numbers in this ordinance unless stated otherwise. 23 PREMIUM PAY FOR GIG WORKERS Template last revised December 2, 2019 6 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 100.005 Short title 2 This ordinance shall constitute the “Premium Pay for Gig Workers Ordinance” and may be cited 3 as such. 4 100.010 Definitions 5 For purposes of this ordinance: 6 “Adverse action” means reducing the compensation to a gig worker, garnishing 7 gratuities, temporarily or permanently denying or limiting access to work, incentives, or bonuses, 8 offering less desirable work, demoting, terminating, deactivating, putting a gig worker on hold 9 status, failing to rehire after a seasonal interruption of work, threatening, penalizing, retaliating, 10 engaging in unfair immigration-related practices, filing a false report with a government agency, 11 or otherwise discriminating against any person for any reason prohibited by Section 100.050. 12 “Adverse action” for a gig worker may involve any aspect of work, including compensation, 13 work hours, responsibilities, or other material change in the terms and conditions of work. 14 “Adverse action” also encompasses any action by the hiring entity or a person acting on the 15 hiring entity’s behalf that would dissuade a reasonable person from exercising any right afforded 16 by this ordinance. 17 “Agency” means the Office of Labor Standards and any division therein. 18 “Aggrieved party” means a gig worker or other person who suffers tangible or intangible 19 20 harm due to a hiring entity or other person's violation of this ordinance. “Application dispatch” means technology that allows customers to directly request 21 dispatch of gig workers for provision of delivery services and/or allows gig workers or hiring 22 entities to accept requests for services and payments for services via the internet using mobile 23 interfaces such as, but not limited to, smartphone and tablet applications. Template last revised December 2, 2019 7 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 “City” means The City of Seattle. 2 “Compensation” means the total payment owed to a gig worker by reason of working 3 for the hiring entity, including but not limited to hiring entity payments for providing services, 4 bonuses, and commissions, as well as tips earned from customers. 5 “Deactivation” means the blocking of a gig worker’s access to the hiring entity’s 6 platform, changing a gig worker’s status from eligible to provide delivery services to ineligible, 7 or other material restriction in access to the hiring entity’s platform that is effected by a hiring 8 entity. 9 10 11 “Director” means the Director of the Office of Labor Standards or the Director's designee. “Director rules” means: (1) rules the Director or Agency may promulgate pursuant to 12 subsection 100.060.B or 100.060.C; or (2) other rules that the Director identifies, by means of an 13 Agency Q&A, previously promulgated pursuant to authority in Seattle Municipal Code Title 14. 14 Rules the Director identifies by means of an Agency Q&A shall have the force and effect of law 15 and may be relied on by hiring entities, gig workers, and other parties to determine their rights 16 and responsibilities under this ordinance. 17 “Drop-off point” means the location of any delivery resulting from the online order. 18 “Eating and drinking establishment” means “eating and drinking establishment” as 19 defined in Seattle Municipal Code Section 23.84A.010. 20 “Food delivery network company” means an organization whether a corporation, 21 partnership, sole proprietor, or other form, operating in Seattle, that offers prearranged delivery 22 services for compensation using an online-enabled application or platform, such as an 23 application dispatch system, to connect customers with workers for delivery from one or more of Template last revised December 2, 2019 8 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 the following: (1) eating and drinking establishments, (2) food processing establishments, (3) 2 grocery stores, or (4) any facility supplying groceries or prepared food and beverages for an 3 online order. “Food delivery network company” includes any such entity or person acting 4 directly or indirectly in the interest of a food delivery network company in relation to the food 5 delivery network company worker. 6 “Food delivery network company worker” means a person affiliated with and accepting 7 an offer of prearranged delivery services for compensation from a food delivery network 8 company. For purposes of this ordinance, at any time that a food delivery network company 9 worker is logged into the worker platform, the worker is considered a food delivery network 10 11 company worker. “Food processing” means “food processing” as defined in Seattle Municipal Code 12 Section 23.84A.012. “Front pay” means the compensation the gig worker would earn or would 13 have earned if reinstated by the hiring entity. 14 “Gig worker” means a food delivery network company worker. 15 “Grocery store” means “grocery store” as defined in Seattle Municipal Code Section 16 23.84A.014. 17 “Hiring entity” means a food delivery network company. 18 “Hiring entity payment” means the amount owed to a gig worker by reason of working 19 for the hiring entity, including but not limited to payment for providing services, bonuses, and 20 commissions. 21 “Online order” means an order placed through an online-enabled application or 22 platform, such as an application dispatch system, provided by a hiring entity for delivery 23 services in Seattle. Template last revised December 2, 2019 9 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 “Operating in Seattle” means, with respect to a hiring entity, offering prearranged 2 delivery services for compensation using an online-enabled application or platform, such as an 3 application dispatch system, to any affiliated gig worker, where such services take place in 4 whole or part in Seattle. 5 “Pick-up point” means the location of any establishment accessed by the gig worker to 6 fulfill an online order, including but not limited to (1) eating and drinking establishments, (2) 7 food processing establishments, (3) grocery stores, or (4) any facility supplying groceries or 8 prepared food and beverages for an online order. 9 “Premium pay” means additional compensation owed to a gig worker that is separate 10 from hiring entity payments for providing services, bonuses, and commissions, as well as tips 11 earned from customers. 12 “Rate of inflation” means 100 percent of the annual average growth rate of the bi- 13 monthly Seattle-Tacoma-Bellevue Area Consumer Price Index for Urban Wage Earners and 14 Clerical Workers, termed CPI-W, for the 12-month period ending in August, provided that the 15 percentage increase shall not be less than zero. 16 17 18 “Respondent” means a hiring entity or any person who is alleged or found to have committed a violation of this ordinance. “Successor” means any person to whom a hiring entity quitting, selling out, exchanging, 19 or disposing of a business sells or otherwise conveys in bulk and not in the ordinary course of the 20 hiring entity’s business, a major part of the property, whether real or personal, tangible or 21 intangible, of the hiring entity’s business. For purposes of this definition, “person” means an 22 individual, receiver, administrator, executor, assignee, trustee in bankruptcy, trust, estate, firm, 23 corporation, business trust, partnership, limited liability partnership, company, joint stock Template last revised December 2, 2019 10 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 company, limited liability company, association, joint venture, or any other legal or commercial 2 entity. 3 4 “Tips” means a verifiable sum to be presented by a customer as a gift or gratuity in recognition of some service performed for the customer by the gig worker receiving the tip. 5 “Worker platform” means the worker-facing application dispatch system software or any 6 online-enabled application service, website, or system, used by a food delivery network worker, 7 that enables the prearrangement of delivery services for compensation. 8 “Work-related stop in Seattle” means time spent by a gig worker on a commercial stop in 9 Seattle that is related to the provision of delivery services associated with an online order, and 10 does not include stopping for refueling, stopping for a personal meal or errands, or time spent 11 in Seattle solely for the purpose of travelling through Seattle from a point of origin outside 12 Seattle to a destination outside Seattle with no commercial stops in Seattle. 13 “Written” or “writing” means a printed or printable communication in physical or 14 electronic format, including but not limited to a communication that is transmitted through email, 15 text message, or a computer or mobile system, or that is otherwise sent and maintained 16 electronically. 17 100.015 Gig worker coverage 18 For the purposes of this ordinance: 19 20 21 22 A. Covered gig workers are limited to those who perform work for a covered hiring entity, where the work is performed in whole or part in Seattle. B. Work performed “in Seattle” means work that includes a work-related stop in Seattle. 