Labor Board Makes It Easier To Classify Workers As Independent Contractors

Author:Mr Steven Bernstein and Richard R. Meneghello
Profession:Fisher Phillips LLP

In a significant ruling which will benefit companies, the National Labor Relations Board today revised the test it uses for determining whether workers are employees or independent contractors by making it easier for entities to classify them as contractors (SuperShuttle DFW, Inc.). The decision throws a roadblock into unionization efforts involving such workers, as federal law does not permit independent contractors to unionize or join forces with employees in organizing efforts. What do employers need to know about this development?

Union Attempts To Organize Franchisee Drivers

SuperShuttle DFW is a franchise operation that uses the name, logo, color scheme, and other proprietary mechanisms of the SuperShuttle brand, transporting passengers to and from the airports in the Dallas-Fort Worth area. In 2005, upon converting to the franchise model, all drivers for the operation were required to sign agreements confirming they were independent contractor franchisees. They were then responsible for supplying their own shuttle vans and paying SuperShuttle DFW a weekly fee for the right to utilize the brand name and the dispatch/reservation system.

The workers had no set schedule and could choose the number of hours or days they worked per week. They could work as much—or as little—as they wanted, whenever they chose to do so. They were then entitled to collect all the money they earned for completing the assignments they selected. They were also permitted to hire their own relief drivers to operate their vans if they so chose.

The Amalgamated Transit Union sought to represent a unit of SuperShuttle DFW drivers, including those who signed an agreement to operate as independent contractor franchisees. Given the status of these workers, the company objected and contended that they should be precluded from organizing into a union due to their being independent contractors. The union cited to a 2014 Obama-era NLRB decision that "refined" the independent contractor test and made it easier for such workers to be classified as employees.

Today, the NLRB overturned that 2014 decision and returned to a more balanced standard, one that gives more of an equal weight to both the right-to-control aspects of the relationship and the role of the workers' entrepreneurship in operating their own businesses.

Labor Board Returns To More Accurate Standard

The 2014 decision did much more than "refine" the independent contractor test, according to today's majority...

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