Employment Law Daily D.C. Cir. defers to NLRB finding that orchestra musicians were employees
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Thursday, April 21, 2016

D.C. Cir. defers to NLRB finding that orchestra musicians were employees

By Ronald Miller, J.D. The NLRB was granted enforcement of its order finding that musicians with the Lancaster Symphony Orchestra were employees, not independent contractors, and so entitled to join a union. Noting that the relevant factors pointed in different directions, with the orchestra’s extensive control over the means and manner of the musicians’ performance suggesting employee status, while on the other hand the musicians possessed a high degree of skill, the D.C. Circuit found it must defer to the Board’s conclusion that the musicians were employees where the case presented a choice between "two fairly conflicting views" (Lancaster Symphony Orchestra v. NLRB, April 19, 2016, Tatel, D.). Musician agreement. Every year the orchestra offers a series of music programs. Before the beginning of the season, it sends information packets to musicians inviting their participation. The packets list the program and rehearsal schedules for the coming year and announce the rate of pay for participating musicians. The packets also describe the orchestra’s policies on a variety of issues. Musicians who wish to perform select one or more programs and sign a Musician Agreement Form. The agreement stated that musicians will work as independent contractors, they would be paid for each rehearsal or concert they attended, and there would be no taxes withheld from their pay. Participating musicians were also required to conform to the orchestra’s etiquette standards for both rehearsals and concerts. The union sought to represent the orchestra’s musicians and filed a petition for certification. The orchestra challenged the petition, arguing that its musicians were independent contractors and so had no right to join a union. An NLRB regional director concluded that the musicians were independent contractors and dismissed the petition. The Board disagreed. Emphasizing the orchestra’s substantial "control" over the musicians and their limited "entrepreneurial opportunity," as well as that the musicians’ work "is part of the Orchestra’s regular business," the Board concluded that they qualify as employees. The Board conducted an election, which the union won. The Orchestra petitioned for review, and the Board cross-applied for enforcement of its order. Agency principles. The Board must resolve the question of whether individuals claiming the protection of the NLRA are employees or independent contractors by reference to the common law of agency. In conducting that inquiry, the Board considers the factors set forth in section 220(2) of the Restatement (Second) of Agency. That section lists 10 factors. In addition to these factors, the Board looks to see whether the workers have a "significant entrepreneurial opportunity for gain or loss." Applying these factors to the facts of this case, the D.C. Circuit found that some pointed toward employee status, some toward independent contractor status, and one in no clear direction at all. Extent of control. The first factor—extent of control—supported employee status. Here, the evidence demonstrated that the orchestra regulated virtually all aspects of the musicians’ performance, including during rehearsals. Moreover, the orchestra enforced those rules. Even more significant, the conductor exercised virtually dictatorial authority over the manner in which the musicians play. Thus, it was quite clear that the orchestra closely supervises "the means and manner of [the musicians’] performance." Business of employer. Two other Restatement factors also suggested that the orchestra’s musicians qualified as employees. First, their work "is a part of the regular business of the employer." Second, the musicians were in effect paid by the hour. Although the Musician Agreement provided that musicians were paid by the job, suggesting that they functioned as independent contractors, because they received additional pay for each 15 minutes that a rehearsal or concert exceeded two and a half hours, they were in effect paid by the hour. High degree of skill. On the other hand, three Restatement factors suggested independent contractor status. First, the occupation of musician clearly required a high degree of skill. Second, the orchestra engaged the musicians for only a short amount of time. Third, the Musician Agreement stated that musicians work as independent contractors and that the orchestra would not withhold taxes, suggesting that both parties "believe" that the musicians are independent contractors. Still one Restatement factor pointed in no clear direction. The musicians provided the most critical tools, their instruments, thus suggesting independent contractor status. However, "the Orchestra supplied the music, stands, chairs, and the concert hall," suggesting employee status. Entrepreneurial opportunities. With respect to the musicians’ "entrepreneurial opportunities," the Board considered whether putative contractors have significant entrepreneurial opportunity for gain or loss. Can purported contractors have the ability to work for other companies; can they hire their own employees; and have a proprietary interest in their work? Here, the record revealed few "characteristics of entrepreneurial potential." The musicians cannot contract to fill multiple chairs, nor can they "assign or sell their place in the symphony, or hire someone to fill their seat at any given rehearsal or performance." Although musicians are free to decline performances, this limited entrepreneurial opportunity provided only miniscule support for independent contractor status. The court in this instance did not decide how it should classify the musicians in the first instance, but only whether the Board confronted two fairly conflicting views. Because it did, case law required that the appeals court defer to the Board.

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