100.020 Hiring entity coverage Template last revised December 2, 2019 11 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 2 3 A. For the purposes of this ordinance, covered hiring entities are limited to those who hire 250 or more gig workers worldwide. B. To determine the number of gig workers hired for the current calendar year: 4 1. The calculation is based upon the average number per calendar week of gig 5 workers who worked for compensation during the preceding calendar year for any and all weeks 6 during which at least one gig worker worked for compensation. For hiring entities that did not 7 have any gig workers during the preceding calendar year, the number of gig workers hired for 8 the current calendar year is calculated based upon the average number per calendar week of gig 9 workers who worked for compensation during the first 90 calendar days of the current year in 10 which the hiring entity engaged in business. 11 12 2. All gig workers who worked for compensation shall be counted, including but not limited to: 13 a. Gig workers who are not covered by this ordinance; 14 b. Gig workers who worked in Seattle; and 15 c. Gig workers who worked outside Seattle. 16 C. Separate entities that form an integrated enterprise shall be considered a single hiring 17 entity under this ordinance. Separate entities will be considered an integrated enterprise and a 18 single hiring entity under this ordinance where a separate entity controls the operation of another 19 entity. The factors to consider in making this assessment include, but are not limited to: 20 1. Degree of interrelation between the operations of multiple entities; 21 2. Degree to which the entities share common management; 22 3. Centralized control of labor relations; and 23 4. Degree of common ownership or financial control over the entities. Template last revised December 2, 2019 12 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 100.025 Premium pay requirement 2 A. Hiring entities shall provide each gig worker with premium pay for each online order 3 that results in the gig worker making a work-related stop in Seattle. For each online order, hiring 4 entities shall provide the gig worker with premium pay in the following amounts: 5 1. $2.50 for one pick-up point or one drop-off point in Seattle; 6 2. $1.25 for each additional pick-up point in Seattle; and 7 3. $1.25 for each additional drop-off point in Seattle. 8 9 B. Hiring entities shall provide premium pay at the same time compensation is provided for the associated online order(s). 10 C. When providing premium pay, hiring entities shall include notification of online 11 orders that qualified for premium pay and itemize the premium pay separately from other 12 compensation. 13 14 D. Hiring entities shall provide the premium pay required by subsection 100.025.A for the duration of the civil emergency proclaimed by the Mayor on March 3, 2020. 15 E. If the City establishes a minimum compensation standard for gig workers, the Council 16 intends to consider eliminating the premium pay requirement for gig workers before the 17 termination of the civil emergency proclaimed by the Mayor on March 3, 2020. 18 100.027 Gig worker and consumer protections 19 20 A. No hiring entity shall, as a result of this ordinance going into effect, take any of the following actions: 21 22 23 1. Reduce or otherwise modify the areas of the City that are served by the hiring entity; 2. Reduce a gig worker’s compensation; or Template last revised December 2, 2019 13 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 2 3 4 3. Limit a gig worker’s earning capacity, including but not limited to restricting access to online orders. 4. Add customer charges to online orders for delivery of groceries. B. It shall be a violation of this Section 100.027 if this ordinance going into effect is a 5 motivating factor in a hiring entity’s decision to take any of the actions in subsection 100.027.A 6 unless the hiring entity can prove that its decision to take the action(s) would have happened in 7 the absence of this ordinance going into effect. 8 100.030 Notice of rights 9 A. Hiring entities shall provide each gig worker with a written notice of rights established 10 by this ordinance. The Agency may create and distribute a model notice of rights in English and 11 other languages. However, hiring entities are responsible for providing gig workers with the 12 notice of rights required by this subsection 100.030.A, in a form and manner sufficient to inform 13 gig workers of their rights under this ordinance, regardless of whether the Agency has created 14 and distributed a model notice of rights. The notice of rights shall provide information on: 15 1. The right to premium pay guaranteed by this ordinance; 16 2. The right to be protected from retaliation for exercising in good faith the rights 17 18 protected by this ordinance; and 3. The right to file a complaint with the Agency or bring a civil action for a 19 violation of the requirements of this ordinance, including a hiring entity’s denial of premium pay 20 as required by this ordinance and a hiring entity or other person's retaliation against a gig worker 21 or other person for asserting the right to premium pay or otherwise engaging in an activity 22 protected by this ordinance. Template last revised December 2, 2019 14 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 B. Hiring entities shall provide the notice of rights required by subsection 100.030.A in 2 an electronic format that is readily accessible to the gig worker. The notice of rights shall be 3 made available to the gig worker via smartphone application or online web portal, in English and 4 any language that the hiring entity knows or has reason to know is the primary language of the 5 gig worker(s). 6 100.040 Hiring entity records 7 8 9 10 11 A. Hiring entities shall retain records that document compliance with this ordinance for each gig worker. B. Hiring entities shall retain the records required by subsection 100.040.A for a period of three years. C. If a hiring entity fails to retain adequate records required under subsection 100.040.A, 12 there shall be a presumption, rebuttable by clear and convincing evidence, that the hiring entity 13 violated this ordinance for the periods and for each gig worker for whom records were not 14 retained. 15 100.050 Retaliation prohibited 16 17 18 A. No hiring entity or any other person shall interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right protected under this ordinance. B. No hiring entity or any other person shall take any adverse action against any person 19 because the person has exercised in good faith the rights protected under this ordinance. Such 20 rights include, but are not limited to, the right to make inquiries about the rights protected under 21 this ordinance; the right to inform others about their rights under this ordinance; the right to 22 inform the person's hiring entity, the person’s legal counsel, a union or similar organization, or 23 any other person about an alleged violation of this ordinance; the right to file an oral or written Template last revised December 2, 2019 15 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 complaint with the Agency or bring a civil action for an alleged violation of this ordinance; the 2 right to cooperate with the Agency in its investigations of this ordinance; the right to testify in a 3 proceeding under or related to this ordinance; the right to refuse to participate in an activity that 4 would result in a violation of city, state or federal law; and the right to oppose any policy, 5 practice, or act that is unlawful under this ordinance. 6 C. No hiring entity or any other person shall communicate to a person exercising rights 7 protected in this Section 100.050, directly or indirectly, the willingness to inform a government 8 worker that the person is not lawfully in the United States, or to report, or to make an implied or 9 express assertion of a willingness to report, suspected citizenship or immigration status of a gig 10 worker or family member of the gig worker to a federal, state, or local agency because the gig 11 worker has exercised a right under this ordinance. 12 D. It shall be a rebuttable presumption of retaliation if a hiring entity or any other person 13 takes an adverse action against a person within 90 days of the person's exercise of rights 14 protected in this Section 100.050. However, in the case of seasonal work that ended before the 15 close of the 90-day period, the presumption also applies if the hiring entity fails to rehire a 16 former gig worker at the next opportunity for work in the same position. The hiring entity may 17 rebut the presumption with clear and convincing evidence that the adverse action was taken for a 18 permissible purpose. 