(CN) - A Seattle ordinance banning tech companies from deactivating gig workers from their app without justification will remain in place, after the Ninth Circuit upheld a decision Wednesday to deny Uber and Instacart's motion for a preliminary injunction.

Passed in 2023, Seattle's "App-Based Worker Deactivation Rights" ordinance applies only companies with 250 gig workers or more, and only to delivery apps like Instacart and Uber Eats - it does not apply to Uber's ride-hail business. It bans companies from "arbitrary... and unwarranted deactivations," particularly those "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."

Each company must develop a set of criteria and a procedure for deactivating its workers, and it must inform its workers of that policy.

Uber sued in 2024, arguing the mandate to inform its workers of its deactivation policy amounted to compelled speech in violation of the First Amendment. It also said the ordinance was unconstitutionally vague. Maplebear, the parent company of the grocery delivery service Instacart, later joined the suit.

The companies asked for a preliminary injunction but were shot down by a federal judge the day before the rules were set to take effect. U.S. District Judge Marsha Pechman found the ordinance only "limits the grounds on which Uber may justify a termination," and any effect it had on speech to be merely "incidental to its worker-related conduct goals."

The two tech companies appealed. On Wednesday, a three-judge Ninth Circuit panel upheld Pechman's ruling.

"At its core, 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," wrote U.S. Circuit Judge Richard Clifton, a George W. Bush appointee, for the panel.

"The ordinance's goal is to keep app-based workers informed and employed while keeping the public safe. Nothing in the text of the ordinance suggests an intent to restrict speech."

As to the question of vagueness, Clifton was even more dismissive, writing, "The ordinance provides fair notice to a person of ordinary intelligence as to what grounds for deactivation are reasonably related to safety and efficiency. Plaintiffs may disagree with standards imposed by the ordinance or may wish for more unfettered discretion in terminating a worker or deactivating an account, but that does not make the regulation vague."

U.S. Circuit Judge Susan Graber, a Bill Clinton appointee, agreed, but Judge Mark Bennett, a Donald Trump appointee, dissented in part. He agreed the ordinance is not unconstitutionally vague but thought that the rule did amount to compelled speech.

Clifton had found that even if it was compelled speech, it was still commercial speech, and therefore permissible under the First Amendment. Bennett agreed the ordinance called for compelled commercial speech, but wrote, "Here, the district court found that the ordinance had no First Amendment implications, and I believe that to be error."

"At least one purpose of the ordinance is, therefore, to compel plaintiffs to share information about how app-based workers will be evaluated," Bennett wrote in his dissent. "Because disclosure of such information is speech subject to First Amendment scrutiny, the ordinance's stated purpose was, in part, to compel speech."

"The speech regulation requires more than a mere notice of rights," Bennett added. "The speech regulation instead requires plaintiffs to formulate and publish their opinions on what behaviors or standards are reasonably related to safety or to efficiency. These are not purely factual determinations but are instead plaintiffs' opinions. And they are likely to be controversial opinions. This is especially so because safety and efficiency are often in tension, and plaintiffs' policies will have to balance these two values."

Bennett said the plaintiffs had raised "serious questions" going to the merits of the ordinance, and wrote the dismissal should be vacated and remanded for consideration of the motion for preliminary injunction using a new analysis.

"Since the district court's decision, plaintiffs have issued deactivation policies in light of the ordinance," Bennett noted. "The district court has had no opportunity to consider how the issuance of these policies, and Seattle's response or lack thereof, has affected the equities or the existence of irreparable harm."

The case remains active and can proceed toward trial.

Source: Courthouse News Service