The National Labor Relations Board (NLRB) has issued a decision that many observers believe further complicates life for independent contractors, including those in trucking.
In The Atlanta Opera, Inc. decision, the NLRB classifies theatrical production make-up artists and hair stylists as employees, allowing them to join a union. Federal law prohibits independent contractors from organizing or joining a union.
Founded in 1935, the NLRB is an independent federal agency protecting employees from unfair labor practices. In that capacity, the NLRB conducts hundreds of workplace elections each year.
The Atlanta Opera decision stands out because the NLRB majority specifically overruled a past panel decision. Until now past NRLB decisions held that the entrepreneurial opportunity for profit or loss should be the “animating principle” of the independent contractor test. The fact that workers stood to make or lose money by offering their services was just one factor in judging whether the workers were independent contractors and was not the “lens” through which all factors were viewed.
The new NLRB decision establishes three major “tests” each with differing factors, to determine independent contractor status:
Test #1
Assembly Bill 5 (AB5 in California), signed into law in 2019, sets out the “ABC” three-prong test:
A. The employer does not control or direct what the worker does, either by contract or in actual practice;
B. The worker performs tasks outside of the hiring entity’s usual course of business; and
C. The worker is engaged in an independently established trade, occupation, or business.
Many consider Prong B as the death knell for owner-operators leasing on to a motor carrier. Two major lawsuits are challenging AB5, one by the California Trucking Association together with the Owner-Operator Independent Drivers Association, and the other by “gig workers.”
Test #2
The U.S. Department of Labor (DOL) meanwhile is proposing a new federal test of independent contractors. Instead of the three factors found in AB5, the DOL lists six factors, each of equal weight.
The DOL plan specifically rejects the independent contractor’s opportunity for profit or loss – the “entrepreneurial opportunity” that the NLRB decision retained as a factor when determining status. Notably, the DOL proposes to consider worker compliance with laws, rules, and safety regulations as evidence of employer “control,” even though everyone must adhere to the law.
Test #3
Finally, there is the NLRB test adopted in The Atlanta Opera decision. NLRB doesn’t just look at three or six factors; it sets out a “non-exhaustive” list of 10 factors for consideration.
For truckers and motor carriers looking for a needle in this complex haystack, they may find it in the minority opinion of the NLRB decision. In the minority opinion, a board member references a past ruling where the NLRB “held that government-imposed rules and regulations generally do not constitute control by the employer.” That means the NLRB and the proposed DOL rule may conflict and opens the door to challenge. As with the cases contesting AB5, litigation could overturn the DOL proposal.
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