Prior to July 2nd, New Jersey’s Medical Cannabis Act lacked protections for employees’ off-duty medical marijuana use.  Indeed, last year the U.S. District Court for the District of New Jersey held that nothing in the Medical Cannabis Act “requires an employer to waive a drug test as a condition of employment for federally-prohibited substance.”  Cotto v. Ardagh Glass Packing, Inc., 2018 U.S. Dist. LEXIS 135194 (Dist. N.J. 2018).  The Act previously provided that it should not be construed to require an “employer to accommodate the medical use of marijuana in any workplace.”  Further, unlike the Delaware and Pennsylvania Acts, the NJ Act did not contain an anti-discrimination clause.

That all changed at the beginning of this month.

On July 2nd, New Jersey Governor Phil Murphy signed a bill amending the NJ Act and adding several provisions affecting the workplace:

  • The NJ Act now contains an express anti-discrimination clause. Employers are prohibited from taking any adverse action against a registered qualifying patient based solely on the individual’s status as a registered qualifying patient.  This means that employers cannot discharge, discipline, refuse to hire or otherwise affect the terms and conditions of employment simply because an individual is registered to use medical marijuana.
  • The language regarding no duty to accommodate has been removed. However, the Act now expressly provides that employers may prohibit the use of medical marijuana during work hours and anywhere on the employer’s premises, regardless of whether the employee is on or off duty.
  • The amendments also provide a safety net for employers who wish to avoid violating federal law or losing federal funding. The Act now states that employers are not required to commit any act that would violate federal law – i.e. allowing a DOT regulated truck driver to drive while using medical marijuana.  Additionally, employers are not required to commit any act that would result in the loss of a license provided by federal law or that would result in the loss of a federal contract or of federal funding.
  • Most notably, under the amendments, NJ employers must provide notice to applicants or employees who test positive for cannabis, that they have the right to provide a “legitimate medical explanation” for the positive result. The applicant or employee has three working days to provide this information.  Within the three-day window, the applicant or employee may also request a confirmatory test of the original sample, provided the employee foots the cost.

Employers in New Jersey should take notice of the amendments, which became effective immediately, and revise their drug testing policies and procedures to ensure compliance.  Moreover, it is important to remember that individuals using medical marijuana in accordance with state law, in New Jersey and in the other states where medical marijuana is legal, likely are protected by state disability discrimination laws.  Accordingly, employers should be mindful of their obligations to engage in the interactive process with employees who disclose medical marijuana use.  The days of zero tolerance policies regarding marijuana are now nothing more than a pipe dream!

If you have any questions regarding your drug testing policy or the drug testing laws in your state, please contact Denise Elliott at or any other member of the McNees Labor and Employment Group.

What’s new in the world of medical marijuana, as it impacts your workplace?  Quite a bit, actually.  Here is the rundown.

PA Medical Marijuana Act – Anxiety and Tourette’s Syndrome Added to List of Serious Medical Conditions

Effective July 20, 2019, the Pennsylvania Department of Health added anxiety disorders and Tourette’s syndrome to the list of serious medical conditions for which a patient can obtain medical marijuana.  Dr. Rachel Levine, Secretary of Health for the Commonwealth of Pennsylvania, announced the additions last week.  The addition of anxiety disorders and Tourette’s syndrome expands the list of approved qualifying conditions to twenty-three.

Pennsylvania Litigation – Does the PA Medical Marijuana Act Include a Private Right of Action for Discrimination?

As you may recall from prior blog posts, the PA Medical Marijuana Act contains an explicit anti-discrimination provision.  Section 2103(b)(1) of the Act provides that “no employer may discharge, threaten, refuse to hire or otherwise discriminate or retaliate against any employee regarding an employee’s compensation, terms, conditions, location or privileges solely on the basis of such employee’s status as an individual who is certified to use medical marijuana.”  However, the Act does not contain an explicit cause of action for the enforcement of Section 2103(b)(1). Accordingly, for an employee to assert a claim for discrimination under the Act, the courts must find that the language of the Act creates an implied right of action.  A plaintiff in Lackawanna County is currently asking that the Lackawanna County Court of Common Pleas to do just that.  Palmiter v. Commonwealth Health Systems, et al., Lackawanna County C.C.P. Docket No. 19-CV-1315.

