June 13, 2023
By: Thomas O’Connell
Citation:
The Atlanta Opera, Inc. and Make-Up Artists and Hair Stylists Union, Local 798, IATSE, 372 N.L.R.B. No. 95, 2023 WL 4051664 (2023).
Executive Summary:
In this case, the National Labor Relations Board (NLRB), with Chairman Lauren McFerran and Members Wilcox and Prouty forming the majority, reexamined the classification of workers under Section 2(3) of the National Labor Relations Act (NLRA). The Board overturned the precedent established in SuperShuttle DFW, Inc. (2019) and reinstated the standard from FedEx Home Delivery (2014) to determine whether workers are employees or independent contractors. Applying this revised standard, the Board found that The Atlanta Opera’s makeup artists, wig artists, and hairstylists were employees under the NLRA rather than independent contractors. Member Kaplan dissented in part but agreed that the workers at issue were statutory employees.
Relevant Background:
The dispute arose when the Make-Up Artists and Hair Stylists Union, Local 798, IATSE, filed a petition to represent stylists at The Atlanta Opera. The employer contended that the stylists were independent contractors, asserting that they exercised control over their work, had the ability to accept or decline assignments, and were engaged in a broader creative industry with multiple employment opportunities.
The Atlanta Opera has historically classified stylists as vendors rather than employees. Stylists are not placed on the employer’s payroll, do not receive benefits, and are issued IRS Form W-9 instead of W-2. They negotiate their hourly rates individually and do not operate under written contracts. Although the stylists provide some of their own tools, The Atlanta Opera supplies wigs, makeup, and hairstyling products.
The employer argued that the stylists had substantial entrepreneurial opportunity, noting that they could work for other companies, were engaged only for individual productions, and were not guaranteed future work. The union contended that the stylists were subject to significant control, were integral to The Atlanta Opera’s productions, and lacked the independence associated with an independent contractor relationship.
Decision:
The Board, applying the FedEx Home Delivery standard, determined that the stylists were employees under the NLRA. The ruling was based on multiple factors, including:
- The Board found that The Atlanta Opera exercised substantial control over the stylists’ work. Although stylists performed their tasks without immediate oversight, they were required to adhere to the artistic director’s creative vision, including specific directives on hair, makeup, and styling. Additionally, stylists’ schedules were dictated by the employer’s rehearsal and performance plans.
- The Board considered whether the stylists had realistic entrepreneurial opportunities. It noted that while stylists could theoretically accept work elsewhere, the structure of their engagement—requiring multi-day commitments per production—limited their ability to pursue outside work. The Board emphasized that entrepreneurial opportunity must be actual rather than theoretical.
- The Board determined that the stylists were integral to The Atlanta Opera’s productions. Their work was a necessary component of the employer’s operations, which weighed in favor of employee status.
- The Board found that while stylists provided some of their own tools, The Atlanta Opera supplied essential materials, including wigs, makeup, and styling products, which suggested an employment relationship.
- The Board acknowledged that stylists were classified as independent contractors for tax purposes but found that this factor alone was not dispositive. It considered the lack of independent negotiation over fundamental terms of work to be relevant to the classification analysis.
The Board also considered and rejected the employer’s argument that SuperShuttle provided a more appropriate standard, concluding that the FedEx Home Delivery framework was more consistent with traditional common-law principles. Additionally, the Board rejected the argument that stylists’ ability to decline assignments was a determinative factor, finding that the totality of circumstances weighed in favor of employee status.
Looking Forward:
The Board’s decision reinstates FedEx Home Delivery as the governing standard for independent contractor analysis under the NLRA, which may have implications for franchisors and other businesses that rely on independent contractor models.
- Companies that classify workers as independent contractors should review their classification frameworks under the reinstated standard, as the Board’s approach now places greater emphasis on the totality of the working relationship rather than focusing on entrepreneurial opportunity as a primary factor.
- The decision suggests that workers who are subject to detailed creative or operational control, even in industries where independent contracting is common, may be deemed employees. While each case is fact-specific, businesses in performing arts, entertainment, and other project-based industries should evaluate whether their classification practices align with the Board’s reasoning.
- Given the history of shifting standards in this area, further changes could occur based on Board composition, judicial review, or legislative action. Businesses should monitor developments and consult with legal counsel to assess risks related to worker classification under the NLRA.