19 E. Proof of retaliation under this Section 100.050 shall be sufficient upon a showing that 20 a hiring entity or any other person has taken an adverse action against a person and the person's 21 exercise of rights protected in this Section 100.050 was a motivating factor in the adverse action, 22 unless the hiring entity can prove that the action would have been taken in the absence of such 23 protected activity. Template last revised December 2, 2019 16 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 2 F. The protections afforded under this Section 100.050 shall apply to any person who mistakenly but in good faith alleges violations of this ordinance. 3 G. A complaint or other communication by any person triggers the protections of this 4 Section 100.050 regardless of whether the complaint or communication is in writing or makes 5 explicit reference to this ordinance. 6 100.060 Enforcement power and duties 7 A. The Agency shall have the power to investigate violations of this ordinance and shall 8 have such powers and duties in the performance of these functions as are defined in this 9 ordinance and otherwise necessary and proper in the performance of the same and provided for 10 11 12 13 by law. B. The Agency is authorized to coordinate implementation and enforcement of this ordinance and may promulgate appropriate guidelines or rules for such purposes. C. The Director is authorized to promulgate rules consistent with this ordinance and 14 Chapter 3.02 of the Seattle Municipal Code. Any guidelines or rules promulgated by the Director 15 shall have the force and effect of law and may be relied on by hiring entities, gig workers, and 16 other parties to determine their rights and responsibilities under this ordinance. 17 100.070 Violation 18 The failure of any respondent to comply with any requirement imposed on the respondent under 19 this ordinance is a violation. 20 100.080 Investigation 21 A. The Agency shall have the power to investigate any violations of this ordinance by 22 any respondent. The Agency may initiate an investigation pursuant to Director rules, including 23 but not limited to situations when the Director has reason to believe that a violation has occurred Template last revised December 2, 2019 17 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 or will occur, or when circumstances show that violations are likely to occur within a class of 2 hiring entities or businesses because the workforce contains significant numbers of gig workers 3 who are vulnerable to violations of this ordinance or the workforce is unlikely to volunteer 4 information regarding such violations. An investigation may also be initiated through the receipt 5 by the Agency of a report or complaint filed by a gig worker or other person. 6 B. A gig worker or other person may report to the Agency any suspected violation of this 7 ordinance. The Agency shall encourage reporting pursuant to this Section 100.080 by taking the 8 following measures: 9 1. The Agency shall keep confidential, to the maximum extent permitted by 10 applicable laws, the name and other identifying information of the gig worker or person 11 reporting the violation. However, with the authorization of such person, the Agency may disclose 12 the gig worker’s or person's name and identifying information as necessary to enforce this 13 ordinance or for other appropriate purposes. 14 2. Hiring entities shall provide gig workers with written notice of an investigation. 15 Hiring entities shall provide the notice in a format that is readily accessible to gig workers. The 16 Agency shall create the notice in English and other languages. 17 3. The Agency may certify the eligibility of eligible persons for “U” Visas under 18 the provisions of 8 U.S.C. § 1184.p and 8 U.S.C. § 1101.a.15.U. This certification is subject to 19 applicable federal law and regulations, and Director rules. 20 C. The Agency's investigation shall commence within three years of the alleged violation. 21 To the extent permitted by law, the applicable statute of limitations for civil actions is tolled 22 during any investigation under this ordinance and any administrative enforcement proceeding 23 under this ordinance based upon the same facts. For purposes of this ordinance: Template last revised December 2, 2019 18 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 1. The Agency's investigation begins on the earlier date of when the Agency 2 receives a complaint from a person under this ordinance, or when the Agency provides notice to 3 the respondent that an investigation has commenced under this ordinance. 4 2. The Agency's investigation ends when the Agency issues a final order 5 concluding the matter and any appeals have been exhausted; the time to file any appeal has 6 expired; or the Agency notifies the respondent in writing that the investigation has been 7 otherwise resolved. 8 D. The Agency's investigation shall be conducted in an objective and impartial manner. 9 E. The Director may apply by affidavit or declaration in the form allowed under RCW 10 9A.72.085 to the Hearing Examiner for the issuance of subpoenas requiring a hiring entity to 11 produce the records required by Section 100.040, or for the attendance and testimony of 12 witnesses, or for the production of documents required to be retained under Section 100.040, or 13 any other document relevant to the issue of whether any gig worker or group of gig workers has 14 been or is afforded the proper amount of premium pay required by this ordinance and/or to 15 whether a hiring entity has violated any provision of this ordinance. The Hearing Examiner shall 16 conduct the review without hearing as soon as practicable and shall issue subpoenas upon a 17 showing that there is reason to believe that: a violation has occurred, a complaint has been filed 18 with the Agency, or that circumstances show that violations are likely to occur within a class of 19 businesses because the workforce contains significant numbers of gig workers who are 20 vulnerable to violations of this ordinance or the workforce is unlikely to volunteer information 21 regarding such violations. 22 F. A hiring entity that fails to comply with the terms of any subpoena issued under 23 subsection 100.080.E in an investigation by the Agency under this ordinance before the issuance Template last revised December 2, 2019 19 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 of a Director's Order issued pursuant to subsection 100.090.C may not use such records in any 2 appeal to challenge the correctness of any determination by the Agency of liability, damages 3 owed, or penalties assessed. 4 5 G. In addition to other remedies, the Director may refer any subpoena issued under subsection 100.080.E to the City Attorney to seek a court order to enforce any subpoena. 6 H. Where the Director has reason to believe that a violation has occurred, the Director 7 may order any appropriate temporary or interim relief to mitigate the violation or maintain the 8 status quo pending completion of a full investigation or hearing, including but not limited to a 9 deposit of funds or bond sufficient to satisfy a good-faith estimate of compensation, interest, 10 damages, and penalties due. A respondent may appeal any such order in accordance with Section 11 100.210. 12 100.090 Findings of fact and determination 13 A. Except when there is an agreed upon settlement, the Director shall issue a written 14 determination with findings of fact resulting from the investigation and statement of whether a 15 violation of this ordinance has or has not occurred based on a preponderance of the evidence 16 before the Director. 17 B. If the Director determines that there is no violation of this ordinance, the Director shall 18 issue a “Determination of No Violation” with notice of a gig worker or other person's right to 19 appeal the decision, pursuant to Director rules. 20 C. If the Director determines that a violation of this ordinance has occurred, the Director 21 shall issue a “Director's Order” that shall include a notice of violation identifying the violation or 22 violations. Template last revised December 2, 2019 20 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 1. The Director's Order shall state with specificity the amounts due under this 2 ordinance for each violation, including payment of unpaid compensation, liquidated damages, 3 civil penalties, penalties payable to aggrieved parties, fines, and interest pursuant to Section 4 100.200. 5 2. The Director's Order may specify that civil penalties and fines due to the 6 Agency can be mitigated for respondent's timely payment of remedy due to an aggrieved party 7 pursuant to subsection 100.200.A.4. 8 3. The Director’s Order may specify that civil penalties and fines are due to the 9 aggrieved party rather than due to the Agency pursuant to subsection 100.200.E or 100.200.F. 10 4. The Director's Order may direct the respondent to take such corrective action as 11 is necessary to comply with the requirements of this ordinance, including but not limited to 12 monitored compliance for a reasonable time period. 13 5. The Director's Order shall include notice of the respondent's right to appeal the 14 decision pursuant to Section 100.210. 