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NLRB returns to Obama-era independent contractor test

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The National Labor Relations Board reinstated an Obama-era independent contractor test Tuesday, departing from a more employer-friendly test adopted during the Trump administration.

The Board held that the makeup artists, wig artists, and hair stylists who work at the Atlanta Opera are employees. The workers had filed an election petition with NLRB seeking union representation — a right unavailable to independent contractors.

In its decision, the Board said it rejected its 2019 position in SuperShuttle — a stance taken during the Trump administration — that entrepreneurial opportunity for gain or loss should be the “animating principle” of the independent-contractor test.

Instead, NLRB will return to a standard adopted in 2014 in FedEx Home Delivery: Entrepreneurial opportunity will be taken into account, along with the traditional common-law factors, by asking whether the evidence tends to show that a supposed independent contractor is, in fact, rendering services as part of an independent business.

“We find that the Board should give weight only to actual (not merely theoretical) entrepreneurial opportunity, and that it should necessarily evaluate the constraints imposed by a company on the individual’s ability to pursue this opportunity,” it said in The Atlanta Opera, Inc.

The shift was an expected one, Foley and Lardner LLP attorneys made clear in a blog post when NLRB announced its intent to revisit SuperShuttle; and the change may have an especially significant impact on industries such as franchisors that classify franchisees as independent contractors. “A return to the FedEx approach will open the door possibly to more employee misclassification claims, unionization, and greater protection for workers under the [National Labor Relations Act],” they predicted.

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