United States: Labor Board Dunks On Employer's Contractor Classification Attempt

Last Updated: September 4 2017
Article by Richard R. Meneghello

NBA's Timberwolves Foul Out In Front Of NLRB



In a ruling sure to leave businesses and gig economy companies crying foul, the National Labor Relations Board concluded that workers producing electronic video display content for the NBA's Minnesota Timberwolves were misclassified as independent contractors and are actually employees. The Board's 2-1 decision, announced on August 18, is a setback for businesses seeking certainty in their classification decisions, and is a reminder that the current roster of Labor Board members remains decidedly pro-worker and pro-union. Until the Board is comprised of a majority of Republican appointees, businesses need to be wary in their approach to classification situations (In re Minnesota Timberwolves Basketball LP).

The Key Players: Electronic Content Producers

Just like any game of basketball, every classification dispute centers around two competing parties: the workers and the business. The business in this case is Minnesota Timberwolves Basketball LP, which owns both the NBA's Timberwolves and the WNBA's Lynx, both of which play their home games at Target Arena in Minneapolis. Between the two teams, there are some 60 or so games per year played at the arena, and at each game, a roster of specialized crewmembers ensures the fans stay entertained and informed.

On the other side of the contest are those crewmembers, classified by the Timberwolves as independent contractors. At every game, a crew of 16 workers ensures that the arena's four-sided video display board displays live game footage, replays of critical action, real-time statistics, video shots of the crowd, advertisements, pre-produced video content, and other graphic displays. The 16 spots are filled from a roster of 51 individuals who are each qualified to perform a variety of roles – camera operators, replay operators, technical directors, engineers, and similar jobs.

In February 2016, the International Alliance of Theatrical Stage Employers filed a petition with the National Labor Relations Board (NLRB) seeking to represent the workers and form a union. However, because only employees and not independent contractors can unionize, the key question in this representation petition was whether the workers were properly classified. Although the NLRB's Regional Director sided with the NBA team and concluded the workers were correctly designated as independent contractors, the union stepped up on behalf of the workers and requested review by the Labor Board. Last week, the Board reversed the decision of the Regional Director and ruled in favor of the workers and union, permitting the union organizing drive to proceed.

Calling A Foul: Labor Board Rules For Workers

The NLRB first set the ground rules for the contest. It relied upon a series of common-law agency principles, solidified in a critical 2014 decision, to help guide its decision-making process when it comes to misclassification disputes. The standard calls for an analysis of 11 factors to help render a determination, although the list is nonexhaustive, no single factor is determinative, and the entire relationship must be assessed and weighed with all factors considered.

The Board acknowledged that a series of factors seemed to fall in favor of independent contractor status. For example, the workers could remove themselves from the roster of potential assignments at any time, and could decline an invitation to work a game with no negative consequences. There were no minimum or maximum game requirements they could work each season. They were allowed to cancel an accepted work assignment without any repercussions, so long as they found a replacement on their own; they did not even need to receive approval from the Timberwolves before switching with another worker. Just about all of the crewmembers performed similar work for other entities, and the Timberwolves games were not their only assignment. Finally, the workers were paid on a per-game basis, which made their work much more like a "gig" worker who gets paid per assignment instead of by the hour or with a set salary.

However, in examining the full spectrum of factors that surrounded the workers' jobs, the Board felt that the balance fell in favor of employee classification. The critical findings of the Labor Board were:

  • The crewmembers were told when and where to perform their work; there was no individual negotiation over game days and tip-off times, and the Timberwolves required them to show up to work at certain times in advance of the games for preparation and pregame work.
  • The business provided just about all of the tools, equipment, and supplies needed for the crewmembers to perform their work, including cameras, cables, instant replay machines, sound equipment, broadcasting gear, headsets, and – of course – the center-hung video board suspended over the basketball court.
  • A majority of the crew had worked for the company year after year, and there was an understanding that each crewmember would return the following season to continue work.
  • The core of the Timberwolves' business was not just playing basketball games, but providing entertainment services for the thousands of customers who paid good money to attend the games. This meant that the crewmembers were instrumental in carrying out functions deemed to be instrumental to the very essence of what the team did.
  • Although the Timberwolves paid the workers on a per-game basis, there was evidence that the rate of pay was closely tied to the amount of time spent working each game. For example, during home openers or other games where extra work would be needed, the crewmembers were paid a premium to reflect the additional time and work.
  • While the crewmembers were permitted some amount of freedom and independence when performing their work, they were also required to adhere to any "live call" direction they received from the team (regarding specific video shots or content needed) and to a predetermined "script" unique to each game and unilaterally created by the team (this could include shots of the team mascot, or video of fans in the seats during the "kiss cam" and other features). As the Board said, "the Employer holds and exerts control far exceeding that possessed by crewmembers themselves over when and how they will perform video production work, as well as the manner and means by which that work is accomplished."

Overtime: What Does This Mean For Employers?

In some ways, this decision is not all that surprising. Despite a vigorous and well-reasoned dissent by the lone Republican member of the Labor Board (Philip Miscimarra), the NLRB has tilted decidedly in favor workers over the course of the past several years. Until new appointees are in place by the new administration, you can expect similar decisions to be issued by the Labor Board over the course of the next several months. And while it is possible the Timberwolves will appeal this decision to a federal appeals court, the result of any such maneuver will take considerable time – and success in court is certainly not guaranteed.

Any business that retains independent contractors needs to pay attention to this decision and the Labor Board's philosophy when it comes to these issues. Although there has been some positive movement when it comes to misclassification at the federal level (such as the recent withdrawal of the Department of Labor's opinion letter), the Labor Board – along with other administrative agencies, state bodies, and the court system – will no doubt continue to scrutinize independent contractor relationships. There is potential danger with every such business arrangement, so you should work with your legal counsel to ensure that you are doing everything you can to reduce your exposure.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Richard R. Meneghello
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.