Indie Contractors in the New Economy: In the Name of Industrial

Peace

Socio-Legal Perspectives in Labor Law (Fall 2013)

Professor Eric Fink

Elon University School of Law

Final Paper and Upper Level Writing Requirement

Shoshanna Silverberg

ssilverberg@elon.edu

INTRODUCTION

In this paper I look at labor relations in the New Economy, and

trace out ways in which these relations reflect both social

progress for workers as well as certain major limitations. A

prime example is the plight of independent contractors in the New

Economy. The issues this demographic faces begins with the

misclassification of workers purposely by employers in order for

them to avoid the responsibilities that come with being an

employer. The issue is further complicated by the changing

landscape of today’s economy and the different ways in which

people are provided with opportunities to work. Some are more or

less forced into ‘self-employment’ while others elect to be

‘freelancers.’ Conflict emerges when the ethos of workers now is

tantamount to the ethos that drove a movement toward worker

protections under federal legislation in the first place, namely

through the National Labor Relations Act. For these workers,

promoting industrial peace through innovative business practices

and nontraditional forms of employment is at the heart of their

self-organization. And yet, under labor law, they are left

without many of the protections which other workers whose

livelihoods are equally precarious as ‘employees’ are afforded.

This paper seeks to highlight these issues and propose several

ways that the needs of these workers may be addressed.

BACKGROUND

THE WAGNER ACT: HISTORY AND PURPOSE

The Wagner Act, also known as the National Labor Relations

Act (NLRA), was passed in 1935 and sought to promote

industrial peace.1 To achieve this it encouraged collective

bargaining and unionization.2 The “heart” of the Act

(Section 7) provides employees with three distinct statutory

rights: (1) to organize; (2) to bargain collectively through

a representative of their own choosing; and (3) to engage in

concerted activities for mutual aid and protection (which

includes strikes, pickets, and boycotts, which are protected

in Section 13).3 The National Labor Relations Board (NLRB)

was established in Sections 3 and 4, with the procedures it

1 See “Not a Limited, Confined, or Private Matter – Who is an ‘Employee’ Underthe National labor Relations Act,” by Ellen Dannin, Labor Law Journal, 2008.2 Secunda, Paul M. and Jeffrey M. Hirsch, Labor Law: A Problem Based Approach, Chapter 1: Struggle for Control Over Employment Relationships at 16.3 Secunda and Hirsch, Chapter 1 at 16.

must follow set out in Section 10. The idea was for the

NLRB to be the primary arbitrator of justice between workers

and management, with the federal court system picking up

particularly complicated or controversial cases on appeal.

The Wagner Act was amended in 1947 by the Taft-Hartley Act.

The aim of Taft-Hartley was to re-orient the Wagner Act in a

more favorable lean toward employers.4 This came shrouded

in the belief that union abuses were too rampant for labor

law to tolerate.5 A taste of what the amendment offered is

found in Section 7, which was modified to explicitly give

employees the right to refrain from organizing, collective

bargaining, and engaging in concerted activities for

workers’ mutual aid and protection.6 Another example is the

explicit duty the amendment imposed on unions—and by

extension on workers—to bargain in good faith.7 Taft-

Hartley also distinguished independent contractors from

4 See Vinel, Jean-Christian, The Employee: A Political History, University of Pennsylvania Press, Philadelphia: 2013 at 123-24.5 See Secunda at 16.6 Id. at 18.7 Id. at 18.

employees and excluded the former from the protections of

the Act.

CURRENT DEBATES

One debate that has raged since the New Deal and that

continues to be prescient today is how independent

contractors are distinguished from employees. The issue

here is who is afforded protections under the Wagner Act for

organizing, collectively bargaining, and engaging in mutual

aid and protection. More specifically, the issue is who was

originally intended by Congress to receive the protections

of the Act, and where do the needs of a larger and larger

independent contractor population fit into the intent of the

Act today?

This question has animated discussions of unionization and

union activity since 1935, even more so since 1947, and can

be examined in the New Economy by looking at New York’s

Freelancers Union. The FU is comprised of tens of thousands

of independently contracted knowledge workers (i.e. not

employees) into a “union” that provides little but health

insurance and the comeraderie afforded by an alliance of

workers across many industries and from a range of income

levels. This union illustrates the contemporary landscape

of labor and one way that people are self-organizing in the

New Economy.

This brings us to the question: should a union of

independent contractors be afforded the same protections as

employees who are similarly situated? Some would argue that

these two groups are not similarly situated, or they would

not be classified differently under the law. However,

consistency has not been a hallmark of labor law in this

regard. Courts have found workers to be employees in a

spectrum of circumstances, as have they found workers to be

independent contractors in a variety of settings, and under

a variety of working conditions. This is another facet of

the employee-independent contractor debate that will be

discussed in this paper.