15 100.200 Remedies 16 A. The payment of unpaid compensation, liquidated damages, civil penalties, penalties 17 payable to aggrieved parties, fines, and interest provided under this ordinance is cumulative and 18 is not intended to be exclusive of any other available remedies, penalties, fines, and procedures. 19 1. The amounts of all civil penalties, penalties payable to aggrieved parties, and 20 fines contained in this Section 100.200 shall be increased annually to reflect the rate of inflation 21 and calculated to the nearest cent on January 1 of each year thereafter. The Agency shall 22 determine the amounts and file a schedule of such amounts with the City Clerk. Template last revised December 2, 2019 21 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 2. If a violation is ongoing when the Agency receives a complaint or opens an 2 investigation, the Director may order payment of unpaid compensation plus interest that accrues 3 after receipt of the complaint or after the investigation opens and before the date of the Director’s 4 Order. 5 6 3. Interest shall accrue from the date the unpaid compensation was first due at 12 percent annum, or the maximum rate permitted under RCW 19.52.020. 7 4. If there is a remedy due to an aggrieved party, the Director may waive part or 8 all of the amount of civil penalties and fines due to the Agency based on timely payment of the 9 full remedy due to the aggrieved party. 10 a. The Director may waive the total amount of civil penalties and fines due 11 to the Agency if the Director determines that the respondent paid the full remedy due to the 12 aggrieved party within ten days of service of the Director’s Order. 13 b. The Director may waive half the amount of civil penalties and fines due 14 to the Agency if the Director determines that the respondent paid the full remedy due to the 15 aggrieved party within 15 days of service of the Director's Order. 16 c. The Director shall not waive any amount of civil penalties and fines due 17 to the Agency if the Director determines that the respondent has not paid the full remedy due to 18 the aggrieved party after 15 days of service of the Director's Order. 19 5. When determining the amount of liquidated damages, civil penalties, penalties 20 payable to aggrieved parties, and fines due under this Section 100.200 for a settlement agreement 21 or Director's Order, including but not limited to the mitigation of civil penalties and fines due to 22 the Agency for timely payment of remedy due to an aggrieved party under subsection 23 100.200.A.4, the Director shall consider: Template last revised December 2, 2019 22 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 2 a. The total amount of unpaid compensation, liquidated damages, penalties, fines, and interest due; 3 b. The nature and persistence of the violations; 4 c. The extent of the respondent's culpability; 5 d. The substantive or technical nature of the violations; 6 e. The size, revenue, and human resources capacity of the respondent; 7 f. The circumstances of each situation; 8 g. The amount of penalties in similar situations; and 9 h. Other factors pursuant to Director rules. 10 B. A respondent found to be in violation of this ordinance shall be liable for full payment 11 of unpaid compensation due plus interest in favor of the aggrieved party under the terms of this 12 ordinance and other equitable relief. If the precise amount of unpaid compensation cannot be 13 determined due to a respondent’s failure to produce records or if a respondent produces records 14 in a manner or form which makes timely determination of the amount of unpaid compensation 15 impracticable, the Director may designate a daily amount for unpaid compensation due to 16 aggrieved party. For any violation of this ordinance, the Director may assess liquidated damages 17 in an additional amount of up to twice the unpaid compensation. 18 C. A respondent found to be in violation of this ordinance for retaliation under Section 19 100.050 shall be subject to any appropriate relief at law or equity including, but not limited to 20 reinstatement of the aggrieved party, front pay in lieu of reinstatement with full payment of 21 unpaid compensation plus interest in favor of the aggrieved party under the terms of this 22 ordinance, and liquidated damages in an additional amount of up to twice the unpaid Template last revised December 2, 2019 23 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 compensation. The Director also shall order the imposition of a penalty payable to the aggrieved 2 party of up to $5,462.70. 3 D. A respondent found to be in violation of gig worker and consumer protections under 4 subsection 100.027.A.1 or 100.027.A.4 shall be subject to the penalties and fines established by 5 this Section 100.200; such penalties and fines shall be payable only to the Agency. The Director 6 is not authorized to assess unpaid compensation due under subsection 100.200.B or 100.200.C. 7 for violations of subsection 100.027.A.1 or 100.027.A.4. All remedies are available for 8 violations of subsection 100.027.A.2 or 100.027.A.3. 9 E. The Director is authorized to assess penalties and shall specify that at least 50 percent 10 of any penalty assessed pursuant to this subsection 100.200.E is payable to the aggrieved party 11 and the remaining penalty is payable to the Agency as a civil penalty. The Director may also 12 specify that the entire penalty is payable to the aggrieved party. 13 14 15 1. For a first violation of this ordinance, the Director may assess a penalty of up to $546.07 per aggrieved party. 2. For a second violation of this ordinance, the Director shall assess a penalty of 16 up to $1,092.13 per aggrieved party, or an amount equal to ten percent of the total amount of 17 unpaid compensation, whichever is greater. 18 3. For a third or any subsequent violation of this ordinance, the Director shall 19 assess a penalty of up to $5,462.70 per aggrieved party, or an amount equal to ten percent of the 20 total amount of unpaid compensation, whichever is greater. 21 4. The maximum penalty for a violation of this ordinance shall be $21,849.79 per 22 aggrieved party, or an amount equal to ten percent of the total amount of unpaid compensation, 23 whichever is greater. Template last revised December 2, 2019 24 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 5. For purposes of this Section 100.200, a violation is a second, third, or 2 subsequent violation if the respondent has been a party to one, two, or more than two settlement 3 agreements, respectively, stipulating that a violation has occurred; and/or one, two, or more than 4 two Director's Orders, respectively, have issued against the respondent in the ten years preceding 5 the date of the violation; otherwise, it is a first violation. 6 F. The Director is authorized to assess fines and may specify that the fines are due to the 7 aggrieved party rather than due to the Agency. The Director is authorized to assess fines as 8 follows: Violation Fine Failure to provide a gig worker with written notice of rights under subsection 100.030.A $546.07 per aggrieved party Failure to retain hiring entity records for three years under subsections 100.040.A and 100.040.B $546.07 per missing record Failure to comply with prohibitions against retaliation for exercising rights protected under Section 100.050 $1,092.13 per aggrieved party Failure to provide notice of investigation to gig workers under subsection 100.080.B.2 $546.07 Failure to post or distribute public notice of failure to comply with final $546.07 order under subsection 100.240.A.1 9 10 The maximum amount that may be imposed in fines in a one-year period for each type of 11 violation listed above is $5,462.70 unless a fine for retaliation is issued, in which case the 12 maximum amount is $21,849.79. 13 G. A respondent who willfully hinders, prevents, impedes, or interferes with the Director 14 or Hearing Examiner in the performance of their duties under this ordinance shall be subject to a 15 civil penalty of not less than $1,092.13 and not more than $5,462.70. Template last revised December 2, 2019 25 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 H. In addition to the unpaid compensation, penalties, fines, liquidated damages, and 2 interest, the Agency may assess against the respondent in favor of the City the reasonable costs 3 incurred in enforcing this ordinance, including but not limited to reasonable attorneys' fees. 4 I. A hiring entity that is the subject of a settlement agreement stipulating that a violation 5 has occurred shall count for debarment, or a final order for which all appeal rights have been 6 exhausted, shall not be permitted to bid, or have a bid considered, on any City contract until such 7 amounts due under the final order have been paid in full to the Director. If the hiring entity is the 8 subject of a final order two times or more within a five-year period, the hiring entity shall not be 9 allowed to bid on any City contract for two years. This subsection 100.200.I shall be construed to 10 provide grounds for debarment separate from, and in addition to, those contained in Seattle 11 Municipal Code Chapter 20.70 and shall not be governed by