New NLRB Decision on Independent Contractors

Published September 28th, 2015 -  - 09.28.1511

Last week, I argued that the “flexibility” of gig-economy jobs can comfortably coexist with a legal determination that those jobs are held by “employees” rather than by independent contractors.  I emphasized that “workers can choose when and how much to work, and can even work without immediate supervision, and still be employees within the meaning of the law.”  On Friday, the NLRB issued its decision in Sisters’ Camelot, a case with some clear relevance to this debate.

In Sisters’ Camelot, the Board held that individuals who work as door-to-door canvassers for a charity are employees within the meaning of the NLRA.  The decision relies on the eleven (eleven!) factor test set out in the Board’s earlier FedEx Home Delivery case, and so the Board’s ultimate conclusion is quite fact dependent.  Moreover, while many of the facts that support the Board’s finding of employee status in Sisters’ Camelot are also present in the Uber context, many other facts are not.  My point in this post is thus not that Sisters’ Camelot dictates a particular outcome for Uber.  Instead, my point is that Sisters’ Camelot provides further support for the proposition that work relationships can be flexible and still be defined as “employment” under the law.

Three of the factors the Board discusses are most directly relevant to this analysis:

1.  Scheduling

The Board holds that the first FedEx factor — the “extent of control by employer” — supports a finding of employee status.  Significantly, this is true even though “canvassers are not required to report for work on any given day.”  That is, even though canvassers could decide each day whether they wished to work or not, the relevant question was how much control the employer exercised when the canvassers did work.  This is relevant to Uber because it means that a worker’s ability to decide whether or not to “show up” for work does not convert that worker into an independent contractor.  What matters, instead, is the extent of control exercised by the putative employer when the worker does decide to work.

2.  Supervision

The Sisters’ Camelot Board also considered the fact that “canvassers are not generally subject to in-person supervision while working.”  The trial judge held that this fact favored a finding of independent contractor status, but the Board did not find it dispositive.  To the contrary, the Board held that “the nature of the work makes such in-person supervision highly impractical.”  And, the Board stressed that the charity had other means of monitoring the canvassers’ performance.  These facts seem relatively parallel to Uber: in-person monitoring is not practical, and the firm has developed other means of assessing performance – namely, the star rating system, as we’ve discussed before.  Sisters’ Camelot thus supports the proposition that work can be employment even absent direct supervision or in-person monitoring (assuming that a finding of employment is supported by an analysis of all the relevant factors).

3.  Freedom to work for others

In Sisters’ Camelot, the canvassers’ were free to solicit on behalf of other organizations (when they weren’t actively soliciting for Sisters’ Camelot).  The trial judge believed that this freedom supported a finding of independent contractor status, but again the Board disagreed.  It held, “the ability to work for multiple employers does not make an individual an independent contractor.”  To the contrary, “employees in certain industries typically have intermittent working patterns.”

As I noted, there are facts in Sisters’ Camelot that are not present in the Uber context.  The charity in Sisters’ Camelot, for example, set the start and end time for all canvassing and determined the geographic area to be covered by each canvasser. The charity also transported its canvassers to their assigned areas each work day and provided all the necessary canvassing materials.  These facts helped convince the Board that the canvassers were employees, but such facts would not be available to Uber drivers.  On the other hand, there are other facts in Sisters’ Camelot that would be of use drivers arguing employee status: for example, the Sisters’ Camelot Board stressed the fact that the canvasser’s commission rate was nonnegotiable, just as the Uber take rate is nonnegotiable.

The Board may soon need to decide whether Uber drivers are employees within the meaning of the NLRA.  Whichever way the Board comes out on that question, Sisters’ Camelot suggests that a substantial degree of flexibility – in both work scheduling and supervision – can be consistent with employment.

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