Within this discussion is an implicit debate about the

proper role of congressional intent in the interpretation of

employee status under the Wagner Act. On one hand, we hear

union-friendly voices urging a return to the original intent

of the Act, when empowering workers to self-organize in the

interest of industrial peace was at the heart of the

legislation.8 This is a broader type of analysis that tends

to be sympathetic to the activity of unionization. It views

“industrial peace” as best served by empowering workers to

self-organize.9 On the other hand we have advocates of a

different type of congressional intent, one manifested in

the passage of Taft-Hartley, which sought to limit what

organizers could lawfully achieve under the Act. This

perspective lends itself to an essentially more narrow

analysis, where it is common for a worker’s status to be

determined “independent” even if there is reason to believe

that allowing that worker to unionize would be in the

service of dismantling a traditional worker-servant

8 See Dannin.9 Id.

relationship, thus promoting industrial peace. 10

Ultimately, there seems to be a conflict between what makes

for industrial peace, and whether it is the livelihood of

workers that constitutes it or the maintenance of a

hierarchical financial status quo.

Finally, this begs the question, what is the status quo in

today’s world? What types of social enterprises typify

business practices in the New Economy? What roles are

workers occupying and how do their roles in society match up

with the protections they are or should be afforded under

labor law, specifically, under the Wagner Act? To begin, we

will look at the ethos underlying the “new economy.”

LANDSCAPE OF THE ‘NEW ECONOMY’

Tara Gentile is a gen y blogger who writes and consults on

growing businesses in the “new economy”. In her post, “You are

the New Economy: Meaning, Experience, and Connection as Commerce

10 See Zatz, Noah D., “Beyond misclassification: tackling the independent contractor problem without redefining employment,” The Labor Lawyer, 26.2 (Winter 2011).

in the 21st Century,” she cites the euphemism Bruce Nussbaum

(founder of Fast Company) uses—‘indie economics’-- which she re-

names ‘you-centered economics’ to describe her subject.11 12 She

states, “[y]ou are not used to being at the center of the

economy. You have not been the linchpin of economic growth. You

have been a mere cog in the machine. You were a commodity to be

traded.”13 She goes on. “You are becoming the heart [and] soul

of a new engine of economic growth. You are influencing giant

corporations through your words [and] actions. You are forming

microbusinesses and taking earning into your own hands. You are

less dependent on ‘the system’ and more dependent on your

community.” She also states, “[b]ut ‘you’ doesn’t just mean you.

‘You’ is also ‘the other.’”14

11 For more on Nussbaum or “indie economics” see “6 reasons why ‘indie capitalism’ is on the rise,” by Joe McKendrick, June 28, 2013, www.smartplanet.com/blog/bulletin/6-reasons-why-8216indie-capitalism-is-on-the-rise/23110.12 “The Rise of Indie Captialsim,” by Bruce Nussbaum, February 26, 2013, www.businessweek.com/printer/articles//98850-the-rise-of-indie-capitalism13 “You are the New Economy: Meaning, Experience, and Connection as Commerce in the 21st Century,” blog post by Tara Gentile, www.targentile.com/indie-economics/

14 Id.

Gentile characterizes the New Economy as a paradigm of thought

that promotes the understanding that “a business is nothing if it

doesn’t serve a greater good. All business is social

entrepreneurship . . . All business has an obligation to create a

legacy of sustainability, creativity, innovation, and service . .

. Businesses serve people. People do not serve businesses.” I

suggest that the ethos Gentile is describing is both at the heart

of New Economy business models and the changes we are seeing in

the re-organization of labor and labor relations as well.

Bolstering this idea, in an online discussion of radio station

KCRW’s segment featuring “The Rise of the Sharing Economy,” one

participant referenced the interlocked meaning of “possessions,

ownership, mental stability and happiness” and commented that

“every single thing any psychologist or human behavioral expert

will tell you about ownership of consumerable goods, is that they

don’t make you happy. Ever.”15 This belief seems to belie the

New Economy concept of labor. The empty production of goods to

15 www.kcrw.com/news/programs/tp/tp130902the_rise_of_the_shar

facilitate an empty consumption of goods is becoming increasingly

anathema to many.

Along this same line, it seems “work” is no longer being defined

by what one performs for the pure satisfaction or benefit of an

employer. “Labor” is something people want to be engaged in, and

the basis for more and more people’s participation in unions has

less to do with their relationship with an employer, or the

nature of the work that someone does--and by extension wages and

working conditions—than it has to do with facilitating a more

existential type of connection and support for everyone involved.

It is almost as if the ethos of the labor movement of the 1930’s—

with its emphasis on solidarity-- has evolved into an ethos that

is more broadly influencing people’s participation in society.

Except now the idea of solidarity has been supplanted by the

concepts of creativity and sustainability.

