Preview of 2021? New Bill Would Revoke Arbitration Agreements, Raise Stakes for Independent Contractor vs. Employee Disputes

Independent contractor misclassification epic systems congressRegardless of your politics, I think we can all agree that the best part of Election Day being over is that there will be no more political ads for a while. You know what I mean: “Candidate A hates you and your family and supports legislation to tax you into bankruptcy. I’m Candidate B and I approve this message.” Or, “Candidate B hates you and your family and supports criminals and gangs. I’m Candidate A and I approve this message.” Finally and mercifully, that’s going to end for a while.

So let’s look ahead to 2020, when another vicious round of political ads will be unleashed upon your television screen, punishing all who have not yet cut the cord.

With the Democrats taking control of the House, and with several key Republican seats expected to be in play in 2020, a Democratic presidential win in two years could mean that the Democrats enter 2021 in control of both houses of Congress and the Executive Branch.

A bill recently introduced by prominent Democrats provides a hint of what would happen to recent wins for businesses in the areas of employee arbitration agreements and class action waivers.

H.R. 7109, the Restoring Justice for Workers Act, would prohibit class action waivers in employment contracts and would prohibit agreements to arbitrate future claims. The proposed law would roll back the Supreme Court’s recent Epic Systems decision and shift the balance of workplace power back toward employees.

According to a study cited in Justice Ginsburg’s dissent in Epic Systems, about 65% of companies with more than 1,000 employees have mandatory arbitration agreements. These contracts would become void.

The bill would also increase the stakes for businesses that use independent contractors. If employee arbitration agreements and class action waivers were unenforceable, then the determination of Independent Contractor vs. Employee becomes even more important. A misclassified contractor (who is deemed to be an employee) could then bring class action claims in court, rather than being restricted by contract to seeking an individual remedy through arbitration.

The bill has no chance of passage in the current Congress, but a tsunami of pro-worker legislation may be coming after the next couple of years. 

Meanwhile, enjoy the resumption of TV ads about erectile dysfunction and drugs that you should ask your doctor about even side effects include rare incurable cancers and in some cases death. These are the ads we know and love.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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New Definition of Joint Employment Still Appears Likely, Despite Efforts to Smack NLRB Chair in Face with an Octopus

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When this kayaker was slapped in the face by an octopus wielded by a seal, he just laughed it off. It didn’t seem to hurt, and I guess that’s just a thing that seals sometimes do.

Q. Now, Lebowitz, how are you going to work that intro back into something related to joint employment?

A. Watch this!

Similarly, it didn’t take long after the NLRB proposed a new regulation that would redefine joint employment (see this post) for two prominent Democrats to try to octo-seal-slap the NLRB’s Chair into backing off. Not gonna happen. The Board will not abandon its kayak.

Last week, Senator Patty Murray and Representative Bobby Scott sent a letter to Board Chair John Ring, arguing that there is “scant research or analysis” to support the Board’s call for a new joint employment standard. Um, so everything in the joint employment world has been peaches and cream? Heck, there’s so much uncertainty in the joint employment world right now that someone could devote a whole blog just to that topic!

In an effort to stall the rulemaking process, Murray and Scott asked the Board to extend the comment period on the proposed new rule by another 60 days (because no one saw this coming?) and demanded that the Board produce of all sorts of records relating to joint employment cases filed over the past several years. They also tried to re-raise concerns that there might be a conflict of interest affecting two of the three Republican Board members. The letter demanded the production of 21 categories of documents within 12 days, including asking for the name and case number of every joint employment case during the past six years fitting into various categories.

Let’s be realistic. This letter is basically outreach by Sen. Murray and Rep. Scott to labor unions, showing that they’ve got their back on the joint employment issue (to the detriment of businesses). I expect the letter will have no real effect on the process for rulemaking or on the timetable for adoption.

While few people may read that letter, the Go-Pro video of the seal smacking the kayaker in the face with an octopus has received a boatload of hits. I highly recommend watching. It is far more entertaining than this blog.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Will New Bill Finally Allow Independent Contractors to Receive “Employee” Benefits?

Employee benefits for independent contractors

In 1983, Journey released the album Frontiers which, as you all know, is not as good as Escape but way better than Raised on Radio. The third song on Frontiers is After the Fall (youtube 80s refresher here), not to be confused with the later-formed Australian rock band, After the Fall (which is not to be confused with the much earlier British post-punk band The Fall, which came before After the Fall, but I digress). The Australian band, After the Fall, featured a drummer named Mark Warner, not to be confused with the Democratic Senator from Virginia, who, incidentally, is not related to John Warner, who was also once a Senator from Virginia.

