Eleventh Circuit Finds Stagehands to be Independent Contractors Under the NLRA, Vacating NLRB Decision | Practical Law

Eleventh Circuit Finds Stagehands to be Independent Contractors Under the NLRA, Vacating NLRB Decision | Practical Law

In Crew One Productions, Inc. v. NLRB, the US Court of Appeals for the Eleventh Circuit vacated a decision by the National Labor Relations Board (NLRB) and found that stagehands were independent contractors, not employees.

Eleventh Circuit Finds Stagehands to be Independent Contractors Under the NLRA, Vacating NLRB Decision

by Practical Law Labor & Employment
Published on 08 Feb 2016 • USA (National/Federal)
In Crew One Productions, Inc. v. NLRB, the US Court of Appeals for the Eleventh Circuit vacated a decision by the National Labor Relations Board (NLRB) and found that stagehands were independent contractors, not employees.
On February 3, 2016, in Crew One Productions, Inc. v. NLRB, the US Court of Appeals for the Eleventh Circuit found that freelance stagehands were independent contractors, not employees of the referral service through which they received their work assignments. The Eleventh Circuit vacated a decision by the panel (Board) heading the NLRB's judicial functions which had entered summary judgment against the referral service for refusing to negotiate with a union certified by the Board. ( (11th Cir. Feb. 3, 2016).)

Background

Crew One Productions referred stagehands to event producers for work on concerts and various other productions and events. The workers received an information packet from Crew One which included company policies. Stagehands signed Independent Contractor Agreements and were free to accept or decline offers from Crew One. The stagehands reported exclusively to tour personnel except for recording their time with Crew One for payment purposes.
In March 2014, the International Alliance of Theatrical Stage Employees petitioned the Board to represent the stagehands in their Crew One contract. The Board concluded that stagehands were employees and directed an election to certify the union as the stagehands' exclusive representative. Crew One refused to bargain and the Board filed a complaint alleging an unfair labor practice (ULP). The Board entered summary judgment against Crew One, which petitioned for review (The Board cross-applied for enforcement of the decision).

Outcome

The Eleventh Circuit vacated the Board's decision and found that stagehands were independent contractors. The Eleventh Circuit noted that:
The Eleventh Circuit found that:
  • The Board misapplied the law or gave improper weight to certain facts, noting that:
    • Crew One did not exercise control over the stagehands who were referred to event producers;
    • the failure to withhold taxes was strong evidence that the stagehands were independent contractors;
    • the workers signed independent contractor agreements which showed intent to form an independent contractor relationship;
    • the Board gave improper weight to the fact that the stagehands could not negotiate their own pay, as relative bargaining power did not create an employee-employer relationship; and
    • the Board misapplied the law when it considered whether the stagehands performed essential functions of Crew One's business, confusing work that is essential to Crew One's business with work that is part of Crew One's business; Crew One is in the business of referring stagehands to event producers, but Crew One does not perform stagehand work itself.
  • The Board correctly applied the law to the following facts:
    • stagehands provided their own job supplies;
    • stagehands received no benefits from Crew One; and
    • workers' compensation insurance was provided by clients, not Crew One.
  • Considering all facts, the stagehands were independent contractors, not employees of Crew One.

Practical Implications

In Crew One, the Eleventh Circuit concluded that stagehands were independent contractors, vacating a holding by the NLRB that they were employees of the company that referred them to event producers. The court followed the Restatement (Second) of Agency's factors and gave the most weight to the degree of control that the company had over the stagehands, which was minimal. The Board misapplied several aspects of the law and gave improper weight to certain facts. The Eleventh Circuit's Crew One decision is an example of a successful challenge to the NLRB expanding the scope of its jurisdiction and its more expansive view of who is an employee versus an independent contractor.