Ms. Palmiter’s Complaint alleges that (1) she disclosed to her employer that she was certified to use medical marijuana under PA law, (2) she applied for a new position and was told she must submit to a drug test; (3) she told the drug testing facility that she used medical marijuana and provided a copy of her certification card to her employer; and (4) the employer told her she was not allowed to return to work.  Ms. Palmiter alleges that the foregoing actions were discriminatory and constitute a violation of Section 2103(b)(1).  Commonwealth Health filed preliminary objections seeking dismissal of the Section 2103(b)(1) claim.  Commonwealth Health is arguing that no private right of action exists and that there is nothing in the text or the legislative history of the Act to warrant the creation of an implied cause of action.

No other court in Pennsylvania has addressed this issue.  Accordingly, we expect that the Lackawanna County Court will look to decisions of other states for guidance.  If the Court reviews a recent decision of the Superior Court of Delaware, it may be inclined to agree with Ms. Palmiter (See February 26, 2019 Blog Post). Unless the case settles, we may soon have a decision from a Pennsylvania Court on the impact of the Act on Pennsylvania employers!

Stay tuned!

Michigan – No Private Right of Action Created by the Michigan Medical Marijuana Act

The Court of Appeals of Michigan recently addressed the implied right of action question under the Michigan Medical Marijuana Act (“MMMA”).  In Eplee v. City of Lansing, the Michigan Court found that the MMMA did not create a private right of action for discrimination/retaliation.  The Plaintiff in Eplee claimed that the Defendant violated the MMMA when it rescinded a conditional offer of employment based on her THC-positive drug screening.  Ms. Eplee argued the MMMA prohibited the prospective employer from denying her any right or privilege, including civil penalty or disciplinary action, based on her medical use of marijuana.  According to Ms. Eplee, the Defendant rescinded her conditional offer solely because of her status as a registered qualifying patient and thus denied her the right of employment in violation of the MMMA.  The Defendant argued that the MMMA did not create a private cause of action and argued for dismissal of plaintiff’s lawsuit.  The Court of Appeal of Michigan agreed with the Defendant, finding that the cited section of the MMMA operates merely as “an immunity provision; it does not create affirmative rights.”

While this is good news for employers in Michigan, we doubt the Eplee decision will factor into the Court’s decision in Palmiter. Critically, the MMMA does not mention employers, but the PA Act does.  As noted above, the PA Act expressly forbids employers from discriminating or retaliating against employees based “on the basis of such employee’s status as an individual who is certified to use medical marijuana.”  There is no such language in the MMMA.  Thus, the Palmiter Court is not likely to find the Eplee decision relevant or persuasive.

Prohibitions on Pre-Employment Drug Testing for Marijuana

New York City and the State of Nevada recently passed laws restricting the use of pre-employment drug testing for marijuana.

In April, the New York City Council passed a bill banning employers from testing prospective employees for marijuana.  Testing for the presence of marijuana as a condition of employment is now an unlawful discriminatory practice under the New York City Human Rights Law.  Notably, the bill does not outlaw pre-employment testing for drugs other than marijuana.  The bill also carved out several exceptions where it will not apply, including for police officers, commercial drivers, and those positions dealing with the building code.  This law will take effect in New York City on April 9, 2020.

The Nevada Assembly passed a similar bill, which will take effect on January 1, 2020, “prohibiting the denial of employment because of the presence of marijuana in a screening test.”  Nevada Assembly Bill No. 132 alters Chapter 613 of the Nevada Revised Statutes—dealing with unlawful employment practices—and makes it unlawful for an employer to refuse to hire a prospective employee because the prospective employee tested positive for marijuana.  Certain exceptions apply, similar to the New York City law, such as for firefighters, emergency medical technicians, or where the employer determines that marijuana use “could adversely affect the safety of others.”  AB132 also allows employees to submit to an additional screening test—at his or her own expense—to “rebut the results of the initial screening test.”

While these laws do not take effect until 2020, Employers with employees in New York City and Nevada are encouraged to start the process of complying with the new testing prohibitions.  The process should include revising drug testing policies, speaking with your drug testing facilities to ensure compliance and confirming whether any exceptions or carve outs will apply.

For questions about these updates or any other issue related to medical marijuana in the workplace, please do not hesitate to reach out to Denise Elliott ( or any other member of the McNees Labor and Employment Group.

McNees summer associate, Sal Sciacca, contributed to this post.

In a case that started back in February of 2013 – when Security called 9-1-1 and had police escort non-employee union organizers out of the employer’s cafeteria – the Board “modified” decades of its own precedent.  Sort of.

