Companies can be more confident that liability under the National Labor Relations Act will not flow from the misclassification of its workforce alone, thanks to a recent NLRB decision. Baker McKenzie attorneys call this welcome news for companies, but say they still must look at workforce relationships and properly classify independent contractors.

In a much

Companies with operations in California can exhale slightly, with the Ninth Circuit Court of Appeal and another California appellate court recently concluding, separately, that the rigid “ABC Test” established in Dynamex v. The Superior Court of Los Angeles County does not apply in the joint employer context.

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Today California Governor Gavin Newsom signed a landmark bill making it more difficult for companies to engage independent contractors. (See our previous coverage HERE.) Assembly Bill 5 “will help reduce worker misclassification — workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits,” Newsom wrote in a statement.

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We’re excited to announce a new article authored by Jim Baker that was published in the Summer 2019 issue of the Benefits Law Journal.

In this article, Jim covers how the dramatic increase in the number of workers who are classified as independent contractors is changing how employers and workers interact, specifically the implications on

Hiring Entity:  When are gig workers employees?

Four Government Agencies & Courts:  It depends!

Trying to track the employment status of gig workers will make your head spin. Contractors? Employees? Super heroes?

In the last few weeks, four federal and California state agencies and courts — the US Department of Labor, the National Labor Relations Board, the Ninth Circuit Court of Appeals and the California Labor Commissioner — have all weighed in on the debate. And, the answer is — it depends.

Follow our script below to help make sense of the patchy legal landscape.


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On January 25, 2019, the National Labor Relations Board reaffirmed its adherence to the traditional common law independent contractor test for determining whether a worker is an employee or an independent contractor under the National Labor Relations Act.

In SuperShuttle DFW, Inc., the Board expressly overruled its 2014 FedEx Home Delivery decision. In FedEx, the Board drastically reduced the significance of entrepreneurial opportunity in the determination of independent contractor status. FedEx emphasized the right to control factors relevant to the so-called “economic realities” test and gave weight to whether a worker was in fact “seizing” actual opportunities and rendering services as part of their own independent business.

SuperShuttle DFW, Inc. is significant as it abandons the Obama-era standard and gives a boost to companies using contract labor by elevating the importance of entrepreneurial opportunity in the independent contractor analysis. Insodoing, the Board returns the legal framework to its traditional common law roots and adds the examination of entrepreneurial opportunity. The decision suggests that moving forward, the Board “evaluate the common-law factors through the prism of entrepreneurial opportunity when the specific factual circumstances of the case make such an evaluation appropriate.”


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With the modern workforce comes modern employment problems. Businesses and workers alike have embraced the “gig economy,” but employment laws were not designed for workforces dominated by independent contractors and freelancers. This disconnect leaves gig economy businesses open to significant liability where such workers should have been classified as employees under the law.


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On June 14, franchisors received good news when the US District Court in the Eastern District of Illinois ruled that Jimmy John’s Franchise, LLC is not a joint employer of its franchisees’ employees.

In 2014, former employees of various Jimmy John’s franchisees brought a collective action against their former franchisee employers and against Jimmy John’s

On April 30, the California Supreme Court issued an opinion radically changing the legal landscape for any company engaging independent contractors in California. Dynamex Operations West Inc. v. The Superior Court of Los Angeles County changes the legal test for determining whether workers should be classified as employees or as independent contractors under California’s wage