ATLANTA—The National Labor Relations Board is using a court case in Atlanta, pitting Theatrical and Stage Employees Local 798 against the Atlanta Opera’s bosses, to battle, and try to narrow, employers’ “independent contractor” dodge—misclassification which robs millions of workers of pay, benefits, jobless aid, workers comp and the right to unionize.
And though the Biden Administration’s Justice Department’s friend-of-the-court brief in the case says “it’s in support of neither” the NLRB nor the Opera’s bosses, a close reading shows DOJ sides with workers—here, hair stylists and makeup artists—who want to unionize.
And they’re just one example of “independent contractors,” most of them in the “gig economy,” left unprotected by labor law. Both the NLRB and Justice say that’s wrong.
The Atlanta federal court case is also one example of increasing cooperation between the NLRB and other federal agencies against labor law-breakers—cooperation pushed by both an executive order from Democratic President Joe Biden and by Congress’ majority Democrats.
Board General Counsel Jennifer Abruzzo, its top enforcement officer, recently signed “memorandums of understanding” with both the Justice Department’s Antitrust Division and the Federal Trade Commission on joint pursuit of wrongdoers against workers.
“When businesses interfere with worker organizing, either through creating structures designed to evade labor law or through anti-competitive practices, it hinders our economy and our democracy,” Abruzzo said at the signing ceremony with Antitrust Division Director Jonathan Kanter.
“This memorandum of understanding will strengthen the federal government’s ability to effectively stop this kind of unlawful activity and, therefore, to better protect workers’ rights.” She gave similar remarks at an earlier signing ceremony with the Federal Trade Commission.
In the Atlanta Opera case, the NLRB argues makeup artists and hair stylists who prep the singers before they go on stage are “employees,” with the right to organize and bargain for regular wages and benefits when they join IATSE Local 798, just like stagehands and the singers are. The opera contends the stylists and makeup artists are independent contractors.
The Antitrust Division, in a brief Kanter signed, says they’re employees, and that misclassifying the workers—most of them women of color–cuts their pay and benefits and rights. Cutting down such misclassification is NLRB’s goal and that of Biden’s administration.
“A dramatic expansion during the past decade in the number and variety of workers who are categorized as independent contractors created significant ambiguity about the appropriate treatment of such workers under antitrust law,” Kanter’s brief tells the federal court in Atlanta.
While both labor law and union contracts “provide important protections for worker organizing and bargaining, courts have historically held these exemptions only protect employees and their unions, not independent contractors. By contrast, concerted action by independent contractors traditionally has been subject to antitrust scrutiny”—and charges.
“Because of this distinction, if the NLRB adopts or maintains an ambiguous or overly narrow definition of ‘employee,’ certain workers, including those who might qualify as employees” could be sued on antitrust charges “for organizing to improve their conditions—a risk heightened by the tendency of courts to construe the labor exemptions narrowly.
“Consistent with the reasoning in these and other cases, there may be potential benefits to extending certain labor protections to workers who seek to bargain with a single employer—including digital platforms and other firms whose business models have led to the proliferation of the ‘gig economy.’”
The brief estimates that between 7% and 10% of all workers are now in the “gig economy,” and thus left to fend on their own without labor law protection. That’s what the NLRB’s Abruzzo and the Justice Department told the court in Atlanta in the IATSE case.
“Our national economy has seen a dramatic change in the ‘facts of industrial life’ in recent years,” DOJ told the court. “Millions of workers who, until recently, would have been properly classified as employees”—and able to unionize—”have seen their work recategorized as independent contracting and have thereby lost crucial protections the National Labor Relations Act and similar labor statutes would otherwise provide.”
Those “similar statutes” which don’t cover independent contractors—unless those workers pay both their share of payroll taxes and the bosses’ share, too—include Social Security, Medicare, jobless benefits, and workers’ comp. They also lose the right to organize.
“This trend has been accelerated by the rapid rise of digital platform intermediaries, whose core business model often relies on coordinating the work of large numbers of workers while disclaiming the traditional responsibilities of an employer,” the Justice Department said.
“The fundamental economic changes resulting from the erosion of traditional employment raise important questions not only for the NLRB, which is charged with protecting the right to organize but also for the [Antitrust} Division, which is charged with enforcing the antitrust laws in a manner consistent with recognized exemptions from antitrust scrutiny for collective action by employees and other protected labor-related activity.”
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