A recent legal battle between major gig economy companies and the city of Seattle has intensified as Instacart and Uber filed an appeal on Monday challenging a new municipal ordinance governing how app-based platforms can terminate their workers.

The appeal follows a December lawsuit in which Uber initially contested the App-Based Worker Deactivation Rights Ordinance, with Instacart subsequently joining the legal challenge. The companies are contesting the law, which took effect on January 1, 2025, arguing that it infringes upon their First Amendment rights and contains
unconstitutionally vague provisions.

This legal action comes after U.S. District Judge Marsha Pechman denied the companies’ request for an injunction to halt the law’s implementation on December 31. In her ruling, Judge Pechman dismissed the platforms’ constitutional arguments, determining that the ordinance primarily regulates business conduct rather than speech, with any impact on expression being secondary.

The contested legislation, which received approval from the Seattle City Council in August 2023 and was signed by Mayor Bruce Harrell, establishes new protections for delivery workers and other app-based service providers. Under its provisions, companies must provide workers with a two-week notice before deactivation, establish reasonable policies for termination decisions, ensure human oversight of all deactivations, and supply workers with documentation supporting these decisions.

Instacart has expressed strong opposition to the ordinance, releasing a statement that characterizes it as “incredibly flawed” and arguing that allowing the law to proceed puts both the company and its customers at risk. The legislation specifically excludes passenger transport drivers, who are already protected under existing Washington state regulations.

This dispute represents the latest in a series of confrontations between gig economy platforms and Seattle lawmakers. The city has implemented several worker protection measures in recent years, including a separate controversy last year involving Instacart, Uber, and DoorDash over minimum wage requirements for food delivery drivers.

The ordinance aims to provide greater job security for app-based workers who perform various services, from food delivery to grocery shopping. The city’s approach reflects a growing trend of municipal governments attempting to regulate the gig economy and provide additional protections for workers who have traditionally been classified as independent contractors.

The companies’ appeal signals their continued resistance to local regulatory efforts that they view as potentially harmful to their business models. The legal challenge focuses particularly on constitutional grounds, though Judge Pechman’s initial ruling found that the ordinance’s primary purpose of protecting workers from unjustified terminations did not place unconstitutional burdens on the platforms.

This ongoing legal dispute highlights the complex relationship between technology platforms and local governments as cities like Seattle attempt to establish frameworks for governing the rapidly evolving gig economy sector. The outcome of this appeal could have significant implications for how cities can regulate app-based work arrangements and the extent to which local governments can impose worker protection requirements on digital platforms.

The Seattle ordinance represents one of the most comprehensive attempts by a U.S. city to regulate the worker deactivation process in the gig economy, making this legal challenge particularly significant for other municipalities considering similar legislation. As the appeal moves forward, both the technology platforms and worker advocates will be closely monitoring its progress, as it could set important precedents for future regulation of the gig economy workforce.