NLRB Is Looking to Review (Again) Independent Contractors And Who is Covered

The Nationwide Labor Relations Board (“NLRB” or “Board”) just lately indicated an openness to revisiting the impartial contractor commonplace employed by the Board when assessing whether or not people are lined beneath the Nationwide Labor Relations Act (“Act”).

Part 2(3) of the Act defines “Employee” and particularly excludes people having the standing of an impartial contractor from being an Worker inside the that means of the Act.  The sensible impact of this is an employer who employs impartial contractors relatively than “Employees” doesn’t fall beneath the jurisdiction of the NLRB with respect to the impartial contractors.

The Board applies widespread legislation company rules when figuring out whether or not people are impartial contractors and thus excluded from protection of the Act.  This framework has held true ever because the Supreme Court docket issued its choice in NLRB v. United Insurance coverage Co. of America, 390 U.S. 254, 256 (1968). Nevertheless, because the United Insurance coverage choice, the Board has at occasions revisited the common-law components to the impartial contractor evaluation and seems to be poised to achieve this but once more.

On December 27, 2021, the Board issued a Discover and Invitation to File Briefs in The Atlanta Opera, Inc., 371 NLRB No. 45 (2021). In doing so, the Board particularly requested amici to submit briefs addressing whether or not the Board ought to proceed to apply the present impartial contractor commonplace as was set forth in SuperShuttle DFW, Inc., 367 NLRB No. 75. (2019). The Board additionally invited amici to handle whether or not the Board ought to as an alternative apply a previous impartial contractor commonplace, both in its entirety or with modifications, as was set forth in FedEx Residence Supply, 361 NLRB 610 (2014). Forty-two amicus briefs had been filed with the NLRB in response to its December 27, 2021 invitation. The amicus briefs offered a wide range of arguments to the Board starting from returning to FedEx Residence Supply, not departing from SuperShuttle DFW, or abandoning the Restatement (Second) of Company completely and adopting an entirely new impartial contractor commonplace. The USA Division of Justice submitted an amicus temporary on behalf of neither get together in regards to the potential antitrust implications of the Board using a too slim statutory definition of Worker beneath the Act, whether or not coming from impartial contractors making an attempt to unionize or companies misclassifying their employees as impartial contractors to achieve a aggressive benefit over rivals.

Whereas the Board has persistently utilized the standard non-exhaustive listing of things recognized within the Restatement (Second) of Company because the crux of its impartial contractor evaluation, the present dispute revolves across the significance that needs to be given to a putative impartial contractor’s entrepreneurial alternative for achieve or loss. Although this is not included as an element within the Restatement (Second) of Company, it is one thing the Board has historically thought-about when assessing impartial contractor standing and the Board lent better weight to entrepreneurial alternative in SuperShuttle DFW than it did in FedEx Residence Supply, with the impact being extra employees categorized as impartial contractors as opposed to Staff beneath the Act.

Primarily based on its December 27, 2021 invitation to file briefs, it appears probably the Board intends on returning to its commonplace in FedEx Residence Supply, both in its entirety or with some modifications. Nevertheless given the numerous variety of filed amicus briefs arguing for all kinds of outcomes, together with the Division of Justice’s said issues in regards to the antitrust implications, it is potential the Board will transcend what it indicated in its December 27, 2021 invitation to file briefs.

A change within the Board’s impartial contractor commonplace may have widespread implications for employers and in any other case for companies which heretofore didn’t essentially contemplate themselves to be employers. Companies ought to carefully monitor what the Board does in The Atlanta Opera and be ready to reply accordingly.

Stephen P. Kopstein additionally contributed to this text.

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