that chapter provided that nothing in 12 this subsection 100.200.I shall be construed to limit the application of Seattle Municipal Code 13 Chapter 20.70. The Director shall notify the Director of Finance and Administrative Services of 14 all hiring entities subject to debarment under this subsection 100.080.I. 15 100.210 Appeal period and failure to respond 16 17 18 A. A gig worker or other person who claims an injury as a result of an alleged violation of this ordinance may appeal the Determination of No Violation, pursuant to Director rules. B. A respondent may appeal the Director's Order, including all remedies issued pursuant 19 to Section 100.200, by requesting a contested hearing before the Hearing Examiner in writing 20 within 15 days of service of the Director's Order. If a respondent fails to appeal the Director's 21 Order within 15 days of service, the Director's Order shall be final. If the last day of the appeal 22 period so computed is a Saturday, Sunday, or federal or City holiday, the appeal period shall run 23 until 5 p.m. on the next business day. Template last revised December 2, 2019 26 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 2 100.220 Appeal procedure and failure to appear A. Contested hearings shall be conducted pursuant to the procedures for hearing 3 contested cases contained in Section 3.02.090 of the Seattle Municipal Code and the rules 4 adopted by the Hearing Examiner for hearing contested cases. The hearing shall be conducted de 5 novo and the Director shall have the burden of proving by a preponderance of the evidence that 6 the violation or violations occurred. Upon establishing such proof, the remedies and penalties 7 imposed by the Director shall be upheld unless it is shown that the Director abused discretion. 8 Failure to appear for a contested hearing shall result in an order being entered finding that the 9 respondent committed the violation stated in the Director's Order. For good cause shown and 10 upon terms the Hearing Examiner deems just, the Hearing Examiner may set aside an order 11 entered upon a failure to appear. 12 B. In all contested cases, the Hearing Examiner shall enter an order affirming, modifying 13 or reversing the Director's Order, consistent with Ordinance 126068. 14 100.230 Appeal from Hearing Examiner order 15 A. The respondent may obtain judicial review of the decision of the Hearing Examiner by 16 applying for a Writ of Review in the King County Superior Court within 30 days from the date 17 of the decision in accordance with the procedure set forth in chapter 7.16 RCW, other applicable 18 law, and court rules. 19 B. The decision of the Hearing Examiner shall be final and conclusive unless review is 20 sought in compliance with this Section 100.230. 21 100.240 Failure to comply with final order 22 A. If a respondent fails to comply within 30 days of service of any settlement agreement 23 with the Agency, or with any final order issued by the Director or the Hearing Examiner for which Template last revised December 2, 2019 27 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 all appeal rights have been exhausted, the Agency may pursue, but is not limited to, the following 2 measures to secure compliance: 3 4 5 1. The Director may require the respondent to post or distribute public notice of the respondent's failure to comply in a form and manner determined by the Agency. 2. The Director may refer the matter to a collection agency. The cost to the City 6 for the collection services will be assessed as costs, at the rate agreed to between the City and the 7 collection agency, and added to the amounts due. 8 9 3. The Director may refer the matter to the City Attorney for the filing of a civil action in King County Superior Court, the Seattle Municipal Court, or any other court of 10 competent jurisdiction to enforce such order or to collect amounts due. In the alternative, the 11 Director may seek to enforce a Director's Order or a final order of the Hearing Examiner under 12 Section 100.250. 13 4. The Director may request that the City's Department of Finance and 14 Administrative Services deny, suspend, refuse to renew, or revoke any business license held or 15 requested by the hiring entity or person until such time as the hiring entity complies with the 16 remedy as defined in the settlement agreement or final order. The City's Department of Finance 17 and Administrative Services shall have the authority to deny, refuse to renew, or revoke any 18 business license in accordance with this subsection 100.240.A.4. 19 B. No respondent that is the subject of a final order issued under this ordinance shall quit 20 business, sell out, exchange, convey, or otherwise dispose of the respondent's business or stock 21 of goods without first notifying the Agency and without first notifying the respondent's successor 22 of the amounts owed under the final order at least three business days before such transaction. At 23 the time the respondent quits business, or sells out, exchanges, or otherwise disposes of the Template last revised December 2, 2019 28 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 respondent's business or stock of goods, the full amount of the remedy, as defined in a final order 2 issued by the Director or the Hearing Examiner, shall become immediately due and payable. If 3 the amount due under the final order is not paid by respondent within ten days from the date of 4 such sale, exchange, conveyance, or disposal, the successor shall become liable for the payment 5 of the amount due, provided that the successor has actual knowledge of the order and the 6 amounts due or has prompt, reasonable, and effective means of accessing and verifying the fact 7 and amount of the order and the amounts due. The successor shall withhold from the purchase 8 price a sum sufficient to pay the amount of the full remedy. When the successor makes such 9 payment, that payment shall be deemed a payment upon the purchase price in the amount paid, 10 and if such payment is greater in amount than the purchase price the amount of the difference 11 shall become a debt due such successor from the hiring entity. 12 100.250 Debt owed The City of Seattle 13 A. All monetary amounts due under the Director's Order shall be a debt owed to the City 14 and may be collected in the same manner as any other debt in like amount, which remedy shall 15 be in addition to all other existing remedies, provided that amounts collected by the City for 16 unpaid compensation, liquidated damages, penalties payable to aggrieved parties, or front pay 17 shall be held in trust by the City for the aggrieved party and, once collected by the City, shall be 18 paid by the City to the aggrieved party. 19 B. If a respondent fails to appeal a Director's Order to the Hearing Examiner within the 20 time period set forth in subsection 100.210.B, the Director's Order shall be final, and the Director 21 may petition the Seattle Municipal Court, or any court of competent jurisdiction, to enforce the 22 Director's Order by entering judgment in favor of the City finding that the respondent has failed 23 to exhaust its administrative remedies and that all amounts and relief contained in the order are Template last revised December 2, 2019 29 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 due. The Director's Order shall constitute prima facie evidence that a violation occurred and shall 2 be admissible without further evidentiary foundation. Any certifications or declarations 3 authorized under RCW 9A.72.085 containing evidence that the respondent has failed to comply 4 with the order or any parts thereof, and is therefore in default, or that the respondent has failed to 5 appeal the Director's Order to the Hearing Examiner within the time period set forth in 6 subsection 100.210.B, and therefore has failed to exhaust the respondent's administrative 7 remedies, shall also be admissible without further evidentiary foundation. 8 9 C. If a respondent fails to obtain judicial review of an order of the Hearing Examiner within the time period set forth in subsection 100.230.A, the order of the Hearing Examiner shall 10 be final, and the Director may petition the Seattle Municipal Court to enforce the Director's 11 Order by entering judgment in favor of the City for all amounts and relief due under the order of 12 the Hearing Examiner. The order of the Hearing Examiner shall constitute conclusive evidence 13 that the violations contained therein occurred and shall be admissible without further evidentiary 14 foundation. Any certifications or declarations authorized under RCW 9A.72.085 containing 15 evidence that the respondent has failed to comply with the order or any parts thereof, and is 16 therefore in default, or that the respondent has failed to avail itself of judicial review in 17 accordance with subsection 100.230.A, shall also be admissible without further evidentiary 18 foundation. 19 D. In considering matters brought under subsections 100.250.B and 100.250.C, the 20 Municipal Court may include within its judgment all terms, conditions, and remedies contained 21 in the Director's Order or the order of the Hearing Examiner, whichever is applicable, that are 22 consistent with the provisions of this ordinance. 