Ninth Circuit Upholds Seattle’s App-Based Worker Deactivation Rights Ordinance

The rapid growth of the gig economy has prompted U.S. cities to consider how existing labor protections apply to app-based workers who can be removed from a platform, or “deactivated,” without notice or explanation. (Helen McFarland, Seyfarth Shaw LLP). Seattle moved to address that gap directly. Id. In August 2023, the Seattle City Council passed Ordinance 126878, the App-Based Worker Deactivation Rights Ordinance (the “Ordinance”), which took effect on January 1, 2025. (Seattle City Council, Ordinance 126878). Uber Technologies, Inc. (“Uber”) and Maplebear, Inc. d/b/a Instacart (“Instacart”), sued to block the Ordinance on First Amendment grounds, but on March 4, 2026, a divided Ninth Circuit panel rejected the companies’ appeal of a denied preliminary injunction. (Rachel Riley, Law360). This post examines what the Ordinance requires, the companies’ constitutional arguments, and the implications of this decision for Seattle and gig economy regulation nationwide.

The Ordinance is the third in a series of Seattle labor protections for app-based workers, building on earlier ordinances establishing minimum pay and paid sick time. (Seattle.gov). The Ordinance applies to network companies (companies that use a digital network or platform to connect customers with app-based workers) with “250 or more app-based workers worldwide,” covering platforms such as Uber Eats and Instacart but excluding Uber’s ride-hail business, which Washington state law governs separately. (Rachel Riley, Law360). As used in the Ordinance, “deactivation” refers to the removal of a worker’s access to the platform. App-based companies have increasingly relied on algorithmic systems to manage and remove workers, often triggering deactivations based on automated flags such as low customer ratings, complaint patterns, or suspected fraud — without human review, stated reasons, or any opportunity to respond. A delivery worker could lose their livelihood overnight based on a single disputed customer complaint, with no way to challenge the decision. (Seattle City Council, Ordinance 126878). The Ordinance requires covered companies to: (i) publish a written deactivation policy “reasonably related” to “safe and efficient operations”; (ii) refrain from deactivating workers solely based on aggregate customer ratings or background checks absent egregious misconduct; and (iii) provide workers with 14 days’ advance written notice of deactivation, including the specific policy violation at issue. (Helen M. McFarland, Seyfarth Shaw LLP). The Ordinance requires covered companies to establish an internal challenge process, and workers who believe a deactivation is unwarranted may use it; if unsatisfied, they may bring a private lawsuit. (Seattle Office of Labor Standards). Together, these requirements address a central concern driving the Ordinance’s passage: prior to its enactment, algorithmic deactivations left workers with no meaningful recourse, and as counsel for Seattle argued before the Ninth Circuit, with “no human beings in the process.” (Monique Merrill, Courthouse News).

Faced with these new obligations, Uber and Instacart moved quickly to challenge the Ordinance on constitutional grounds, each with a direct operational stake. (Jay Brown, The Center Square). Uber contended the Ordinance would force it to retain couriers it considered problematic for longer periods, thereby degrading order quality and creating safety risks for customers. Id. Instacart raised two distinct objections: the Ordinance contradicted its own safety and efficiency protocols and, separately, created data disclosure and worker privacy risks. Id. Uber filed suit on December 19, 2024, and Instacart joined four days later. (Greg Lamm, Law360). U.S. District Judge Marsha J. Pechman denied the companies’ motion for a temporary restraining order (“TRO”) on December 31, 2024, finding the Ordinance “does little more than regulate conduct without any significant impact on speech or expression.” (Monique Merrill, Courthouse News). The companies then appealed the denial. Id. Before both courts, the companies advanced two First Amendment theories rooted in the Ordinance’s disclosure requirements. (Uber Tech., Inc. v. City of Seattle). First, they argued the notice requirement compelled speech by forcing disclosure of deactivation policies in writing. Id. Second, the “reasonably related” standard regulated the content of that speech. Id. The companies also raised a Fourteenth Amendment vagueness challenge, arguing the phrase “reasonably related to safe and efficient operations” was too indefinite to provide fair notice. Id. Ultimately, neither argument persuaded the court. Id.

