Vacating a National Labor Relations Board (the “Board”) decision that a stagehand referral service violated the National Labor Relations Act by refusing to bargain with its stagehands’ union representative, on February 3, 2016, the Eleventh Circuit Court of Appeals held that the stagehands were independent contractors and not employees of the referral service. In Crew One Prods., Inc. v. NLRB, No. 15-10429 (11th Cir. Feb. 3, 2016), a three-judge panel concluded that the vast majority of factors used to determine independent contract status led to only one conclusion: “the stagehands are independent contractors and the decision of the Board was contrary to law.”
The employer at issue was a referral service, which referred stagehands to event producers for concerts, plays, trade shows, and other events in the Atlanta area. The employer offered jobs to the stagehands on a first-come, first-served basis; did not withhold taxes or offer benefits to the stagehands; did not prohibit the stagehands from accepting jobs from other referral services or from doing other work; did not provide the stagehands with any tools (other than a company vest for safety and identification reasons); and required the stagehands to sign independent contractor agreements. For any job, the employer required only that the stagehands check-in and check-out with the company in order to keep track of their hours. Nevertheless, when a union petitioned the Board to represent the stagehands, the Board concluded that the stagehands were employees and not independent contractors, directed an election, and certified the union.
In overruling the Board, the Eleventh Circuit concluded that the Board made “five errors…when it applied the law to the facts.” Among those five errors, the Board did not give adequate weight to the facts that the employer did not withhold the stagehands’ taxes and that the stagehands signed independent contractor agreements. The court also found irrelevant the Board’s consideration of the stagehands’ inability to negotiate their pay and erroneous the Board’s conclusion that the stagehands performed the “essential functions” of the employer’s operations.
Most importantly, the court stated that the Board widely missed the mark in its analysis of the most critical factor of the independent contractor analysis—control. As the court explained, “[t]he requirement that stagehands check in and check out evinces control over the ends of the job, not the means of it. Contrary to the Board’s findings, “[o]nly the event producers and touring crews control the means of the work performed by the stagehands, and [the employer] lacks the expertise to direct the stagehands in their work for any particular client.” Considering all of the factors, the Eleventh Circuit vacated the Board’s decision.
Although the Board and other federal government agencies continue to be hostile to independent contractor relationships, the Eleventh Circuit’s decision is a welcome reminder that not all workers classified as independent contractors are actually employees.