March 04, 2026|Franchise Frontlines
March 4, 2026 | United States Court of Appeals for the Ninth Circuit | Published Opinion
Executive Summary
In a published decision, Judge Clifton of the Ninth Circuit affirmed the denial of a preliminary injunction sought by Uber Technologies, Inc. and related platform companies challenging a Seattle ordinance regulating the deactivation of app-based workers. The ordinance requires network companies to adopt written deactivation policies and ensure those policies are reasonably related to safe and efficient operations. Plaintiffs argued the ordinance impermissibly compelled speech and was unconstitutionally vague. The Ninth Circuit rejected those arguments, holding that the ordinance regulates non-expressive conduct rather than protected speech, and that any incidental speech is commercial in nature and subject to lower scrutiny. The court further held that the ordinance was not impermissibly vague.
Relevant Background
The City of Seattle enacted an ordinance designed to address concerns regarding the gig economy, specifically the perceived instability and unpredictability faced by app-based delivery workers. The ordinance prohibits “unwarranted deactivations” of workers’ accounts and requires companies operating such platforms to establish written policies governing when deactivation may occur.
Under the ordinance, companies must provide workers with written notice of their deactivation policies and ensure that those policies are reasonably related to safe and efficient operations. The ordinance also identifies examples of impermissible bases for deactivation, including reliance solely on customer ratings or certain background check information absent egregious misconduct.
Uber and Instacart challenged the ordinance, arguing that it compelled speech in violation of the First Amendment by requiring companies to articulate and communicate deactivation standards. They also argued that the ordinance was unconstitutionally vague, particularly with respect to the requirement that policies be “reasonably related” to safe and efficient operations.
The district court denied a preliminary injunction, and the Ninth Circuit affirmed.
Decision
The Ninth Circuit held that the ordinance regulates conduct, not speech. The court emphasized that the central focus of the law is the regulation of business practices—specifically, the deactivation of workers’ accounts—rather than the regulation of expressive activity. The requirement that companies adopt and communicate deactivation policies was viewed as incidental to that broader regulatory objective.
In reaching this conclusion, the court relied on established precedent recognizing that business relationships and agreements—such as those between companies and workers—do not inherently involve expressive conduct protected by the First Amendment. The court explained that the ordinance governs the terms under which companies may remove workers from their platforms, which is fundamentally an economic and operational decision rather than expressive activity.
The court further held that even if the ordinance were viewed as regulating speech, the speech at issue would constitute commercial speech. As such, it would be subject to a lower level of scrutiny. Applying that framework, the court concluded that the ordinance’s requirements were reasonably related to a substantial governmental interest in protecting worker health and safety and ensuring transparency in platform operations.
The court also rejected the argument that the ordinance compelled controversial or opinion-based speech. Instead, it characterized the required disclosures as factual and noncontroversial, noting that companies remain free to express disagreement with the ordinance while complying with its requirements.
Finally, the Ninth Circuit held that the ordinance was not impermissibly vague. The court found that the use of the term “reasonable” was consistent with longstanding legal standards and was sufficiently clarified by the ordinance’s accompanying provisions and examples.
Looking Forward
This decision provides a useful framework for understanding how courts may evaluate regulatory efforts directed at modern business models, particularly those involving distributed or platform-based systems. While the case arises in the context of the gig economy, its reasoning extends more broadly to how courts distinguish between regulation of conduct and regulation of speech.
For franchisors, the most relevant takeaway lies in the court’s treatment of internal policies and operational standards. The decision reinforces that requirements governing how a business structures and implements its operational rules—such as standards for termination, discipline, or performance—are generally treated as regulation of conduct, even where those rules must be documented and communicated. That distinction may limit the availability of constitutional challenges to regulatory frameworks that impose operational requirements on business systems.
At the same time, the opinion underscores that the compelled communication of policies, when tied to commercial relationships, will often be analyzed as commercial speech subject to a more permissive standard. Courts may therefore uphold requirements that businesses articulate and disclose internal policies, particularly where those requirements are framed as promoting transparency or protecting workers or consumers.
The decision also highlights a broader trend in which courts are increasingly willing to evaluate modern business structures—whether platform-based or otherwise—through traditional legal frameworks rather than creating new doctrinal categories. In that respect, the case aligns with other recent decisions addressing emerging issues by applying established principles to new operational models.
For franchisors, this reinforces the importance of viewing system standards, operational controls, and required disclosures through a compliance lens rather than assuming they may be insulated by constitutional protections. While the boundaries of permissible regulation will continue to evolve, this case illustrates that courts may be receptive to regulatory efforts that are framed as governing business conduct rather than expressive activity.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Partner at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
