Outside contractor status guidance found in recent decision
Feb 25, 2016
By Tonda F. Rush
General Counsel | NNA
WASHINGTON—Helpful guidance for newspapers using independent distribution contractors came in February from the U.S. Court of Appeals for the 11th Circuit in Atlanta. The court ruled in favor of a company that hires stagehands as contractors to provide crew support for concerts and other large events, turning back a decision by the National Labor Relations Board that had required the stagehands to be treated as employees.
The company, Crew One, engages stagehands and refers them to event managers. The Labor Board had ordered the company to allow a labor union to be formed under the aegis of the International Alliance of Theatrical Stage Employees, but Crew One declined to negotiate with the union. The Labor Board filed an unfair labor practice complaint.
The company requires independent contractor agreements, provides a W-9 form for the workers and engages in minimal orientation. Its requirements were skeletal, including a ban on bringing family or friends to the concerts, expecting workers to bring their own 6-inch wrench and expecting workers to be sober.
The court ruled that Crew One did not exercise control over the stagehands (who were directed by the event managers), did not withhold taxes and did not provide benefits. The company provided workers’ compensation insurance, but charged the cost back to the client. The workers were free to engage in other entrepreneurial interests. One factor that weighed against the independent contractor finding was that the stagehands were paid hourly. But the court said that this one element was outweighed by the others.
Although the case came from an unfair labor practices complaint rather than an action by a state taxing authority that most community newspapers face in contractor challenges, the court’s upholding of elements of control that mirror newspaper carrier relationships may aid newspapers in the circuit in future disputes. Such elements are:
• Requiring workers to provide their own tools.
• Engaging in arms-length written agreements.
• Providing W-9 tax forms rather than withholding employee taxes—all echo practices in the industry.
One aspect of the stage crew case that is distinguished from newspaper practices was that Crew One did not actually engage in the business of putting on events, so contractors were not performing work that was part of Crew One’s business.
