Back and Forth and Back Again on Employee/Independent Contractor Standards

Published January 2024

Eric Robinson
By Eric P. Robinson, USC School of Journalism and Mass Communications

Over the past few years, the National Labor Relations Board has gone back and forth on the definition of and standards for determining whether individuals who work for newspapers and other businesses on a part-time basis are employees or independent contractors.

 

In the newspaper industry, this has been a particular issue with delivery people, freelance reporters and other part-timers.

 

In 2005—during the George W. Bush administration—the NLRB determined that newspaper carriers for the St. Joseph (Mo.) News-Press were independent contractors and thus could not unionize, based on the newspaper’s limited supervision and control of the carriers. But in 2014, during the Obama administration, the NLRB rejected the standard it had used in making the St. Joseph (Mo.) News-Press decision, replacing it with one based on worker’s economic dependence on an employer. But this change was overruled by a federal appeals court, and the Trump-era NLRB restored the earlier standard in a January 2019 decision (covered by this column here), and formally adopted a rule to this effect in 2021.

 

Now the Biden-era NLRB has adopted a new standard which is similar to the 2014 one. Under this new rule, a worker’s status will be determined by examining six factors: any opportunity for profit or loss a worker might have; the financial stake and nature of any resources a worker has invested in the work; the degree of permanence of the work relationship; the degree of control an employer has over the person’s work; whether the work the person does is essential to the employer’s business; and a factor regarding the worker’s skill and initiative.

 

The new rule is scheduled to go into effect on March 11. While there is some concern that the new rule will trigger a flood of lawsuits over employment status of various workers, the new rule has generated opposition from business groupsincluding the News/Media Alliance—some of which may be poised to sue.

 

The new NLRB rule applies only regarding rights to unionize. Other federal agencies have their own standards for determining whether a worker is an employee or independent contractor for their own purposes, such as IRS rules regarding status for tax purposes. Also, states each have their own standards. South Carolina does not have clear statutory criteria for making this determination, but the South Carolina Supreme Court has held that the question is “a fact-specific determination reached by applying certain general principles,” and “[t]he general test is whether the alleged employer has ‘the right and authority to control and direct the particular work or undertaking, as to the manner or means of its accomplishment.’” South Carolina courts also look at who provides equipment necessary for the work; how the worker is paid; and how the worker may be terminated.

 

Any lawsuits over the new NLRB rule are not likely to be resolved before the presidential election. And depending on who wins, we may go through yet around round of rule-making and litigation on this seemingly ever-shifting issue.

 

Eric P. Robinson focuses on media and internet law as associate professor at the USC School of Journalism and Mass Communication and in an “of counsel” position at Fenno Law in Charleston / Mount Pleasant. He has worked in media law for more than 25 years and is admitted to legal practice in New York and New Jersey and before the U.S. Supreme Court. This column is for educational purposes only; it does not constitute legal advice. Any opinions are his own, not necessarily those of his employers.

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