NLRB Tightens Independent Contractor Standards

In the Trump Administration, the NLRB issued a ruling for determining whether a worker is an employee or an independent contractor.  In the 2019 ruling in Super Shuttle, the Trump-era NLRB indicated that entrepreneurial opportunity for gain or loss should be the "animating principle" of the independent contractor test.  In a decision issued on June 13, 2023, the NLRB overruled Super Shuttle and returned to an earlier standard that its independent contractor analysis will be guided by a list of common-law factors.  The Board further explained that entrepreneurial opportunity would be taken into account, along with the traditional common-law factors, as to whether the evidence tends to show that a supposed independent contractor is, in fact, rendering services as part of an independent business.  Atlanta Opera, Inc., No. 10-RC-276292.  The Board found in Atlanta Opera that the makeup artists, wig artists and hair stylists who work at the Atlanta Opera - who filed an election petition with the NLRB seeking union representation - are not independent contractors, excluded from the Act, but are rather covered employees.

The traditional common-law standard comes from a legal guide known as Restatement (Second) of Agency, and considers whether a worker is an independent contractor using a non-exhaustive list of nine factors, including the employer's control over the worker, the worker's skill, and whether their work is part of the employer's regular business.

Editor's Note: Although the current Atlanta Opera ruling is important, it does not dramatically change the common-law standard that has generally been followed over the years.  The ruling will bring about, however, more legal disputes over employment classification.  The case will be likely appealed to the federal courts of appeals, and the controversy will continue going forward.   Much of the history of litigation in this area is with delivery drivers like those of Federal Express and Uber. 

This article is part of our October 2023 Newsletter.

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