23 100.260 Private right of action Template last revised December 2, 2019 30 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 A. Any person or class of persons that suffers financial injury as a result of a violation of 2 this ordinance, or is the subject of prohibited retaliation under Section 100.050, may bring a civil 3 action in a court of competent jurisdiction against the hiring entity or other person violating this 4 ordinance and, upon prevailing, may be awarded reasonable attorney fees and costs and such 5 legal or equitable relief as may be appropriate to remedy the violation including, without 6 limitation: the payment of any unpaid compensation plus interest due to the person and 7 liquidated damages in an additional amount of up to twice the unpaid compensation; and a 8 penalty payable to any aggrieved party of up to $55,462.70 if the aggrieved party was subject to 9 prohibited retaliation. Interest shall accrue from the date the unpaid compensation was first due 10 at 12 percent per annum, or the maximum rate permitted under RCW 19.52.020. 11 B. For purposes of this Section 100.260, “person” includes any entity a member of which 12 has suffered financial injury or retaliation, or any other individual or entity acting on behalf of an 13 aggrieved party that has suffered financial injury or retaliation. 14 15 16 17 C. For purposes of determining membership within a class of persons entitled to bring an action under this Section 100.260, two or more gig workers are similarly situated if they: 1. Are or were hired for the same hiring entity or hiring entities, whether concurrently or otherwise, at some point during the applicable statute of limitations period, 18 2. Allege one or more violations that raise similar questions as to liability, and 19 3. Seek similar forms of relief. 20 21 22 D. For purposes of subsection 100.260.C, gig workers shall not be considered dissimilar solely because the gig workers’ 1. Claims seek damages that differ in amount, or Template last revised December 2, 2019 31 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 2. Job titles or other means of classifying gig workers differ in ways that are 2 unrelated to their claims. 3 100.270 Encouragement of more generous policies 4 A. Nothing in this ordinance shall be construed to discourage or prohibit a hiring entity 5 from the adoption or retention of premium pay policies more generous than the one required 6 herein. 7 B. Nothing in this ordinance shall be construed as diminishing the obligation of a hiring 8 entity to comply with any contract or other agreement providing more generous protections to a 9 gig worker than required by this ordinance. 10 100.280 Other legal requirements 11 This ordinance provides minimum requirements for premium pay while working for a hiring 12 entity during the COVID-19 emergency and shall not be construed to preempt, limit, or 13 otherwise affect the applicability of any other law, regulation, requirement, policy, or standard 14 that provides for higher premium pay, or that extends other protections to gig workers; and 15 nothing in this ordinance shall be interpreted or applied so as to create any power or duty in 16 conflict with federal or state law. Nor shall this ordinance be construed to preclude any person 17 aggrieved from seeking judicial review of any final administrative decision or order made under 18 this ordinance affecting such person. Nothing in this Section 100.280 shall be construed as 19 restricting a gig worker’s right to pursue any other remedies at law or equity for violation of their 20 rights. 21 100.290 Severability 22 The provisions of this ordinance are declared to be separate and severable. If any clause, 23 sentence, paragraph, subdivision, section, subsection, or portion of this ordinance, or the Template last revised December 2, 2019 32 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 application thereof to any hiring entity, gig worker, person, or circumstance, is held to be invalid, 2 it shall not affect the validity of the remainder of this ordinance, or the validity of its application 3 to other persons or circumstances. 4 Section 3. Section 3.02.125 of the Seattle Municipal Code, last amended by Ordinance 5 125948, is amended as follows: 6 3.02.125 Hearing Examiner filing fees 7 8 A. The filing fee for a case before the City Hearing Examiner is $85, with the following exceptions: Fee in dollars Basis for Case *** Paid Sick/Safe Leave Ordinance (Chapter 14.16) No fee Premium Pay for Gig Workers Ordinance (Introduced as Council Bill 119799) No fee Public Accommodations Ordinance (Chapter 14.06) No fee *** *** 9 10 Section 4. Subsection 6.208.020.A of the Seattle Municipal Code, which section was last 11 amended by Ordinance 125930, is amended as follows: 12 6.208.020 Denial, revocation of, or refusal to renew business license 13 A. In addition to any other powers and authority provided under this Title 6, the Director, 14 or the Director's designee, has the power and authority to deny, revoke, or refuse to renew any 15 business license issued under the provisions of this Chapter 6.208. The Director, or the Director's 16 designee, shall notify such applicant or licensee in writing by mail of the denial, revocation of, or 17 refusal to renew the license and on what grounds such a decision was based. The Director may 18 deny, revoke, or refuse to renew any license issued under this Chapter 6.208 on one or more of 19 the following grounds: Template last revised December 2, 2019 33 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 1. The license was procured by fraud or false representation of fact. 2 2. The licensee has failed to comply with any provisions of this Chapter 6.208. 3 3. The licensee has failed to comply with any provisions of Chapters 5.32, 5.35, 4 5.40, 5.45, 5.46, 5.48, 5.50, or 5.52. 5 6 4. The licensee is in default in any payment of any license fee or tax under Title 5 or Title 6. 7 8 5. The property at which the business is located has been determined by a court to be a chronic nuisance property as provided in Chapter 10.09. 9 10 6. The applicant or licensee has been convicted of theft under subsection 12A.08.060.A.4 within the last ten years. 11 7. The applicant or licensee is a person subject within the last ten years to a court 12 order entering final judgment for violations of chapters 49.46, 49.48, or 49.52 RCW, or 29 13 U.S.C. 206 or 29 U.S.C. 207, and the judgment was not satisfied within 30 days of the later of 14 either: 15 16 a. The expiration of the time for filing an appeal from the final judgment order under the court rules in effect at the time of the final judgment order; or 17 b. If a timely appeal is made, the date of the final resolution of that appeal 18 and any subsequent appeals resulting in final judicial affirmation of the findings of violations of 19 chapters 49.46, 49.48, or 49.52 RCW, or 29 U.S.C. 206 or 29 U.S.C. 207. 20 8. The applicant or licensee is a person subject within the last ten years to a final 21 and binding citation and notice of assessment from the Washington Department of Labor and 22 Industries for violations of chapters 49.46, 49.48, or 49.52 RCW, and the citation amount and Template last revised December 2, 2019 34 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 penalties assessed therewith were not satisfied within 30 days of the date the citation became 2 final and binding. 3 9. Pursuant to subsections 14.16.100.A.4, 14.17.075.A, 14.19.100.A.4, 4 14.20.080.A.4, 14.22.115.A.4, 14.23.115.A.4, 14.26.210.A.4, 14.27.210.A.4, 14.28.210.A.4, and 5 14.30.180.A.4, and subsection 100.240.A.4 of this ordinance, the applicant or licensee has failed 6 to comply, within 30 days of service of any settlement agreement, with any final order issued by 7 the Director of the Office of Labor Standards, or any final order issued by the Hearing Examiner 8 under Chapters 14.16, 14.17, 14.19, 14.20, 14.22, 14.23, 14.26, 14.27, 14.28, 14.29, and 14.30, 9 and this ordinance, for which all appeal rights have been exhausted, and the Director of the 10 Office of Labor Standards has requested that the Director deny, refuse to renew, or revoke any 11 business license held or requested by the applicant or licensee. The denial, refusal to renew, or 12 revocation shall remain in effect until such time as the violation(s) under Chapters 14.16, 14.17, 13 14.19, 14.20, 14.22, 14.23, 14.26, 14.27, 14.28, 14.29, and 14.30, and this ordinance are 14 remedied. 15 16 17 18 10. The business is one that requires an additional license under this Title 6 and the business does not hold that license. 