Open The Labor Umbrella

Dmitri Iglitzin
February 14, 2007

Dmitri Iglitzin is a labor law attorney with the firm of Schwerin Campbell Barnard & Iglitzin, in Seattle, Washington, and is an Affiliate Professor of Law at the University of Washington School of Law.

In 1999, the 50 or so musicians who made up the orchestra portion of Seattle, Washington's Civic Light Opera (CLO), a musical theatre company, decided that they wanted to join the local union affiliate of the American Federation of Musicians, the national union representing musicians. At least 80 percent of these musicians signed authorization cards stating that desire.

They never got their union, however. Nor did they get to vote in an election on the issue. Because of a little-known flaw in the primary federal labor law, the National Labor Relations Act (NLRA), employees of theater orchestras which, like the CLO, have a gross annual revenue of less than $500,000, and employees of symphony orchestras which have a gross annual revenue of less than one million dollars, are deprived of the protections otherwise provided by that law, and therefore have no legal right to either form or join a union.

What's more, the CLO, like a lot of employers, uses workers who are employed on a part-time or irregular basis. These workers are categorized as independent contractors, not employees, even though the workers clearly met all of the criteria for employee status. Under federal law, independent contractors not only have no right to unionize, it can be crime for them to even work together collectively to improve their pay and working conditions.

This same story, or a variation on it, is repeated daily in this country. It is not merely relatively small orchestras which avoid the obligations of the NLRA, but all small employers. According to a 2002 report from the United States General Accounting Office (GAO), about 5.5 million employees are excluded from the protections of the NLRA as a result of the “small employer” exception.

Nor is the CLO unique in seeking to avoid its obligations through classifying its employees as independent contractors. Nationally, independent contractors numbered about 8.5 million in 2002. An earlier study by the GAO found that about 15 percent of that number were actually wrongly classified, and should have been treated as employees.

Some workers, it is true, may prefer to be classified as independent contractors because of the short-term tax advantages. The overwhelming majority, however, would be far better off were their employers to provide them with the social security, unemployment insurance, workers compensation and other benefits to which they are entitled. And more and more workers have become aware of that fact.

In just the last year, drivers who work for the Federal Express company have filed 40 class action lawsuits in 27 states claiming that they have been misclassified as independent contractors. By classifying its drivers as independent contractors instead of employees, Federal Express has not only avoided having to comply with a variety of minimum wage and overtime laws, unemployment compensation laws and workers compensation requirements, it has effectively prevented those drivers from being organized by, among other unions, the Teamsters Union, which has long represented similar workers at Federal Express competitors such as United Parcel Service and DHL.

Factor into these flaws in federal labor law the fact that, as concluded in a recent report by the Center for Economic and Policy Research, approximately one in five employees who engages in union organizing is likely to be fired as a result of that activity. Consider also that earlier studies indicating that 30 percent of employers fire pro-union workers. It is no wonder, then, that according to the most recent data issued by the U.S. Bureau of Labor Statistics, union membership nationally fell by another 326,000 in 2006, to 14.5 million workers or a total of 12 percent of the workforce, down from 20 percent of the workforce in 1983 and 35 percent in the 1950's. Unionization in the private sector slipped to 7.4 percent, the lowest in a century.

At the federal level, efforts are being made to address these problems through passage of the Employee Freedom of Choice Act, which would make it easer for employees covered by the NLRA to unionize and obtain a first contract. Even should that legislative effort be successful, however, it will do nothing for either employees of small businesses generally, or small orchestras in particular. And it will do nothing for workers who are wrongly classified as independent contractors.

Something can be done about this problem at a state level. States can lawfully regulate the labor relations of those employers not covered by the NLRA. New York State has already done so, enacting a meaningful law which permits employees of employers outside of the NLRA's scope to obtain a union either through a secret ballot or through presentation of signed authorization cards from a majority of the workers. Wisconsin’s Employee Peace Act similarly regulates private employers who fall through the cracks of the NLRA. Several other states, such as Arizona, Idaho and California, have provided certain collective bargaining rights to agricultural workers, who are categorically excluded from the NLRA no matter how large their employer may be.

States could also crack down on the misclassification of employees as independent contractors by enacting laws which would permit workers thus mistreated to recover a substantial sum of money, such as treble damages and attorneys fees. This would ameliorate a number of ills: Such misclassification not only deprives employees of their right to join or support a union, it also deprives them of their rights under minimum wage, overtime, unemployment and worker disability insurance laws and programs.

Under the present law, workers who try to exercise the internationally recognized right to form and support trade unions risk everything. When the musicians of the CLO did what workers have always done when they have no other recourse—strike—they did so without any of the protections they would have had were they deemed employees protected by the NLRA. Their employer responded to this job action by firing all of the striking musicians, which was completely legal under both state and federal law.

Not only did the musicians end up with no union—they ended up with no jobs. A sad commentary, indeed, on the limited scope of labor protections in this country, and a story which will be repeated many times until appropriate action is taken at the state level.