Some background. The National Labor Relations Act requires that employers refrain from interference, discrimination, restraint or coercion with respect to employees’ exercise of their right to engage in union activity.  In 1956, the United States Supreme Court explained in NLRB v. Babcock & Wilcox Co. that an employer may prohibit nonemployee distribution of union literature on company property if (1) there are other available channels of communication that will enable the union to reach employees with its message and (2) the employer also prohibits other forms of distribution by non-employees.  In other words, an employer cannot discriminate against unions by restraining their right to distribute union literature or solicit members on company property, while allowing other nonemployees to engage in that sort of behavior.  That would be an unfair labor practice.  Babcock & Wilcox is the real, Law of the Land sort of precedent.

However, in 1982, the National Labor Relations Board held that the Babcock & Wilcox criteria do not matter if the nonemployee union activity is on any portion of the employer’s private property that is open to the public, such as a cafeteria.  Since then, the Board has held that union organizers cannot be denied access public areas (such as cafeterias), so long as they use it in the way it was intended (to order and eat food) and are not disruptive.  Several appellate courts agreed – and several didn’t.  However, since then, the Board has consistently found that it is an unfair labor practice for an employer to prohibit nonemployee union organizers from engaging in solicitation and other promotional activities in public areas of an employer’s premises, so long as they are not being “disruptive.”

Until two weeks ago.  In UPMC Presbyterian Shadyside and SEIU Healthcare Pennsylvania, the NLRB eliminated the “public space” exception that it created in 1982 and returned to a more pure interpretation of Babcock & Wilcox.  Retroactively.  That’s good news for employers who have public spaces on their private property.

The NLRB held that an employer has no legal obligation to allow use of its facilities by nonemployees for promotional or organizational activity. “The fact that a cafeteria located on the employer’s private property is open to the public does not mean that an employer must allow any nonemployee access for any purpose.”  What does this mean for employers?  IF there are other channels for the union to reach employees and the employer prohibits all promotional and solicitation activities on its property, the employer may prohibit union activity in public spaces as well (even if it is not disruptive).

Contact a member of the McNees Labor & Employment Law Practice Group to review your Solicitation and Distribution Policy for compliance with the law.

On June 13, 2019, the U.S. Department of the Treasury, Department of Labor, and Department of Health and Human Services issued final regulations which expand the options for employers to fund health insurance for employees.  Previously, employers were not permitted to establish heath reimbursement accounts (“HRAs”) for employees to purchase individual health insurance coverage unless the employer had less than 50 full-time employees and did not maintain a group health plan.  That will change on January 1, 2020.

Under the new final regulations, beginning January 1, 2020, any employer may establish an individual coverage HRA to provide unlimited employer funding for an employee to purchase individual health insurance coverage on or off an Exchange.  By using the Individual Coverage HRA to purchase health insurance, the reimbursements are not included in the employee’s taxable wages just as being covered under group health insurance is not included in an employee’s taxable wages.

An employer who offers an Individual Coverage HRA need not offer it to all of its employees but must offer it on the same terms to all individuals within a class of employees.  However, an employer is permitted to increase its contribution amount for older workers or workers with more dependents.  An employer may not offer a choice between an Individual Coverage HRA and a traditional group health plan to the same class of employees.  However, it may offer a traditional group health plan to one class of employees and an Individual Coverage HRA to another class of employees.   Likewise, an employer may permit an employee covered by an Individual Coverage HRA who purchases individual health insurance coverage outside of an Exchange to pay the balance of the premium for the coverage through a cafeteria plan.  Additionally, an offer of an Individual Coverage HRA is considered an offer of coverage under the Affordable Care Act’s employer mandate provided certain requirements are met.

The final rules also permit employers to establish Excepted Benefit HRAs which may be offered in addition to a traditional group health plan to cover the costs of non-covered medical expenses and dental and vision insurance.  Excepted Benefit HRAs must be available to all similarly situated employees and may allow the rollover of unused contributions from year to year.

Employers may take advantage of the new Individual Coverage and Excepted Benefit HRA regulatory provisions effective January 1, 2020; however, to meet an effective January 1st date, pre-planning must occur.  Contact any member of our Employee Benefits Group to learn more about the benefits and requirements of both HRAs and to start the planning process.

The issue of independent contractors and employment status continues to vex employers and present substantial liability risks.  The employment laws generally cover only employees, not independent contractors.  Properly classified independent contractors cannot have viable claims under the discrimination laws, wage and hour laws, leave laws, workers’ compensation laws, etc., because they are not covered by these laws.