11. The business has been determined under a separate enforcement process to be operating in violation of law. 19 20 *** Section 5. This ordinance shall be automatically repealed without subsequent Council 21 action three years after the termination of the civil emergency proclaimed by the Mayor on 22 March 3, 2020. Template last revised December 2, 2019 35 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 Section 6. Based on the findings of fact set forth in Section 1 of this ordinance, the 2 Council finds and declares that this ordinance is a public emergency ordinance, which shall take 3 effect immediately and is necessary for the protection of the public health, safety, and welfare. Template last revised December 2, 2019 36 Karina Bull LEG Premium Pay for Gig Workers ORD D5 1 Section 7. By reason of the findings set forth in Section 1, and the emergency that is 2 hereby declared to exist, this ordinance shall become effective immediately upon its passage by a 3 3/4 vote of the Council and its approval by the Mayor, as provided by Article 4, subsection 1.1 of 4 the Charter of the City. 5 Passed by a 3/4 vote of all the members of the City Council the ________ day of 6 _________________________, 2020, and signed by me in open session in authentication of its 7 passage this _____ day of _________________________, 2020. 8 ____________________________________ 9 President ____________ of the City Council 10 Approved by me this ________ day of _________________________, 2020. 11 ____________________________________ 12 Jenny A. Durkan, Mayor 13 Filed by me this ________ day of _________________________, 2020. 14 ____________________________________ 15 Monica Martinez Simmons, City Clerk 16 (Seal) Template last revised December 2, 2019 37 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers ORD D2 1 CITY OF SEATTLE 2 ORDINANCE __________________ 3 COUNCIL BILL __________________ 4 5 6 7 8 9 10 126122 119841 AN ORDINANCE relating to gig workers in Seattle; establishing labor standards requirements for premium pay for gig workers in Seattle; amending Sections 100.015, 100.027, and 100.200 of Ordinance 126094 to make technical corrections; declaring an emergency; and establishing an immediate effective date; all by a 3/4 vote of the City Council. WHEREAS, in June 2020, the City Council (Council) passed emergency legislation, Ordinance 11 126094 (Premium Pay for Gig Workers Ordinance), requiring food delivery network 12 companies to provide gig workers with premium pay for work performed in Seattle 13 during the new coronavirus 19 emergency; and 14 15 16 WHEREAS, the Premium Pay for Gig Workers Ordinance went into effect upon the Mayor’s signature on June 26, 2020; and WHEREAS, The City of Seattle is a leader on wage, labor, and workforce practices that improve 17 workers’ lives, support economic security, and contribute to a fair, healthy, and vibrant 18 economy; and 19 WHEREAS, amending the Premium Pay for Gig Workers Ordinance to make technical 20 corrections will support implementation and enforcement of the ordinance’s 21 requirements; and 22 23 24 WHEREAS, amending the Premium Pay for Gig Workers Ordinance requires appropriate action by the Council; NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS: 25 Section 1. The City Council (Council) finds and declares that: 26 A. In the exercise of The City of Seattle’s police powers, the City is granted authority to 27 pass regulations designed to protect and promote public health, safety, and welfare. Template last revised December 2, 2019 1 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers ORD D2 1 B. This ordinance protects and promotes public health, safety, and welfare during the new 2 coronavirus 19 (COVID-19) emergency by making technical amendments to the Premium Pay 3 for Gig Workers Ordinance that are consistent with the Council’s intention and that will support 4 implementation and enforcement of ordinance requirements. 5 C. The World Health Organization (WHO) has declared that COVID-19 is a global 6 pandemic, which is particularly severe in high risk populations such as people with underlying 7 medical conditions and the elderly, and the WHO has raised the health emergency to the highest 8 level, requiring dramatic interventions to disrupt the spread of this disease. 9 D. On February 29, 2020, Washington Governor Jay Inslee proclaimed a state of 10 emergency in response to new cases of COVID-19, directing state agencies to use all resources 11 necessary to prepare for and respond to the outbreak. 12 E. On March 3, Mayor Jenny Durkan proclaimed a civil emergency in response to new 13 cases of COVID-19, authorizing the Mayor to exercise the emergency powers necessary to take 14 extraordinary measures to prevent death or injury of persons and to protect the public peace, 15 safety and welfare, and alleviate damage, loss, hardship or suffering. 16 F. On March 16, 2020, Washington Governor Jay Inslee and the Public Health – Seattle 17 & King County Local Health Officer issued parallel orders temporarily shutting down 18 restaurants, bars, and other entertainment and food establishments, except for take-out food. 19 G. On March 23, 2020, Washington Governor Jay Inslee issued a “Stay Home – Stay 20 Healthy” proclamation closing all non-essential workplaces, requiring people to stay home 21 except to participate in essential activities or to provide essential business services, and banning 22 all gatherings for social, spiritual, and recreational purposes through April 6, 2020. In addition to 23 healthcare, public health and emergency services, the “Stay Home – Stay Healthy” proclamation Template last revised December 2, 2019 2 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers ORD D2 1 identified delivery network companies and establishments selling groceries and prepared food 2 and beverages as essential business sectors critical to protecting the health and well-being of all 3 Washingtonians and designated their workers as essential critical infrastructure workers. 4 5 6 H. On April 2, 2020, Washington Governor Jay Inslee extended the “Stay Home – Stay Healthy” proclamation through May 4, 2020. I. On May 1, 2020, Washington Governor Jay Inslee extended the “Stay Home – Stay 7 Healthy” proclamation through May 31, 2020 in recognition that the worldwide COVID-19 8 pandemic and its progression in Washington State continue to threaten the life and health of our 9 people as well as the economy of Washington State, and remain a public disaster affecting life, 10 11 health, property or the public peace. J. On May 4, 2020, Washington Governor Jay Inslee announced a “Safe Start” plan that 12 reopens Washington’s economy in phases and has restrictions on the seating capacity of 13 restaurants during three of the four phases and physical distancing for high-risk populations and 14 worksites during all four phases. 15 K. On June 19, 2020, Washington State Secretary of Health John Wiesman approved 16 King County to move to Phase 2 of the “Safe Start” plan. Under Phase 2, restaurants must 17 comply with health and safety requirements that include limiting guest occupancy to 50 percent 18 or less of the maximum building occupancy, limiting table size to five guests or fewer, and 19 prohibiting bar seating. 20 L. On July 23, Governor Jay Inslee and Washington State Secretary of Health John 21 Wiesman announced changes to the “Safe Start” plan to slow COVID-19 exposure, including a 22 new requirement that restaurants limit indoor parties to members of the same household. The 23 announcement also confirmed that takeaway remains available for small parties from different Template last revised December 2, 2019 3 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers ORD D2 1 households. 2 M. As of July 28, 2020, the WHO Situation Report reported a global total of 16,341,920 3 cases of COVID-19, including 650,805 deaths; the Washington State Department of Health and 4 Johns Hopkins University reported 53,321 cases of COVID-19, including 1,518 deaths in 5 Washington State; and Public Health – Seattle & King County reported 14,579 cases of COVID- 6 19, including 645 deaths, in King County. 7 N. In June 2020, the Council passed Ordinance 126094 (Premium Pay for Gig Workers 8 Ordinance), emergency legislation to support gig workers for the risks of working for food 9 delivery network companies during the COVID-19 emergency and for the costs of taking 10 11 preventative safety measures to protect themselves and others from spreading the virus. O. Effective June 26, 2020, the Premium Pay for Gig Workers Ordinance requires 12 covered food delivery network companies to provide premium pay to gig workers working in 13 Seattle for the duration of the civil emergency proclaimed by the Mayor on March 3, 2020. 14 P. The Premium Pay for Gig Workers Ordinance also establishes gig worker and 15 consumer protections. Food delivery service companies, as a result of the ordinance going into 16 effect, are prohibited from reducing areas of service in Seattle; reducing a gig worker’s 17 compensation; limiting a gig worker’s earning capacity; or adding customer charges for delivery 18 of groceries. 