Mark Warner the Senator recently introduced a bill that relates to the subject of this blog, and so for that, I am grateful, especially since it allowed me to mention the album Escape, which I really liked very much.

Sen. Warner has been trying for some time to gain traction on a bill that would promote portable employee benefits for gig workers. I am solidly behind this idea, as it would provide much more flexibility for independent contractors to carve out their own career paths without forfeiting employee benefits. I never understood why we tie health insurance to employment in this country, but that’s for another day.

Warner’s bill has never gone anywhere but, to his credit, he is trying again.

Last week, he introduced an amendment to a massive appropriations package. The amendment would set up a system to award grants for state and local governments and non-profits. The grants would support the creation of programs to allow portable benefits for gig workers, including health insurance, workers compensation, disability coverage, and retirement savings plans.

I hope the program succeeds. The current legal framework, which recognizes independent contractors and employees but no third option, is not consistent with how the modern gig economy works. If benefits can be de-coupled from employment, as they should be, we may eventually see a 21st century system that allows gig workers to receive insurance, workers comp, and other protections, without having to be reclassified as employees.

Thank you, Sen. Warner. I won’t stop believin.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Like a Drunken Possum, NEW GIG Act Fails Again.

NEW GIG act possum

Screenshot from DailyDot.com, 12/3/2017

I feel bad for this little guy. This possum apparently broke into a Florida liquor store, knocked over a bottle of bourbon, and got sauced. Wildlife rescue picked him up and checked him into rehab (no, not that kind). Full coverage here at DailyDot.com.

I applaud the critter’s effort, though.

He probably feels a little like Senator John Thune (R-SD), who has repeatedly introduced a bill called the NEW GIG Act — designed to simplify tax law for independent contractor misclassification scufflaws. Every time he gets close, though, someone knocks him over the head with a bottle. Or something like that.

The NEW GIG Act has been introduced in Congress several times. If passed, it would Continue reading

Time to Dance? Momentum Builds for Proposed New Joint Employment Law

Screen Shot 2017-10-28 at 11.47.09 AM

Leadership Lessons from Dancing Guy is a low-quality youtube video that has somehow amassed more than a million hits. In the video, a lone (possibly intoxicated) festival goer starts dancing in a field. After a minute or so, momentum builds and others join him, showing off their terrible dance moves in a video you’ll wish you hadn’t wasted three minutes watching. (Just speaking from experience here.)

Several weeks ago, the House began considering a bill that would rewrite the definition of “joint employment” under federal wage and hour law (Fair Labor Standards Act) and federal labor law (National Labor Relations Act). The Save Local Business Act would require “direct” and “significant” control over “essential terms” of employment before a business could be considered a joint employer of a worker employed by another business (such as a staffing agency or a subcontractor). Read more here and here.

Originally sponsored by Rep. Bradley Byrne of Alabama (you might think of Rep. Byrne as the original dancer in the Leadership video, but dressed as a conservative Southern gentleman), the bill now has 112 co-sponsors, including a few Democrats. Dance party!

Continue reading

Joint Employment Legislation Needs to Be Expansive — If It’s to Be Effective

IMG_1093On Monday, we wrote about the Save Local Business Act — proposed legislation that, if passed, would create a new definition for joint employment under the NLRA and FLSA. But would that law go far enough?

No. Not at all.

On the bright side for businesses, the law would provide some predictability in that staffing agency workers would most likely be excluded from bargaining units. It would also remedy the current unfairness that results when a staffing agency makes payroll and overtime miscalculations but the company using the workers is held responsible as a joint employer.

But much more needs to be done to provide real clarity and predictability for business owners.

First, the law fails to address who is a joint employer under other federal employment Continue reading

Congress May Rewrite “Joint Employment” Definition

IMG_1092Congress may finally provide some clarity in determining who is a joint employer. In legislation introduced last week, the House proposed a bill that would rewrite the definition of “joint employer” under federal labor law (National Labor Relations Act) and federal wage and hour law (Fair Labor Standards Act).

The Save Local Business Act — despite lacking a fun-to-say acronym — would create a new standard for determining who is a joint employer under these two laws. The proposed new standard would allow a finding of joint employment “only if such person [business] directly, actually, and immediately, and not in a routine and limited manner, exercises significant control over the essential terms and conditions of employment….”

The definition provides examples of what are “essential terms and conditions,” including: Continue reading