Agent: The Arm of a Principle, but Not Necessarily the [Stage]hand

On February 14, 2016, the Eleventh Circuit vacated a decision of the National Labor Relations Board (the Board), finding that the Board incorrectly applied the common law of agency to Crew One, a stagehand referral company in the Atlanta area. See Crew One Productions, Inc. v. National Labor Relations Board, No. 15–10429, 2016 WL 403201 (11th Cir. Feb. 3, 2016). The Board previously determined that, because the stagehands were employees, the Board had the authority to regulate their employment relationship with Crew One. Crew One petitioned the Eleventh Circuit for review, and the International Alliance of Theatrical Stage Employees, the representative of the stagehands, cross-applied for enforcement.

The court began by outlining Crew One’s business practices. To provide its referral service, Crew One enters into contracts with event producers for a specific number of stagehands in exchange for an hourly price. Crew One then emails all stagehands on its database, offering jobs on a first come, first serve sign-up basis. Individuals interested in joining the database must fill out a questionnaire, attend a short orientation, and sign an “Independent Contractor Agreement.” Id. at *1–2. On the job site, the tour personnel supervise the stagehands.

Because the facts were undisputed by the parties, the court began its analysis by noting that they would only review “whether the Board correctly applied the law.” Id. After outlining the applicable agency law, citing the Restatement (Second) of Agency § 220(2), the court addressed the five errors made by the Board. First, where the Board found that Crew One controlled the stagehands, the court found that Crew One lacked control and noted that this was the most important factor in the agency analysis. Second, the Board should have given stronger weight to the fact that Crew One did not withhold taxes from the stagehands. Third, while the Board gave less weight to the Independent Contractor Agreements, the Court held these documents were strong evidence of the parties’ intent to create an independent contractor relationship. Fourth, the Board should not have considered the fact that stagehands could not negotiate their pay because bargaining power is not evidence of employee status and because the findings were not supported by the record. Fifth, while the Board determined that the stagehands performed a necessary function for Crew One, the relevant inquiry was whether the work was part of the regular business of the company, and the court found that stagehand work was not the regular work of Crew One.

Next, the court pointed out three factors that the Board correctly applied. First, the fact that stagehands provide their own equipment is evidence of an independent contractor relationship. Second, the stagehands received no benefits from Crew One, which evidenced that they were independent contractors. Third, while Crew One had workers’ compensation insurance, the fact that clients requested the insurance and also paid the fee for the insurance provided evidence that the stagehands were independent contractors.

Finally, given the lack of control and the insurance provided by the clients, the court held that the stagehands were not employees of Crew One, but independent contractors.

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