The Building Tradesman Newspaper

Friday, February 08, 2019

Trump's NLRB again widens independent contractor rule

By The Building Tradesman

WASHINGTON, D.C. - The National Labor Relations Board on Jan. 25 reversed its policy set during the Obama Administration, and made it easier for companies to treat their workers as independent contractors and excluded from federal labor protections.

With three Republican-appointed members comprising the NLRB's majority, the panel ruled 3-1 that shuttle van drivers who were seeking to unionize at the Dallas-Fort Worth Airport were independent contractors and not employees. That makes them ineligible for protection under federal labor law, which protects workers' right to organize and bargain collectively.

Entire books have been written about the labeling of workers as "independent contractors" and the negative effects it has had on the economy over the past several decades. The independent contractor designation - very common in the U.S. construction industry - also allows employers to not only ignore union organizing drives, it allows them to not provide health insurance, workers compensation, unemployment compensation or 401K benefits while ignoring state and federal taxes.

Wilma Liebman, who chaired the NLRB in Obama’s first term, told Bloomberg that the new ruling is the latest example of the current board "ignoring worker realities and constricting labor law rights. Fewer workers have fewer rights with the Trump Board."

The NLRB said in a statement: "the National Labor Relations Board returned to its long-standing independent-contractor standard, reaffirming the Board’s adherence to the traditional common-law test.  In doing so, the Board clarified the role entrepreneurial opportunity plays in its determination of independent-contractor status, as the D.C. Circuit has recognized."

The NLRB statement said the workers - they called them "franchisees" - "leasing or ownership of their work vans, their method of compensation, and their nearly unfettered control over their daily work schedules and working conditions provided the franchisees with significant entrepreneurial opportunity for economic gain.  These factors, along with the absence of supervision and the parties’ understanding that the franchisees are independent contractors, resulted in the Board’s finding that the franchisees are not employees under the Act."

The decision overruled the FedEx Home Delivery case, a 2014 NLRB decision that modified the applicable test for determining independent-contractor status by severely limiting the significance of a worker’s entrepreneurial opportunity for economic gain.

An analysis of the case by the national law firm of Epstein Becker Green said that while the NLRB would look at each future case individually, "the case is likely to mean that workers who traditionally would have been found to be independent contractors and outside the Act’s protections," prior to the Obama era, "will be found independent contractors in the future once again."