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Contractor or Employee? NLRB May Tackle Question With Rule (1)

Jan. 28, 2019, 6:17 PMUpdated: Jan. 28, 2019, 8:26 PM

The National Labor Relations Board may propose a new regulation to wade further into the murky territory between independent contractors and employees following a recent move in favor of businesses that treat workers as entrepreneurs, Chairman John Ring (R) told Bloomberg Law.

“It seems like it would be a good area where we could provide some clarity about how we see the law,” Ring said Jan. 28. “That’s the type of area where we could be able to clarify the law by using specific examples.”

The question of how workers should be classified—highlighted by litigation involving Uber Technologies Inc. drivers and other gig workers—is one of the most closely watched issues in labor and employment law and could have a sweeping impact on a wide range of workers and businesses. Contractors, unlike employees, aren’t generally entitled to wage-and-hour protections, workers’ compensation, unemployment insurance, and other benefits.

The board in a case involving airport SuperShuttle drivers in Texas recently made it easier for companies to classify workers as contractors. Ring’s comments mean that decision, which overturned an Obama-era standard, may not be the end of the board’s input on the issue.

“It’s basically narrowing the number of workers who are even eligible to unionize,” Jeffrey Hirsch, a University of North Carolina labor law professor and former NLRB attorney, told Bloomberg Law. “You’re whittling away the protected scope of the law.”

New Look at Old Legal Question

The NLRB in a 3-1 ruling said Dallas-Fort Worth Airport shuttle van drivers treated as individual franchise owners were properly classified as independent contractors rather than SuperShuttle employees. The board looked at various common-law factors meant to gauge control of the work, as well as the “entrepreneurial opportunity” that drivers have because they keep full control of their vehicles, retain all rider fares, and can work whenever they want.

Labor groups and worker advocates slammed the SuperShuttle decision as the latest move to peel back significant protections since Republicans took control of the NLRB last year. The board is working on a regulation that would limit the circumstances in which franchise and other related businesses are considered “joint employers” obligated to bargain with and responsible for unfair labor practices against a single group of workers. Earlier this month, the NLRB also narrowed its view of the types of worker activity on the job that are protected by federal labor law.

Ring doesn’t see it that way.

“This is not meant to be an assault on unions, it’s meant to be us explaining our view of the law,” the chairman said. “The clearer we can be, the better it is for everyone.”

‘Clarity and Predictability’

Ring in the interview reiterated his interest in using the rulemaking process to update federal labor law.

“I think codifying significant parts of our labor code into regulations is one way that we can provide some clarity and predictability,” Ring told a group of attorneys Jan. 28 at a conference in New York. “There’s the ability to take whole swaths of the law and put it into one comprehensive set of regulations.”

The board historically has answered legal questions through individual case decisions. Ring said regulations issued through the notice and public comment process bring some permanence because they’re harder for a new administration to undo. He also said the board can use rules to provide examples of how legal questions should be answered in various scenarios, rather than waiting for cases to reach the board one by one.

Ring cited limits on worker and union access to employer property as another area that could be the subject of new regulations.

But rulemaking is also a heavy lift for a small, independent agency that hasn’t often gone the regulatory route. Ring said he’s discussed the possibility of pooling regulatory staff among several smaller government agencies.

“We have great expertise in rulemaking, we just don’t have a lot of it,” Ring told Bloomberg Law.

Wilma Liebman, a Democrat who served as the NLRB’s chairwoman during part of the Obama administration, said using regulations to tackle big, ambiguous legal issues is particularly difficult. She also acknowledged that anything the board does won’t impact separate worker classification tests under federal wage and tax laws, as well as myriad state and local requirements.

“The notion that they’re going to clarify this issue that has been ambiguous for decades is laughable,” Liebman said.

(Updated to include additional information on rulemaking.)

To contact the reporter on this story: Chris Opfer in New York at

To contact the editors responsible for this story: Simon Nadel at; Terence Hyland at