Can States Grant Federal Antitrust Immunity? Part 1: Why California’s New Gig-Driver Law Won’t Survive Parker

In this post for Bona Law’s Antitrust Attorney blog, author Aaron Gott shares insights on California’s newly enacted AB 1340, a statute that allows app-based rideshare drivers in the state to unionize and bargain collectively. Supporters—including Governor Newsom—are touting it as a breakthrough for worker dignity and a solution where federal leadership has stalled. The legislation establishes a formal sector-wide bargaining system overseen by the Public Employment Relations Board, giving drivers the ability to elect representatives and negotiate with platforms like Uber and Lyft, while maintaining their independent-contractor status under Proposition 22.

Gott argues, however, that the law faces a fundamental legal obstacle: federal antitrust law. AB 1340, he explains, effectively creates a state-approved cartel of independent contractors—conduct that would normally violate Section 1 of the Sherman Act. The statute attempts to sidestep this through a claim that the state action immunity doctrine applies, but the author explains that precedent from Parker, Midcal, Phoebe Putney, and NC Dental makes clear that states cannot shield private collusion simply by declaring immunity. Moreover, the law’s structure appears to fail the requirement of active, substantive state supervision.

The post concludes that AB 1340 is likely to face serious constitutional challenges. Under long-standing doctrine, states may regulate markets directly, but they cannot delegate regulatory authority to private actors and then attempt to immunize their coordination from federal antitrust enforcement. If such a workaround were permissible, Gott notes, any state could legalize collusion by statute—undermining the Sherman Act and the principle that competition, not coordination among competitors, remains the default policy of the U.S. economy…

CONTINUE READING…