Contingent workforce users remain in the crosshairs of government agencies and workers themselves — Lyft recently agreed to pay $12.5 million to settle a misclassification lawsuit filed by drivers. However, an 11th Circuit Court of Appeals decision this month ruled workers supplied by a staffing firm are independent contractors, not employees.
The issue in the 11th Circuit case was union representation.
Staffing firm Crew One supplied stagehands as independent contractors in the Atlanta area to producers of concerts, plays and trade shows. The National Labor Relations Board ruled the workers were employees, requiring Crew One to negotiate with a union — which Crew One refused to do.
Crew One appealed the decision, and the 11th Circuit Court agreed the stagehands were independent contractors — overturning the NLRB. The court’s ruling covered several issues, including:
Control. Crew One did not have the right to control the stagehands. Only event producers and touring crews controlled the means of work; Crew One lacked expertise to direct workers, according to the decision. Stagehands were also able accept or reject work without retaliation and were free to accept work from other labor providers. Crew One provided no training, although it did provide information to stagehands, including a caution that “touring crews are not always in the best of moods.”
Taxes. Failure to withhold taxes weighed strongly in favor of a determination that the stagehands are independent contractors. However, the court also wrote “we acknowledge that our sister circuits would give this fact less weight.”
Agreements: Independent contractor agreements were signed by workers and serve as evidence of the parties’ intent. “If the [NLRB] had found fraud, duress or some other defense to formation, it would have been correct to disregard the agreements. But the [NLRB] made no such finding. It gave the agreements less weight only because Crew One insisted that all of the stagehands sign one. The theory is not a valid defense to the formation of the agreements. Contrary to the argument of the [NLRB], the significance of the agreements is not ‘undercut’ by the fact that all of the stagehands signed one.”
Pay. The ability to negotiate over pay is irrelevant, the court wrote.
Type of work. Stagehands do not perform work that is part of the business of Crew One. The staffing firm refers stagehands for jobs but does not perform stagehand work itself, according to the court.
Tools. Stagehands provided their own tools. Crew One only provided a reflective vest for safety purposes and security purposes — to let show producers know they are authorized personnel.
Benefits. Stagehands received no benefits.
“When we consider all of the factors, we must conclude that the stagehands are independent contractors,” the court wrote. “The most important factor, control, supports only this conclusion. The failure to withhold taxes, the independent contractor agreements, the nature of Crew One’s business, the absence of benefits, the tools and the insurance provided by the clients also support only this conclusion. The only factor that weighs in favor of the opposite result is the hourly payments, but this factor is outweighed by the totality of the other factors, especially the lack of control.”
One blog writer wrote the court’s decision is particularly interesting given the lawsuits against Uber claiming its independent contractor drivers are misclassified.
The 11th Circuit Court of Appeals covers Alabama, Georgia and Florida.