HR Policy Urges NLRB to Retain Traditional Standard for Independent Contractor Status

The National Labor Relations Board’s proposal to narrow the scope of who is an independent contractor under the National Labor Relations Act would have negative consequences for employers and workers, the Association argued in an amicus brief filed with other business groups.

Continued seesawing on independent contractor issue: The Board has already changed its standard for determining who is an employee or independent contractor under the NLRA twice in the last six years. Now, the current Board has signaled that it will rework the standard yet again and asked for briefs in Atlanta Opera, Inc. 317 NLRB No. 45 (2021), addressing whether it should reinstate a previous standard under the Obama-era Board that significantly limited independent contractor status, or something similar.

The Association’s brief argues that the Board should retain the current standard which is based on decades of established judicial precedent and common law. Specifically, the brief argues that returning to the Obama-era Board’s test would impermissibly dilute the significance of entrepreneurial opportunity as a factor in determining independent contractor status in violation of congressional intent and at odds with two separate D.C. Circuit decisions which rejected this aspect of the Obama-era standard.

The Association also cautioned against continuing the regulatory whiplash that has become rampant at the Board over the last twelve years, with established precedents being reversed at an alarming rate to the detriment of the regulated community. Further, the Association argued that restricting the use of independent contractors is bad public policy for all stakeholders, as it removes the flexibility sought by many workers and employers.

White House Task Force urges “rigorous enforcement” by DOL: Independent contractors are also in the crosshairs at DOL. The White House Task Force on Worker Organizing and Empowerment instructed DOL to continue to prioritize cracking down on worker misclassification along with “robust outreach to workers, employers, unions, and worker advocates.” 

Outlook: The Board’s call for amicus briefs regarding independent contractor status is the latest signal of coming labor law changes – the Board has already accepted briefs regarding increased damages for labor law violations and bargaining unit size determinations, and is currently soliciting briefs regarding employer workplace rules and policies and mandatory arbitration clauses. HR Policy has already filed or will file briefs in each of these cases. Board decisions in each case can be expected by the end of the year.