Democrat-led NLRB Eyes New Independent Contractor And Joint Employer Tests

• Published date: 11 January 2022
• Subject Matter: Employment and HR, Employee Rights/ Labour Relations
• Law Firm: Benesch Friedlander Coplan & Aronoff
• Author: Adam Primm and Rick Hepp

The Democrat-majority National Labor Relations Board readied for 2022 by announcing plans to confront two President Trump-era legal tests'one that determines whether an independent contractor is actually an employee protected by federal labor law and a second that identifies when joint employers have a duty to collectively bargain'which could greatly expand the scope of union organizing efforts in the coming year.

The Board announced on December 27 that it wanted input from unions, employers, and others on whether to keep or replace the current independent contractor test established just two years ago in SuperShuttle DFW, 367 NLRB No. 75 (Jan. 25, 2019) (prior analysis here). In SuperShuttle DFW, the then Republican-majority Board held that a key factor in the independent contractor test should focus on whether a worker has an "entrepreneurial opportunity" for profit or loss and not on whether the worker was, in fact, rendering services as part of an independent business, as the Board under President Obama had decided in FedEx Home Delivery, 361 NRLB 610 (2014). By reversing the Obama Board's decision, SuperShuttle DFW returned to the independent contractor test it used without changes since the Supreme Court decided NLRB v. United Insurance Co. of America, 390 U.S. 254, in 1968.

The stakes are high, as the country continues to rely on so-called "gig" workers who provide short-term services like food delivery and ridesharing through computer apps. Overturning SuperShuttle DFW and replacing it with a more restrictive independent contractor test could make it easier for "gig" workers to be considered employees of the companies that operate those apps, and allow them collective bargaining under the National Labor Relations Act.

The announcement also came on the heels of a decision by the Board to re-examine the joint employer test, which establishes when one company is jointly liable for employees directly employed by another, such as in a franchisor-franchisee relationship or a staffing agency relationship. In 2020, the Board under Trump issued a rule that a company must possess "substantial direct and immediate control" over another's employees to be considered a joint employer (see prior discussion here). In issuing the joint employer rule, the Board overturned an earlier decision...