A Powerful "One-Two" Punch: NLRB And DOL Signal Contractor Classification Crackdown

• Published date: 09 February 2022
• Subject Matter: Employment and HR, Employee Benefits & Compensation, Employee Rights/ Labour Relations
• Law Firm: Benesch Friedlander Coplan & Aronoff
• Author: Mr Marc S. Blubaugh and Jordan J. Call

Transportation providers would do well to pay close attention to twin developments unfolding before the NLRB and the DOL that could have a very detrimental effect on those providers who use independent contractors as drivers, sales agents, or otherwise. Likewise, commercial users of transportation services should similarly be attuned to the implications that these developments could have on capacity, overall transportation spend, and their relationships with their providers.

A Potential New NLRB Standard for Worker Classification

The National Labor Relations Board (NLRB) has indicated it may return to a more worker-friendly standard for evaluating whether independent contractor classification is proper. On December 27, 2021, the NLRB invited public comment on whether it should replace the current standard for determining whether a worker is properly classified as an independent contractor or is instead an "employee" under the National Labor Relations Act (NLRA). Such a shift would have a significant impact on the treatment of independent contractors in the transportation industry.

The case at issue, The Atlanta Opera, Inc., NLRB No.10-RC-276292 (2021), involves a determination of whether the subject workers are independent contractors or are actually employees of The Atlanta Opera, Inc. In reconsidering the standard for contractor classification, the NLRB has invited interested amici to provide responses to the following two questions: First, should the NLRB adhere to the existing independent-contractor standard most recently set forth in SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019); and if not, what standard should substitute, such as a return to the Obama-era standard set forth in FedEx Home Delivery, 361 NLRB 610, 611 (2014), either in its entirety or with modifications?

In SuperShuttle, the NLRB adopted the traditional common law agency test for determining whether a worker is an employee or independent contractor, as originally explained in the 1968 Supreme Court decision, NLRB v. United Insurance Co. of America, 390 U.S. 254, 256 (1968). This common law agency test includes an analysis of the following 10 factors:

1. The extent of control which the "master" may exercise over the details of the work;
2. Whether or not the worker is engaged in a distinct occupation or business;
3. The kind of occupation, including whether the work is usually done under the direction of an employer or by a specialist without supervision;
4. The skill required in the...