Corporate Counsel Daily, Seattle ordinance regulating deactivation of app-based workers survives challenge by Uber, Instacart, (Mar 5, 2026)

By Kathleen Kapusta, J.D.

The ordinance “is like any well-established anti-discrimination or workplace safety law: it requires private companies to conform their internal policies to minimum standards and to communicate those policies.”

Rejecting challenges by Uber and Instacart to a Seattle ordinance that prohibits “unwarranted deactivations” of some app-based worker accounts, a divided Ninth Circuit found the ordinance regulates non-expressive conduct, not speech subject to First Amendment protection. But even if it regulates speech, said the court, it is commercial speech and the ordinance overcomes the appropriate level of First Amendment scrutiny. Nor was the ordinance unconstitutionally vague because a person of ordinary intelligence would understand its meaning. Accordingly, the district court did not abuse its discretion when it declined to preliminarily enjoin the ordinance. Judge Bennett, dissenting in part, argued that the ordinance compels speech and is thus subject to the First Amendment (Uber Technologies, Inc. v. City of Seattle, Nos. 25-228 and 25-231 (9th Cir. Mar. 4, 2026)).

Enacted in 2023, the App-Based Worker Deactivation Rights Ordinance applies to “network companies” that provide a platform for customers to hire temporary workers, like delivery drivers, and prohibits “unwarranted deactivations” of the app-based workers’ accounts. It does not apply to certain categories of app-based workers like rideshare drivers.

Deactivation requirements. One section of the ordinance, titled “Deactivation requirements,” requires (1) that a network company “inform” any app-based worker “in writing” of the company’s deactivation policy and (2) that the deactivation policy be “reasonably related” to the company’s “safe and efficient operations.” The ordinance includes a list of eight examples of policies that are not reasonably related to safety and efficiency, including policies that would result in a deactivation “based solely on a quantitative metric derived from aggregate customer ratings” or “based on the results of a background check, consumer report, driver record, or record of traffic infractions, except in cases of egregious misconduct or where required by other applicable law.”

Seattle’s stated purpose in enacting the ordinance is to protect and promote public health, safety, and welfare. According to the city, network companies’ growing reliance on algorithms leads to “arbitrary evaluations and unwarranted deactivations.”

Lawsuit. Challenging the prohibition of certain provisions of the ordinance, and in particular the “Deactivation requirements” section, Uber filed a lawsuit, in which Instacart intervened. The companies argued that the ordinance compels speech in violation of the First Amendment and is unconstitutionally vague. The district court denied their motion for a preliminary injunction.

Conduct, not speech. On appeal, the companies argued that the ordinance’s notice requirement compels speech by forcing them to communicate their deactivation policies and decisions in writing and make them accessible to workers and the deactivation standards regulate that speech’s content by requiring the policies be “reasonably related” to “safe and efficient operations.” Disagreeing, the court found the ordinance regulates conduct—the unwarranted deactivation of worker accounts—not speech.

At its core, said the court, “the Ordinance regulates a business agreement between two parties: the network company and the worker who uses the company’s platform to obtain gigs. A business agreement between two parties is not conduct with a significant expressive element.” Noting that the ordinance’s goal is to keep app-based workers informed and employed while keeping the public safe, the court found nothing in its text suggesting an intent to restrict speech.

That the ordinance, as the companies argued, compels and dictates the content of a written communication does not transform a law regulating non-expressive activity into one that infringes speech. The companies, the court observed, can still voice displeasure with the ordinance, including by informing their workers that they disagree with its requirements and the city’s assessment of what is reasonably related to safe and efficient operations. “That is their right. But it is not their right to disregard a valid economic regulation that targets neither speech nor expressive conduct that is protected by the First Amendment.”

Because the ordinance governs non-expressive conduct, any burden on speech, said the court, is incidental.

