Wednesday, June 14, 2023

NLRB decision shifts independent contractor analysis

Yesterday. the NLRB issued its decision in The Atlanta Opera, Inc. You know it's important when they also issue a press release

It is probably easiest to explain what the new test is not: "The Board expressly rejected the holding of the SuperShuttle Board that entrepreneurial opportunity for gain or loss should be the 'animating principle' of the independent-contractor test."

So, what is the test? I know what you're thinking... "Phil, pleeease tell me that it's a nonexhaustive list of ten factors!?" You know it! The decision marks a return to "longstanding principles" and "independent-contractor analysis will be guided by a list of common-law factors." Turning to the Restatement (Second) of Agency, the Board looked at:

[T]he following matters of fact, among others, are considered: 

(a) the extent of control which, by the agreement, the master may exercise over the details of the work; 

(b) whether or not the one employed is engaged in a distinct occupation or business; 

(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; 

(d) the skill required in the particular occupation; 

(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; 

(f) the length of time for which the person is employed; 

(g) the method of payment, whether by the time or by the job; 

(h) whether or not the work is a part of the regular business of the employer; 

(i) whether or not the parties believe they are creating the relation of master and servant; and 

(j) whether the principal is or is not in business.

Notably, the new decision not only overrules prior NLRB precedent, but also seems to depart from D.C. Circuit precedent (FedEx Home Delivery v. NLRB, 563 F.3d 492 (D.C. Cir. 2009) (FedEx I)). The Board purports to rely on Supreme Court and decisions and other D.C. Circuit decisions. Time will tell whether The Atlanta Opera standard will survive. 

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