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NLRB Reconsidering Trump-Era Independent Contractor Test (1)

Dec. 27, 2021, 9:30 PMUpdated: Dec. 27, 2021, 10:45 PM

The National Labor Relations Board will reconsider its Trump-era legal test for determining whether a worker is an employee protected by federal labor law or an independent contractor who is not.

The NLRB on Monday invited public briefing on the issue. Unions, employers, and other interested parties have until Feb. 10 to weigh in on the NLRB potentially overruling its 2019 decision in SuperShuttle DFW, which made it easier for companies to prove that their workers are independent contractors.

The legal test for employment status is a crucial issue for gig economy companies and other businesses that rely on contract labor to avoid the costs associated with employing workers, which include providing job benefits and potentially negotiating with their unions.

Each labor and employment law has its own legal standard for determining employment status. A finding that a worker is an employee under one law doesn’t guarantee the same finding under another law.

The NLRB administers the National Labor Relations Act, which grants employees the right to form unions and act jointly to improve the workplace. The NLRA applies to the private sector and the U.S. Postal Service.

‘Compelling Reasons’?

The board’s opportunity to revisit the legal test for employment classification under the NLRA arises in a case involving makeup artists, wig artists, and hair stylists at the Atlanta Opera Inc. who are trying to unionize with an affiliate of the International Alliance of Theatrical Stage Employees.

The NLRB, which is controlled by a 3-2 Democratic majority, divided along partisan lines on the invitation for public input in the case. The two Republican members dissented, saying there’s no need to reconsider the SuperShuttle ruling, which was issued when Republicans controlled the board.

“We reject our dissenting colleagues’ position that it is inappropriate for the Board to reexamine its recent precedent in this important area of Federal labor law,” the Democratic members said. “The Board may grant a request for review when compelling reasons support the reconsideration of an important Board policy.”

The SuperShuttle decision gave employers a boost by emphasizing workers’ “entrepreneurial opportunity” for economic gain when determining their employment status. That factor had been severely limited by a 2014 ruling involving FedEx Corp., which was handed down by a Democratic-majority board during the Obama administration.

The NLRB on Monday asked for comment on whether it should keep the SuperShuttle test, return to the FedEx test, or replace it with something else.

Lawyers for the Atlanta Opera and the IATSE affiliate didn’t immediately respond to requests for comment.

The case is The Atlanta Opera, N.L.R.B., Case 10-RC-276292, invitation for briefs 12/27/21.

(Updated with additional reporting.)

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com

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