Misclassification of an independent contractor, however, can result in liability under many laws for the unwary employer.  Independent contractor status can be a high risk/high reward proposition, and employers should ensure that they feel comfortable that those individuals they treat as independent contractors are properly classified under the relevant employment and tax laws.

The FLSA is a ripe source of potential risk for employers who utilize the services of independent contractors, consultants, and other service providers who are not treated as employees.  The vast majority of independent contractors do not receive overtime compensation in compliance with the requirements of the FLSA.  If the independent contractor is misclassified and actually qualifies as a covered employee under the FLSA, liability for unpaid overtime may exist if the individual has worked more than 40 hours in any work week.

On April 29, 2019, the U.S. Department of Labor issued an opinion letter on whether service providers for a “virtual marketplace company” (VMC) qualify as employees or independent contractors under the Fair Labor Standards Act.

The DOL defined a VMC as “an online and/or smartphone-based referral service that connects service providers to end-market consumers to provide a wide variety of services, such as transportation, delivery, shopping, moving, cleaning, plumbing, painting, and household services.”

To analyze the issue, the DOL applied the same six-factor test created by the U.S. Supreme Court in the 1940s to determine employment status under the FLSA:

  1. The nature and degree of the potential employer’s control;
  2. The permanency of the worker’s relationship with the potential employer;
  3. The amount of the worker’s investment in facilities, equipment or helpers;
  4. The amount of skill, initiative, judgment or foresight required for the worker’s services;
  5. The worker’s opportunity for profit or loss; and
  6. The extent of integration of the worker’s services into the potential employer’s business.

Applying these six factors, the DOL concluded that the workers at issue were independent contractors and not covered employees of the VMC under the FLSA.  The DOL essentially determined that the VMC was a referral platform, and not an employer of the service providers it paired with customers.

The VMC at issue did not interview or train the affiliated service providers or oversee or evaluate their work.  Nor did the VMC provide the service providers with equipment, materials, or working space.  The VMC’s platform provided the contractors with basic information about the customer’s service request (e.g., the kind of service needed, location, and date and time) and permitted the service providers to communicate directly with customers.  The VMC established default prices for the work based on the region and scope, but the customers, and not the VMC, paid the service providers, and service providers could negotiate the price of their jobs.

The DOL also noted that the workers were free to accept or reject work at their discretion, could work simultaneously for competitors of the VMC, performed work on a project-by-project basis without permanency, and provided services not to the platform company itself but instead to the consumer of the service.

The DOL’s opinion letter is helpful for businesses operating in the on-demand marketplace, a relatively new phenomenon in the so-called gig economy.  Beyond that, the opinion letter reaffirms that the decidedly 20th century six-factor test remains the applicable standard when determining employment status under the FLSA in the 21st century.

Like any non-exhaustive multi-factor test, there usually will exist ambiguity and gray areas when determining the independent contractor vs. employee question under the FLSA.  However, the DOL’s recent opinion letter is a welcome one for employers and demonstrates the agency’s current willingness to look closely at gig economy arrangements and not reflexively label any such arrangement covered employment under the FLSA.

By now, you are no doubt aware that the long-debated pay data component (“Component 2”) to the EEO1 Report is a requirement for this year’s reporting.  The requirement first surfaced in 2016 but was the subject of repeated litigation that kept it from being implemented.  Now, the EEOC has stated that it will open a portal for reporting by July 15th, and employers will have until September 30, 2019, to file their EEO1 Report, including Component 2 data based on their employees’ 2018 W-2 wages.

The original reporting requirement mandated that all employers affecting interstate commerce with 100 or more employees report W-2 wages for employees by race and gender within specific pay bands.  While the EEOC has said that it will change the format for Component 2 Data, the agency has not yet explained what the format will be.  Guidance on formatting may be forthcoming within the next few weeks.

So what’s the purpose of all this data collection anyway? Once the data has been collected, it will be shipped off to the University of Chicago’s National Opinion’s Research Center (“NORC”) for review.  EEOC has sought to definitively demonstrate a statistically significant pay gap between men and women, and majority and minority employees, for decades.  This tool is another in the agency’s chest to attempt to show that difference.  Ultimately, EEOC could use this data to raise claims of pay discrimination based on gender and ethnicity.

So what should you do now?  First, be ready to file your report if you are required to do so.  In addition, you should consider an audit of your wage data now to get out in front of any issues that might surface.