Commercial speech. But even if the ordinance regulates speech, the court found it is commercial speech subject to lower First Amendment scrutiny. Pointing to its precedents establishing that hiring communications can be commercial speech, the court explained that the speech at issue here is a communication by a network company to temporary app-based workers about the proposed terms of engagement, including the standards for deactivation or termination of their accounts. “The Ordinance’s challenged provisions regulate how and when a platform may prevent a worker from accessing its service to seek employment,” the court observed.

Assuming the ordinance regulates commercial speech, the court explained that it would apply the test articulated in the Supreme Court’s 1985 Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio decision: “[T]he government may compel truthful disclosure in commercial speech as long as the compelled disclosure is reasonably related to a substantial governmental interest and involves purely factual and uncontroversial information that relates to the service or product provided.”

Finding the government unquestionably has a substantial interest in protecting the health and safety of workers, the court noted that the ordinance provision at issue requires network companies to inform workers of what situations might lead to account deactivation and resulting lost income, which is reasonably related to Seattle’s goals. This notice, said the court, is purely factual, concerns only the service provided, and is not unduly burdensome.

As to the requirement the deactivation policies be “reasonably related” to the companies’ “safe and efficient operations,” this, said the court, “regulates at most speech related to what Seattle has designated as unlawful activity: the unwarranted deactivations of worker accounts.” Thus, said the court, even if the ordinance regulates commercial speech, it is not an impermissible regulation of that speech.

Vagueness. Turning to the companies’ contention the ordinance is unconstitutionally vague, the court first rejected their argument the word “reasonable” in the deactivation provision does not supply adequate guidance. Not only is the term “‘reasonable’ a well-established standard that is widely employed in both statutory and common law,” the ordinance’s text supplements the term by delineating between what is and is not a permissible reason to deactivate an account.

Seattle, the court observed, passed the ordinance out of its concern that companies like Uber and Instacart relied on algorithms to deactivate accounts automatically. Further, the city believes that customer ratings are “highly likely” to be influenced by bias against workers of certain races and ethnicities. “For those reasons,” the court explained, “the Ordinance dictates that an account deactivation may not be based ‘solely’ on customer ratings.” However, deactivation based on more than that, such as including review of comments that accompany customer ratings, is not prohibited.

Because the ordinance provides fair notice to a person of ordinary intelligence as to what grounds for deactivation are reasonably related to safety and efficiency, the court found it was not unconstitutionally vague. Concluding that the companies are unlikely to succeed on the merits of their claim, the court found the district court did not abuse its discretion when it denied the preliminary injunction.

Partial dissent. While Judge Bennett agreed that the ordinance is not unconstitutionally vague, he argued that it compels speech and is subject to the First Amendment. The ordinance, he asserted, requires the companies to draft and provide workers with a written deactivation policy that defined what constitutes a violation that may result in deactivation and which must be reasonably related to the network company’s safe and efficient operations. “The drafting and publication of such a policy is speech.”

And while Judge Bennett also argued that the speech at issue is commercial speech to which the Zauderer standard applies, he would remand for the district court to consider “whether the law can be upheld as a valid disclosure requirement under Zauderer.” The companies, he contended, “at least raise a serious question on the merits as to whether the Ordinance satisfies the Zauderer standard.”

“Plaintiffs,” he asserted, “have at least raised a serious question going to the merits. In my view, therefore, the district court must consider all four Winter factors. And I believe that the district court must decide in the first instance whether the Ordinance survives Zauderer review.”

The case is Nos. 25-228 and 25-231.

Judge: Clifton, R.

Attorneys: David M. Zionts (Covington & Burling) and Robert J. Maguire (Davis Wright Tremaine) for Uber Technologies, Inc., and Portier, LLC. Alexander T. MacDonald (Littler Mendelson) for Maplebear Inc dba Instacart. Jessica L. Goldman (Summit Law Group) and Ghazal Sharifi, Seattle City Attorney’s Office, for City of Seattle.

Companies: Uber Technologies, Inc.; Portier, LLC; Maplebear, Inc.; Instacart; City of Seattle

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