Feds offer mixed results for workers

Bill Knight column for 2-25, 26 or 27, 2019

U.S. workers this winter took two steps forward and one step back with the federal government, as two court rulings and a National Labor Relations decision meant wins on defining “joint employer” and on prohibiting some companies from forcing independent-contractor workers to go to arbitration, but made it easier for employers to exclude workers from labor-law protections by making them independent contractors.

The U.S. Court of Appeals for the Washington, D.C., circuit in late December decided that corporations could be held responsible for issues like illegal job termination and wage discrimination even if the employees were subcontractors or worked at a franchise. Writing for the majority, Judge Patricia Millett said that companies could be considered joint employers if they exercised some “indirect control” over employees or reserved the authority to do so. The question of who’s a joint employer – who’s responsible – has been important to groups like Fight for 15, which aims to organize fast-food workers at franchised businesses.

The appellate court affirmed a key ruling made during the Obama administration. Then, the NLRB in a case involving Browning-Ferris Industries, wrote, “With more than 2.87 million of the nation’s workers employed through temporary agencies in August 2014, the Board held that its previous joint-employer standard has failed to keep pace with changes in the workplace and economic circumstances.”

Judge Millett said the NLRB must update its process of determining joint-employer status, and the Trump administration must comply.

Meanwhile, in a surprising outcome, the U.S. Supreme Court last month unanimously ruled that independent contractors who work in transportation may not be subject to mandatory arbitration. Remarkable from a court that usually favors corporate interests over working people, the decision could let thousands of contractors have their day in court rather than in costly, often employer-controlled arbitration.

 “New Prime v. Oliveria” involved a dispute between New Prime trucking and a driver who was required to complete 10,000 miles hauling freight for free as an “apprentice,” and then had to complete another 30,000 miles as a “trainee” paid about $4 an hour. Once he became a full-fledged driver, he was made a contractor, not an employee, and had to lease his truck from a company subsidiary, buy his own equipment from New Prime, and pay for his own fuel, often from New Prime – which deducted the expenses from his pay.

The driver filed a class-action suit alleging drivers were misclassified, but the employer argued his contract requires disputes go to arbitration under the decades-old Federal Arbitration Act. However, the Court, on technical grounds, determined that that law excludes “workers engaged in … interstate commerce.”

Lastly, the NLRB in recent weeks made it easier for companies to treat their workers as independent contractors excluded from federal labor protections, overturning another Obama-administration rule.

By a 3-1, party-line vote, Republican board members sided against SuperShuttle van drivers who sought to unionize at the Dallas-Fort Worth airport, ruling that they were independent contractors and not protected by federal labor law. SuperShuttle drivers had previously been employees earning hourly wages, working scheduled shifts, and driving company-owned vans, but in 2005, SuperShuttle switched to a “franchise” model that unilaterally made drivers as independent contractors who pay the company a $500 franchise fee, plus $575/week to use the SuperShuttle brand and its dispatch system, and a “decal fee” of $250. SuperShuttle drivers also must supply their own shuttle van, and the employer sets customer fares, requires drivers to be active certain days and hours, and can fire them.

The board’s decision overruled a 2014 case, FedEx Home Delivery, in which a Democratic majority on the former NLRB established a standard making it easier for workers to be considered employees instead of contractors. The majority in last month’s case wrote that the Obama-era ruling had “impermissibly altered the board’s traditional common-law test” by “severely limiting” the significance of workers’ “entrepreneurial opportunity” when analyzing whether they were contractors or employees.

The SuperShuttle case will likely affect “contingency” workers, from office temps to ride-share drivers.

The NLRB decision is an exaggeration of the reality of contemporary work, said Wilma Liebman, who chaired the NLRB in Obama’s first term.

The new ruling is just the latest example of the current NLRB “ignoring worker realities and constricting labor law rights. Fewer workers have fewer rights with the Trump Board,” she said.