Employers concerned about their own pay practices can undertake a wage analysis by race and gender.  This will give the employer insight into how its pay practices may be viewed based on the data submitted.  We do note that EEOC is unlikely to be able to take any action based on the data submitted in the near term.  There is little doubt about the agency’s long-term goals, however.  If you wish to undertake a pay analysis for your company, contact me or any member of the McNees Labor and Employment Group for assistance.

In Revenue Procedure 2019-19 effective April 19, 2019, the IRS expanded a plan sponsor’s ability to Self-Correct certain retirement plan failures. This expansion makes it easier for plan sponsors to fix retirement plan mistakes without paying the fee assessed for corrections and, more importantly, without contacting the IRS. The changes expand the Self-Correction Program in three categories: plan loans, operational errors, and document failures.

Plan sponsors may now self-correct certain failures with respect to plan loans, including:

  • Providing participants new options to cure defaults on loan payments;
  • Correcting failures occurring when the plan allowed participants to have multiple loans even though it was not permitted under the plan;
  • Correcting a failure occurring when the plan provided a loan to a participant when the plan does not permit loans; and
  • Correcting failures occurring when the plan failed to obtain a required spousal consent.

Plan sponsors may also self-correct certain plan operational errors, such as administering a plan differently than the plan documents provide and failing to timely adopt a discretionary amendment, if certain criteria are met.

The new expanded Self-Correction Program also allows the correction of plan document failures such as a failure to timely amend the plan document or fixing a plan which is simply missing required language. Self-Correction of plan document failures must occur before the end of the second plan year of the failure.

Now is the perfect time to contact any member of our Employee Benefits Group to have your retirement plan document and procedures reviewed to find and fix potential problems.

Last legislative session, the Pennsylvania House of Representatives introduced H.B. 2664, which sought to add a new subsection to the Workers’ Compensation Act addressing post-traumatic stress disorders in certain first responders.  That Bill never made it out of committee, but that’s not the end of the story.

Last month, H.B. 432 was introduced.  Like it’s unsuccessful predecessor, this Bill seeks to add a new provision to the Workers’ Compensation Act adding post-traumatic stress disorders to the list of occupational diseases that the Act enumerates for certain first responders.

This Bill reflects a trend among other states, to extend workers’ compensation benefits to police officers, fire fighters and emergency medical service providers, who experience post-traumatic stress injuries due to traumatic events arising in the course and scope of their employment, or due to the cumulative effect of psychological stress in the course and scope of their job duties.

In particular, H.B. 2664 would allow a presumption of compensability in two situations:

  1. Where a police officer, fire fighter or emergency medical services provider experiences post-traumatic stress disorder, following exposure to a traumatic event or incident while working; or
  2. Where a police officer, fire fighter or emergency medical services provider, with 4 or more years of service, develops a post-traumatic stress disorder related to the cumulative effect of psychological stress at work.

Significantly, H.B. 2664 would amend Section 301(g) of the Act to allow workers’ compensation coverage of police officers, firefighters and emergency service providers in purely “mental-mental” cases, so long as there is a “substantial evidence” establishing a causal connection between a post-traumatic stress diagnosis, and a work exposure.  This is essentially a legislative elimination of the “abnormal working condition” standard, which had required proof of an event or incident highly unusual or abnormal, considering the type of work performed by the employee.

For example, under existing law, a police officer exposed to discovery of a rotting corpse might be ineligible for workers’ compensation, since this may not be an abnormal event for a busy city patrol officer (although it could be sufficient to establish a Heart & Lung Act claim for temporary benefits).  Should H.B. 2665 be enacted, the same officer would likely have a strong case for coverage of a related PTSD diagnosis.

This proposed legislation will be of most interest to municipal and public sector clients but could potentially impact providers of emergency medical services (i.e. hospitals or physician practice groups), ambulance crews and possibly even private sector employers who provide medical services through trained safety response teams.

We will continue to monitor this proposed legislation and will keep you informed.

On March 7, the Department of Labor released its Notice of Proposed Rulemaking seeking public comment on proposed changes to the minimum salary requirements in the Fair Labor Standards Act’s “white-collar” overtime exemption regulations.  If that sounds familiar, the DOL went through this same process back in 2015, only to have that new rule blocked by a federal court in 2016, days before it was set to take effect.

