Employee or Entrepreneur

I. IntroductionAn often overlooked aspect of labor and employment law is that such laws apply only where there is an employment relationship. However, this feature is not completely ignored, for any astute employer is well aware that classifying its workers as nonemployees means that it need not comply with many labor and employment laws, or payroll tax requirements. Despite - or perhaps because of - this significant effect, the struggle to distinguish employees from independent contractors and other nonemployees has been lengthy and confused. This confusion is unfortunate because it has provided many employers with the opportunity to manipulate certain aspects of individuals.1 work for the sole or primary purpose of avoiding legal and tax Uability.2Within the annals of this struggle to define who is a covered employee, the National Labor Relations Act (NLRA) holds a special place. As in other areas, the NLRA' s employee/independent contractor test has been a model for other statutes. But this model leaves much to be desired and is in desperate need of reform.Micah Jost, in his Note, Independent Contractors, Employees, and Entrepreneurialism Under the National Labor Relations Act: A Worker-by-Worker Approach? smartly explains the development of the NLRA's definition of employee and the many problems it has engendered, particularly in allowing employers to classify many workers as noncovered independent contractors despite the fact that a fair reading of the statute would consider them employees. He then turns his attention to a particularly disturbing new twist on this classification: The D.C. Circuit's recent focus on the existence of entrepreneurial opportunity as the primary factor in determining employee status. As Jost describes, this approach flies in the face of a long history of common law and undermines the aims of the NLRA and other labor and employment laws.One suggestion Jost makes to correct the D.C. Circuit's approach is to replace the court's stress on theoretical entrepreneurial opportunity with actual opportunity, based on each individual worker's experience. This change would certainly be an improvement, but as Jost acknowledges, more comprehensive reform would be even better. One significant change would be legislation that shifted the emphasis away from the traditional common law approach and towards a definition that focuses on the policies of the NLRA. Although this would disrupt the NLRA's role as a template for other labor and employment laws - a role for which it has often been weU suited - that minor disruption should not hinder an otherwise beneficial reform. The NLRA has unique attributes, and a definition of "employee" that took into account that reality would improve the statute's ability to fulfill its aims.Alas, the prospect for legislative change is dismal, at least in the shortterm. Thus, it is imperative to consider what options, if any, exist for the National Labor Relations Board (NLRB or Board) to counter the D.C. Circuit's recent moves. Because of the odd circumstances surrounding the development of the D.C. Circuit's approach, it appears that the NLRB possesses several strategies that could shift the analysis back to the traditional position. This is not an ideal solution by any means, but one that would be a dramatic improvement over where the law is going now.II. Going Rogue: The D.C. Circuit's Unique Entrepreneurial Opportunity ApproachAs Jost ably describes, the customary approach to distinguishing employees from independent contractors is a multi-factor common-law test. This test traditionally focused on an employer's right to control the manner and means of work, although recent caselaw has taken a more equitable look at all of the factors.4 The D.C. Circuit, however, has taken this move further and shifted the focus away from control to entrepreneurial opportunity. In doing so, it raised troubling questions not only for the future of the NLRA's definition of employee, but also for the court's deference to the NLRB. …