On March 4, 2026, writing for the majority, Judge Richard R. Clifton, joined by Judge Susan Graber, held the Ordinance regulates business conduct, not speech, noting “[a]t its core, the ordinance regulates a business agreement between two parties,” and “[a] business agreement between two parties is not conduct with a significant expressive element.” (Uber Tech., Inc. v. City of Seattle). The majority analogized the Ordinance to anti-discrimination laws that incidentally burden speech while legitimately regulating business conduct. Id. Alternatively, the majority held even if the Ordinance compelled speech, the Ordinance regulated commercial speech subject to a more permissive constitutional standard the Ordinance easily satisfied. (Rachel Riley, Law360). The panel unanimously rejected the vagueness challenge. Id. Judge Mark Bennett dissented in part, agreeing on vagueness but concluding the district court erred in finding the Ordinance raised no First Amendment concerns at all, because the Ordinance’s stated purpose was at least in part to compel disclosure of deactivation policies. (Hillel Aron, Courthouse News). While the TRO appeal was denied, the case remains active and may proceed to trial on the merits, leaving open the possibility of further appellate review. Id.

The ruling carries significant implications both in Seattle and for gig economy regulation more broadly. (Uber Tech., Inc. v. City of Seattle). In Seattle, the Ordinance for now remains in effect, requiring covered companies to maintain compliant deactivation policies, provide workers with 14 days’ advance notice, and potentially face private lawsuits from workers who believe a deactivation was unwarranted. (Seattle Office of Labor Standards). Beyond Seattle, the majority’s reasoning that workplace disclosure mandates are a “modern version of established workplace disclosure laws” not subject to First Amendment scrutiny provides a constitutional roadmap for other cities and states to pass similar regulations. (Uber Tech., Inc. v. City of Seattle). For example, New York City enacted comparable deactivation protections in December 2025. Under Int. 1332, covered platforms may only deactivate food delivery workers for just cause or bona fide economic reasons, must provide written notice with a stated reason, must give workers 14 days' advance notice in most cases, and must offer an appeals process culminating in independent arbitration through the Department of Consumer and Worker Protection. (NYC Council, Int. 1332; NYC DCWP, Delivery Worker Laws: FAQs). This framework closely mirrors the Ordinance, though it is narrower in scope, applying only to food delivery workers rather than the full range of app-based workers Seattle's Ordinance covers. (NYC DCWP, Delivery Worker Laws: FAQs). The decision also takes on added significance given the Trump Administration’s May 2025 announcement it would not enforce a Biden-era rule aimed at reclassifying gig workers as employees. (Mike Rahmn & Matthew Iverson, Nelson Mullins). As federal protections for gig workers recede, the Ninth Circuit’s decision signals municipalities remain constitutionally empowered to step in. (Uber Tech., Inc. v. City of Seattle).

The Ninth Circuit’s decision in Uber Tech., Inc. v. City of Seattle resolves a key question for municipal gig economy regulation within the Ninth Circuit’s nine-state jurisdiction; cities may require app-based platforms to disclose and justify the platforms’ deactivation policies without running afoul of the First Amendment. (Uber Tech., Inc. v. City of Seattle). As binding precedent only within the Ninth Circuit, the decision does not compel the same result in other jurisdictions, but its reasoning may prove persuasive to courts and legislators elsewhere. The majority’s conduct-not-speech framework and alternative commercial speech holding give local governments a durable constitutional foundation on which to build. Judge Bennett’s partial dissent signals the First Amendment questions remain unsettled, and further litigation on the merits could yet refine the boundaries of permissible regulation. Id. For now, however, the decision represents a meaningful check on algorithmic employment practices, and, as federal gig worker protections continue to erode, an important signal that the regulatory future of the gig economy may increasingly originate at the local level.