Republished in part from The National Law Review, March 17, 2022.
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The National Labor Relations Board (“NLRB” or “Board”) recently indicated an openness to revisiting the independent contractor standard employed by the Board when assessing whether individuals are covered under the National Labor Relations Act (“Act”).
Section 2(3) of the Act defines “Employee” and specifically excludes individuals having the status of an independent contractor from being an Employee within the meaning of the Act. The practical effect of this is an employer who employs independent contractors rather than “Employees” does not fall under the jurisdiction of the NLRB with respect to the independent contractors.
The Board applies common law agency principles when determining whether individuals are independent contractors and thus excluded from coverage of the Act. This framework has held true ever since the Supreme Court issued its decision in NLRB v. United Insurance Co. of America, 390 U.S. 254, 256 (1968). However, since the United Insurance decision, the Board has at times revisited the common-law factors to the independent contractor analysis and appears to be poised to do so yet again.
A change in the Board’s independent contractor standard could have widespread implications for employers and otherwise for businesses which heretofore did not necessarily consider themselves to be employers. Businesses should closely monitor what the Board does in The Atlanta Opera and be prepared to respond accordingly.
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