19 Q. The City’s Office of Labor Standards (OLS) implements and enforces the Premium 20 Pay for Gig Workers Ordinance. If OLS finds that a food service delivery network company 21 violated the ordinance, the Director can issue an order requiring payment of unpaid 22 compensation to the gig worker(s) and penalties payable to the City and the gig worker(s). Template last revised December 2, 2019 4 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers ORD D2 1 R. Food delivery network companies are essential businesses operating in Seattle during 2 the COVID-19 emergency and rely on business models that hire gig workers as independent 3 contractors, thereby creating barriers for gig workers to access employee protections established 4 by local, state, and federal law, and making gig workers highly vulnerable to economic 5 insecurity and health or safety risks. 6 S. Gig workers working for food delivery network companies are essential workers 7 performing services that are fundamental to the economy and health of the community during the 8 COVID-19 crisis. They can work in high risk conditions with inconsistent access to protective 9 equipment and other safety measures; work in public situations with limited or no ability to 10 engage in physical distancing; and continually expose themselves and the public to the spread of 11 disease. 12 T. In the pursuit of economic opportunity, many gig workers are immigrants and people 13 of color who have taken on debt or invested their savings to purchase and/or lease vehicles or 14 other equipment to work for food delivery network companies. 15 U. Gig workers making deliveries for food delivery network companies are supporting 16 community efforts to engage in physical distancing and mitigate the spread of COVID-19 while 17 simultaneously exposing themselves to a higher risk of infection. Gig workers also bear the brunt 18 of the time and expenses necessary for cleaning and disinfecting equipment and engaging in 19 other efforts to protect themselves, customers, and the public from illness. 20 V. Premium pay, paid in addition to regular wages, is an established type of 21 compensation for employees performing hazardous duty or work involving physical hardship 22 that can cause extreme physical discomfort and distress. Template last revised December 2, 2019 5 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers ORD D2 1 W. Gig workers working during the COVID-19 emergency merit additional 2 compensation because they are performing hazardous duty or work involving physical hardship 3 that can cause extreme physical discomfort and distress due to the significant risk of exposure to 4 the COVID-19 virus. Gig workers have been working under these hazardous conditions for 5 months. They are working in these hazardous conditions now and will continue to face safety 6 risks as the virus presents an ongoing threat for an uncertain period, potentially resulting in 7 subsequent waves of infection. 8 X. The availability of food delivery services is fundamental to the health of the 9 community and is made possible during the COVID-19 emergency because gig workers are on 10 the frontlines of this devastating pandemic supporting public health, safety, and welfare by 11 making deliveries while working in hazardous situations. 12 Y. Requiring food delivery network companies to provide premium pay to gig workers 13 protects public health, supports stable incomes, and promotes job retention by ensuring that gig 14 workers are compensated now and for the duration of the public health emergency for the 15 substantial risks, efforts, and expenses they are undertaking to provide essential services in a safe 16 and reliable manner during the COVID-19 emergency. 17 Z. This ordinance is immediately necessary in response to the COVID-19 public health 18 emergency because making technical amendments to the Premium Pay for Gig Workers 19 Ordinance will support implementation and enforcement of premium pay requirements that are 20 vital to the financial well-being of gig workers and public safety during a global pandemic. 21 Section 2. Section 100.015 of Ordinance 126094 is amended as follows: 22 100.015 Gig worker coverage 23 For the purposes of this ordinance: Template last revised December 2, 2019 6 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers ORD D2 1 2 A. Covered gig workers are limited to those who perform work for a covered hiring entity, where the work is performed in whole or part in Seattle. 3 B. Work performed “in Seattle” means work that includes a work-related stop in Seattle. 4 C. Gig workers who are employees under Seattle Municipal Code Chapter 14.20 for 5 covered hiring entities are not covered gig workers under this ordinance. Hiring entities must 6 pay all compensation owed to such gig workers in accordance with their obligations under 7 Seattle Municipal Code Chapter 14.20. 8 9 Section 3. Section 100.027 of Ordinance 126094 is amended as follows: 100.027 Gig worker and consumer protections 10 11 A. No hiring entity shall, as a result of this ordinance going into effect, take any of the following actions: 12 13 1. Reduce or otherwise modify the areas of the City that are served by the hiring entity; 14 2. Reduce a gig worker’s compensation; ((or)) 15 3. Limit a gig worker’s earning capacity, including but not limited to restricting 16 17 18 access to online orders((.)) ; or 4. Add customer charges to online orders for delivery of groceries. B. It shall be a violation of this Section 100.027 if this ordinance going into effect is a 19 motivating factor in a hiring entity’s decision to take any of the actions in subsection 100.027.A 20 unless the hiring entity can prove that its decision to take the action(s) would have happened in 21 the absence of this ordinance going into effect. 22 23 C. Hiring entities shall comply with the requirements in subsection 100.027.A for the duration of the civil emergency proclaimed by the Mayor on March 3, 2020. Template last revised December 2, 2019 7 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers ORD D2 1 2 Section 4. Section 100.200 of Ordinance 126094 is amended as follows: 100.200 Remedies 3 4 *** D. A respondent found to be in violation of gig worker and consumer protections under 5 subsection 100.027.A.1 or 100.027.A.4 shall be subject to the penalties and fines established by 6 this Section 100.200; such penalties and fines shall be payable only to the Agency. The Director 7 is not authorized to assess unpaid compensation due under subsection 100.200.B or 8 100.200.C((.)) for violations of subsection 100.027.A.1 or 100.027.A.4. All remedies are 9 available for violations of subsection 100.027.A.2 or 100.027.A.3. 10 E. The Director is authorized to assess penalties and shall specify that at least 50 percent 11 of any penalty assessed pursuant to this subsection 100.200.E is payable to the aggrieved party 12 and the remaining penalty is payable to the Agency as a civil penalty. The Director may also 13 specify that the entire penalty is payable to the aggrieved party. 14 15 16 1. For a first violation of this ordinance, the Director may assess a penalty of up to $546.07 per aggrieved party. 2. For a second violation of this ordinance, the Director shall assess a penalty of 17 up to $1,092.13 per aggrieved party, or an amount equal to ten percent of the total amount of 18 unpaid compensation, whichever is greater. 19 3. For a third or any subsequent violation of this ordinance, the Director shall 20 assess a penalty of up to $5,462.70 per aggrieved party, or an amount equal to ten percent of the 21 total amount of unpaid compensation, whichever is greater. Template last revised December 2, 2019 8 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers ORD D2 1 ((4. The maximum penalty for a violation of this ordinance shall be $21,849.79 2 per aggrieved party, or an amount equal to ten percent of the total amount of unpaid 3 compensation, whichever is greater.)) 4 ((5.)) 4. For purposes of this Section 100.200, a violation is a second, third, or 5 subsequent violation if the respondent has been a party to one, two, or more than two settlement 6 agreements, respectively, stipulating that a violation has occurred; and/or one, two, or more than 7 two Director's Orders, respectively, have issued against the respondent in the ten years preceding 8 the date of the violation; otherwise, it is a first violation. 9 Section 5. Based on the findings of fact set forth in Section 1 of this ordinance, the 10 Council finds and declares that this ordinance is a public emergency ordinance, which shall take 11 effect immediately and is necessary for the protection of public health, safety, and welfare. Template last revised December 2, 2019 9 Karina Bull LEG Technical Amendments to Premium Pay for Gig Workers 0RD D2 Section 6. By reason of the ?ndings set forth in Section 1, and the emergency that is hereby declared to exist, this ordinance shall become effective immediately upon its passage by a 3/4 vote of the Council and its approval by the Mayor, as provided by Article 4, subsection 1.1 of the Charter of the City. Passed by a 3/4 vote of all the members of the City Council the 10th day of 2020, and signed by me in open session in authentication of its passage this 10th day of 2020. President of the City Council August Approved by me this 14th day of 2020. 5&6 4.49m) Jenny A. Durkan, Mayor let August Filed by me this day of 2020. Monica Martinez Simmons, City Clerk (Seal) Temp/ate last revised December 2, 2019 1 0