From JDSupra, Jane Waterman-Joyce discusses the decision by the National Labor Relations Board (NLRB) to return to a standard put forth in 2014 for determining if workers are employees or independent contractors and overrule a 2019 NLRB decision. Jane writes:
From noncompetes to “animal exuberance,” the current National Labor Relations Board (NLRB) seems determined to leave its mark on labor relations history. Its latest victim is SuperShuttle, the Trump-era decision that elevated “entrepreneurial opportunity” over other factors when classifying a worker as an employee or independent contractor. Today, the NLRB reinstated the previous independent contractor test established by FedEx Home Delivery, making SuperShuttle obsolete (for now) and expanding the potential for litigation as employers challenge employee classifications.
Although both tests use the same 10 factors, including the amount of control a company has over the worker, the skill required for the job, and how the worker is paid, the tests differ on the weight afforded to the entrepreneurial opportunity factor. Under FedEx, entrepreneurial opportunity is relevant butrequires evidence that these opportunities resulted in a worker conducting independent business activities for the factor to weigh on the side of independent contractor status. SuperShuttle did not require this additional evidence, providing additional clarity regarding independent contractor or employee status to employers (and workers) as they navigate the working relationship.
Although this led to workers winning more classification battles under SuperShuttle, it also cut down on the number of legal disputes employers litigated. A return to FedEx’s looser standard will almost assuredly cause employers’ legal bills to rise as they must now make more substantial arguments over employment classification. The loss of a clear rule on employment classification only creates more confusion for employers and additional paths to unionization for workers who may not have been able to unionize under SuperShuttle.
With the new NLRB’s tendency to charge employers over even the slightest disputes, it is more important than ever that employers utilize counsel experienced in traditional labor law to help navigate the morass that is the Biden-era NLRB’s take on the law.