Ride-hailing apps are surging in popularity, but the legal status of drivers who earn a living from them remains unresolved. Companies like Uber and Lyft contend that, because drivers are independent contractors and not employees under the U.S.'s various labor and employment laws, any attempt to form unions or bargain collectively for higher wages violates antitrust laws.

Until now, that assumption has been widely shared — but it's based on a failure to understand why concerted activity by workers is protected against antitrust liability. Labor's antitrust shield was established by the 1914 Clayton Act, in which Congress determined that "the labor of a human being is not an article in commerce." A two-year-old Seattle ordinance, now in federal litigation, provides an opportunity for courts to extend these century-old labor rights to workers in the digital economy.

Conventionally, only workers defined as "employees" are viewed as having the right to organize without violating antitrust laws. Individuals are considered employees only if their boss can control when and how they do their work — what is called the common law's "right to control" test.