San Francisco: Seattle’s first-in-the-nation ordinance allowing drivers-for-hire to collectively bargain is in jeopardy after an appeals court ruled it isn’t exempted from federal antitrust law.

The ruling is a boost to ride-hailing companies such as Uber Technologies Inc and Lyft Inc and the US Chamber of Commerce, which have attacked the ordinance.

Seattle “has a hard road ahead” if it wants to preserve the ordinance, said Charlotte Garden, a law professor at Seattle University who had urged the San Francisco-based appeals court to uphold the measure’s legality.

The three-judge panel concluded Washington state didn’t authorise the law specifically enough, and didn’t play a role in supervising the collective bargaining process. The panel agreed with a lower court’s ruling that the Seattle law isn’t pre-empted by the National Labour Relations Act.

While Garden called the outcome unfortunate, she said “the other potential path forward for the law would be for the state to pass legislation allowing collective bargaining by drivers.”

The Seattle ordinance is one of several avenues that labour groups have pursued to organise ride-share drivers, whose legal status as employees or contractors is hotly contested. On Wednesday, congressional Democrats introduced a bill that would broaden the definition of an employee under the National Labour Relations Act so that more workers in the gig economy would qualify for collective bargaining rights.

Uber and Lyft however hailed the ruling as a win for drivers.

“This positive development will maintain the flexibility of drivers to choose when, where and for how long they drive,” Lyft spokesman Adrian Durbin said.

Representatives of the Seattle city attorney’s office and the local Teamsters union said they are reviewing the ruling.