Key provisions in the DOL’s 2019 proposed rule (and how they compare to the 2016 final rule) include the following:

  • Raise the minimum salary requirement from $455 per week ($23,660 annually) to $679 per week ($35,308 annually). While this increase is significant, it is far less than that contained in the 2016 final rule, which would have more than doubled the minimum salary requirement to $913 per week ($47,476 annually).
  • Raise the total annual compensation requirement for the FLSA’s highly compensated employee exemption from $100,000 to $147,414. Interestingly, this increase is actually greater than the 2016 final rule, which would have increased this annual compensation requirement only to $134,004.
  • Review the minimum salary thresholds every four years, with any changes taking effect only after an opportunity for public comment. The 2016 final rule provided for automatic updates (i.e., increases) every three years, so the elimination of the automatic update language is another win for employers.
  • Allow employer to use non-discretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10% of the minimum salary requirement. This language is similar to language that appeared in the 2016 final rule.
  • Like the 2016 final rule, the 2019 proposed rule contains no changes to the white-collar exemptions’ duties tests or any other overtime exemptions.

The DOL estimates that the changes in the 2019 proposed rule would make more than a million currently exempt workers now eligible for overtime compensation.  By comparison, the DOL previously estimated that its 2016 final rule would make 4.2 million exempt workers eligible for overtime pay.  The DOL clearly is attempting to make more modest changes to the existing requirements for the white-collar exemptions.

Employers and other members of the public will be able to submit comments to the DOL regarding the proposed regulations for a 60-day period after the proposals are formally published in the Federal Register.  The DOL currently anticipates that the final rule will be issued in time to take effect in January 2020.

Of course, we in Pennsylvania still are waiting for the Pennsylvania Department of Labor and Industry to issue final regulations that likely will increase the minimum salary requirements for the white-collar overtime exemptions under the Pennsylvania Minimum Wage Act.

We anticipate that the requirements established under the federal and state regulations that we except to see in 2019 will not be the same, complicating compliance efforts for Pennsylvania employers.  While we do not yet know what the minimum salary requirements will be for the white-collar exemptions under both the FLSA and PMWA come 2020, employers should begin considering the impact that the proposed changes would have on the status of their exempt workforce.

We expect more news in the world of overtime exemptions in 2019.  Stay tuned.

In a key decision for many franchisors and franchisees, and others who rely on independent contractors, the National Labor Relations Board recently reinstated its test for examining contractor status.  In 2014, the Obama-era NLRB, in a case involving Fed Ex delivery drivers, “refined” its test for examining contractor status. The refinement was really a fundamental shift in how the NLRB reviewed these questions, and not surprisingly led to many more findings of employer-employee status.

The “refinement” diminished the importance of the workers’ entrepreneurial opportunities, holding that this question was really a minor part of the overall analysis, thus diminishing its importance greatly.  This question, which often supports a finding of independent contractor status, became much less of a focus for the NLRB.

In SuperShuttle DFW, the Board announced that it was overruling the Obama-era “refinement” and returning to the standard that had been in place for many years.  The NLRB cited years of case law, which held that the entrepreneurial opportunity was actually a key question in the analysis.

The NLRB made clear that it will continue to apply the common law agency test to analyze whether a worker is an independent contractor or an employee.  That test requires examination of a number of factors, including:

  • The extent of control exercised over the worker;
  • Whether the worker is engaged in a distinct occupation or business;
  • The kind of occupation, and whether it is typically performed under supervision;
  • The skill required;
  • Who supplies the tools and equipment necessary to do the work;
  • The length of time the worker is engaged;
  • The method of payment;
  • The intention of the parties with respect to their relationship; and
  • Whether the principal is a business.

The courts and the NLRB have long made clear that all of these factors must be considered and no single factor is controlling.  In addition, the analysis is not quantitative, but is qualitative.  In other words, one cannot simply count up the factors favoring one classification and make a determination. In SuperShuttle, the NLRB confirmed that all of the factors are important and no single factor will end the analysis.

The NLRB then clarified that entrepreneurial opportunity was indeed a key question, and not a sub-factor.  Just like the question regarding the right of control, the opportunity for profit and loss is really an issue that is at the heart of several of the factors.  Many of the factors may or may not demonstrate that the worker has an opportunity to make more money.  The NLRB stated that moving forward, while analyzing each factor, it will continue to ask whether the workers at issue do or do not possess entrepreneurial opportunity.

Where the common law factors demonstrate that the workers in question are afforded significant entrepreneurial opportunity, the NLRB will likely find independent contractor status.

We expect that this holding will return the balance back to the NLRB’s independent contractor analysis, and may help correct some of the more aggressive employer-employee decisions issued under the Obama-era standard.  If you have any questions regarding the status of any worker, please contact any member of our Labor and Employment Group.