The National Labor Relations Board (“NLRB” or “the Board”) continued its course of reversing Trump-era law by issuing a decision last month that will make it easier for workers to establish “employee” – as opposed to “independent contractor” – status within the meaning of the National Labor Relations Act (“the Act” or “NLRA”), thereby giving more workers the right to unionize in private-sector workplaces.

In The Atlanta Opera, Inc., 372 NLRB No. 95, the Board found that makeup artists, wig artists and hairstylists engaged by the opera were employees within the meaning of Section 2(3) of the Act, not independent contractors, meaning they are eligible to unionize.

In its opinion, the Board said it will consider a non-exhaustive list of common-law agency principles to assess independent contractor status, with no one factor being determinative. Those factors, which derive from Section 220 of the Restatement (Second) of Agency, include:

1. The extent of control which, by the agreement, the master may exercise over the details of the work;
2. Whether or not the employed is engaged in a distinct occupation or business;
3. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
4. The skill required in the particular occupation;
5. Whether the employer or the workman supplies the instrumentalities, tools and the place of work for the person doing the work;
6. The length of time for which the person is employed;
7. The method of payment, whether by the time or by the job;
8. Whether or not the work is a part of the regular business of the employer;
9. Whether or not the parties believe they are creating the relation of master and servant; and
10. Whether the principal is or is not in business.

Atlanta Opera overrules SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019), which placed an emphasis on “entrepreneurial opportunity” – that is, an individual’s opportunity for gain or loss – in the independent contractor analysis and reestablishes the test from FedEx Home Delivery, 361 NLRB 610 (2014), known as FedEx II. Under FedEx II, entrepreneurial opportunity may be considered as a factor in the independent contractor analysis but it is not given special consideration.

According to the Atlanta Opera Board, entrepreneurial opportunity is only significant if the purported contractor is actually rendering services as part of an independent business, as opposed to just theoretically having the right to do so. Instead, the Board said it will focus primarily on considerations such as whether a company has placed limitations on the individual’s realistic ability to work for other companies, restrictions on the individual’s control over important business decisions and whether the company unilaterally makes and changes the terms and conditions under which the individual operates.

With the Atlanta Opera decision, companies may see more workers become entitled to the Act’s protections, including the right to unionize. Employers are reminded that the independent contractor analysis is a fact-specific assessment and what an individual worker does in practice will often carry more weight than what the parties may have agreed to in writing, including in independent contractor agreements.

Though the Atlanta Opera decisionis subject to appeal to the D.C. Circuit Court, whose view has differed from the Board’s on this topic in the past (see, e.g.,FedEx I,563 F.3d 492 (D.C. Cir. 2009)), the Board follows a policy of non-acquiescence under which it does not treat circuit court decisions as binding precedent. Therefore, the Atlanta Opera approach is likely here to stay… at least until the Board’s majority changes political hands again.

Miles & Stockbridge’s labor lawyers routinely assist employers with NLRB matters, collective bargaining, and other issues affecting unionized workplaces.

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