Towards Universal Worker Coverage under the National Labor Relations Act: Making Room for Uncontrolled Employees, Dependent Contractors, and Employee-Like Persons

Abstract

One tactic employers have used recently to eliminate unions involves reclassifying employees as independent contractors. The 1947 Taft-Hartley Amendments encouraged these efforts: reacting to the Supreme Court’s interpretation of the Wagner Act’s undefined use of “employee” in NLRB v. Hearst Publications, Congress deprived independent contractors of the Act’s protection and proscribed application of the Court’s “economic reality of dependence” test in favor of common-law agency principles.

This restriction’s most serious consequences have befallen workers whose physical distance from employers renders traditional indicia of control ambiguous and thus amenable to employers’ contractual manipulation. The most prominent examples in the 1970s and 1980s have been so-called lessee taxicab drivers and truck drivers, whose relegation to atomized labor markets federal appellate courts have repeatedly approved.

The reasoning here proceeds through four steps. First, the Court’s economic reality of dependence test is shown to have been unnecessary to deciding coverage in Hearst. Second, a critical confrontation of the Act’s fundamental goals with the prescription of common-law agency principles reveals a conflict: those interpretive guidelines’ restrictiveness and ambiguity make them an irrational and dysfunctional means of realizing the law’s expansive organizational ends. Third, analysis of the working conditions of the judicially most disputed group of workers -- lessee taxicab drivers -- shows that even under pre-New Deal common-law agency factors, such workers are employees. Fourth, it is concluded that, because the distinction between immunized wage bargaining and price fixing violative of the antitrust laws is merely derivative of the employee-independent contractor issue, that distinction cannot be controlling.

Consequently, it is proposed that a new category of employee, modeled after those introduced in other countries (“uncontrolled employee,” “dependent contractor,” or “employee-like person”), be created to prevent employers and courts from denying workers the right to self-organization by virtue of unilaterally imposed cosmetic contractual changes of working conditions.

Keywords: independent contractor, employee, National Labor Relations Act, Taft-Hartley-Amendments, NLRB v Hearst Publications, lessee taxicab drivers, U.S. Supreme Court, economic reality of dependence test, common-law agency doctrine, antitrust laws, uncontrolled employee, dependent contractor, employee-like