Eleventh Circuit Issues Significant Independent-Contractor Ruling

Miller & Martin PLLC Alerts | February 10, 2016

by Bob Parsley

Last week, the U.S. Court of Appeals for the Eleventh Circuit (which has jurisdiction over Alabama, Florida and Georgia) issued a ruling that is noteworthy for all employers, addressing the often-contested issue of whether a worker is an employee or an independent contractor.

In Crew One Productions, Inc. v. N.L.R.B., --- F.3d ---, Case No. No. 15–10429, 2016 WL 403201 (11th Cir. Feb. 3, 2016), the Eleventh Circuit held that workers were independent contractors and not employees of a labor-referral service. This decision reversed a ruling by the National Labor Relations Board (NLRB) that the workers were employees and thus entitled to union representation. While this decision has national significance, it also happens that Miller & Martin represented the appellant/employer, Crew One.

Factors that the Eleventh Circuit held supported independent-contractor status were the following: (1) the labor-referral service did not control or direct the workers while they were working; (2) the labor-referral service did not withhold taxes from the workers' pay; (3) the labor-referral service entered into written independent-contractor agreements with all workers; and (4) the workers (stagehands) did not perform work that was part of the business of the labor-referral service (which is "referring labor"). Although the Court held that basing pay on hours worked was indicative of employee status, the Court found that this factor was far outweighed by the other factors that indicated independent-contractor status. As a result of the Court's decision, the labor-referral service is no longer required to engage in collective bargaining with the International Alliance of Theatrical Stage Employees, a labor union.

As stated above, this decision has national importance. It is only the second ruling since 1983 by the Eleventh Circuit on independent-contractor relationships in the labor-union context and the first by any federal appellate court on this topic since 2009. This decision also provides important federal precedent on the question of whether labor-referral services may properly operate based on an independent-contractor business model.

Miller & Martin attorneys Don Aho, Bob Parsley, Bill Trumpeter, Randy Wilson (and former Miller & Martin attorneys Jay Elliott and Jonathan Kent) represented Crew One.

As always, should you have any questions regarding how this decision could affect how you have been classifying workers (as employees vs. independent contractors), please feel free to contact one of the Miller & Martin attorneys referenced above or any of our Labor & Employment Law Practice Group members.