From Seyfarth Shaw LLP, Jennifer L.Mora and Paul H.Galligan discusses some changes that are expected from the National Labor Relations Board including changes to the standard for determining if workers are employees and protected by the National Labor Relations Act or independent contractors. Jennifer and Paul write:
Independent Contractor Standards
By way of background, the Act excludes independent contractors from statutory coverage. The Board has traditionally relied on common law agency principles to determine whether an individual is an employee or an independent contractor.
In 2014, the Obama Board refined this traditional test by creating a new factor to be considered in the analysis — whether the employer could prove that the putative contractor was providing services as part of an independent business — and viewed entrepreneurial opportunity as just one aspect of that factor. Further, the Board stated that only actual, rather than theoretical, entrepreneurial opportunity should weigh in favor of a finding that an individual has been properly classified as an independent contractor. The Board also found it important to evaluate whether the company could prevent the individual from engaging in entrepreneurial opportunities. Ultimately, this standard made it more difficult for an employer to prove that an individual was an independent contractor and, thus, excluded from the Act.
In 2019, however, the Trump Board in SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019), returned to the long-standing independent contractor standard, reaffirming its adherence to the traditional common-law agency test. This standard arguably makes it easier for an employer to classify workers as independent contractors.
In the notice, the Board invited parties and amici to submit briefs relating to the future of SuperShuttle DFW, Inc., whether to return to the 2014 standard, and whether some other standard should replace both. Notably, General Counsel Abruzzo’s memorandum also suggests that the simple act of misclassifying a worker as an independent contractor can be an unfair labor practice (although current Board law says otherwise).