The futurist Paul Saffo once predicted a new ‘creator economy’

replacing the industrial and consumer economies.16 Social

16 “4 Reasons Why the Future of Capitalism is Homegrown, Small Scale, And Independent,” by Bruce Nussbaum, December 5, 2011,

entrepreneur, Bruce Nussbaum, who has written widely on the New

Economy, likes ‘indie capitalism’ because “it captures more of

the social context and values of this new economy.” He writes:

I especially like ‘indie’ because the indie music scene reflects many of the distributive and social structures of this emergent form of capitalism. It’s no accident that Portland and New York have vibrant indie music scenes and arethe centers of a rising new indie capitalism . .. [Especially in light of the Occupy movement,] I think that . . . [i]ndie capitalism could be the kind of reinvigorated capitalism that we canall believe in again. To make it really work, we might need a new indie economics (of creativity and innovation), plus a new indie setof political policies.17

Nussbaum points out another characteristic of ‘indie capitalism’

-- “a heightened meaning embedded in materials and products.” He

writes that the “entire notion of brand is upended in indie

capitalism, superseded by the community surrounding the creation

of a product or service. Authenticity is the ‘brand’ in many

cases.” This is interesting for a number of reasons, but one is

Nussbaum’s use of the term embeddedness, and the salute he is

http://www.fastcodesign.com/1665567/4-reasons-why-the-future-of-capitalism-is-homegrown-small-scale-and-independent

17 Id.

implicitly giving to social theorists of the past, such as Karl

Polanyi.18

Nancy Fraser, a New School Professor who writes about the re-

framing phenomenon going on in various strands of political

activism of the New Economy, observes the need for a ‘third

movement’—one that is both a departure from and a rail against

the neoloberalism that has marked political upheaval in earlier

generations. She calls this movement emancipatory and, “like

Polanyi’s [double movement], the triple movement serves as an

analytical device for parsing the grammar of social struggle in

capitalist society.”19

For Fraser and other theorists in Polanyi’s lineage,

marketization on the one hand and social protection on the other

constitute the original ‘double movement’. The third would then

be some sort of reaction against yet means to enfold and overcome

both of these. The triple movement would be a way for workers to

18 See Karl Polanyi’s seminal work The Great Transformation: The Political and Economic Origins of Our Time, Rinehart, New York: 1944.19 Fraser, Nancy, “A Triple Movement? Parsing the Politics of Crisis after Polanyi,” New Left Review 81, May-June 2013.

use the social progress that has allowed them to work in a

broader and broader spectrum of ways, and leverage this increased

sense of freedom in connection with others who identify with it,

and collectively, use ‘work’ as a form of resistance. In other

words, for authenticity, as Nussbaum puts it, to be embedded in

the New Economy, is for work itself to be becoming, as Fraser

puts it, emancipatory. Thus, the New Economy is about making

‘work’ work for people, and not against them. It is about labor

serving as a vehicle for personal growth, and, embedded in that,

is a possibility for work to, perhaps subversively, promote

industrial peace. 20

Some have criticized the burgeoning “indie” approach to

capitalism for being nothing other than what it purports to be

undermining or subverting. Examples here include Airbnb and

TaskRabbit, companies that trade on the power of collaborative,

embedded means to achieve what some call nothing but the same

kind of profit every other capitalist machine is invented to

20 See also “From Polanyi to Pollyanna: The False Optimism of Global Labor Studies,” by Michael Burawoy, Global Labour Journal, Vol 1, Issue 2, 2010; and “Globalization and Contestation: A Polanyian Problematic by Ronaldo Munck, Globalizations, Vol. 3, No. 2, June 2006.

“create.” Blogger Tom Slee claims Airbnb and TaskRabbit exploit

the term “sharing economy”—another name for what is afoot in the

New Economy--and convert it into terms such as “peer power.” By

doing so, he argues these capitalists are appropriating what Slee

seems to regard as a truer from of a solidarity/sharing ethos and

propagating a business model that is at its core no different

from large corporations with no purported desire to advance

collaborative cultural values.21 This goes against the very

grain of a “new” economy.22

In this same vein, George Smith (webmaster at “dick destiny”)

wrote in a 2013 blogpost entitled “Culture of Lickspittle,

Decline and Fall, that “[t]he destruction of payment for recorded

music was the first grand achievement of the sharing economy.”

He says that “placed within the larger context of how inequality

21 “Why the Sharing Economy Isn’t,” by Tom Slee, August 30, 2013, http://tomslee.net/2013/08/why-the-sharing-economy-isnt.html

22 Another blog post, this one by Lita Kurth, quotes an interview subject about employees/independent contractors working for TaskRabbit: ‘They have no insurance. They walk into unknown situations and often get paid less than minimum wage to do unthinkable tasks. This person found themselves knee deep in cat diarrhea.’ “No minimum wage is required, no one is monitoring the posters for truthfulness about the task (all they need is an email and a credit card).” See “Destroying Labor Law in the ‘Sharing Economy’” at www.classism.org/destroying-labor-law-sharing-economy.

is [so] high in the US . . . those with access to the means of

the sharing economy employ it to take larger and larger pieces from

an economic pie through divestment from fair compensation for

labor.” “More gallingly,” Smith intones, “you can surely say

that Apple and iTunes store funneling digital music purchases

through a country with a legal mechanism for tax evasion is

innovation. And Google’s development of YouTube as a service that

provides a great deal of free pirated music with the salve that

by attaching a link to a copy of it at the iTunes store is

certainly some kind of wee innovation. But you can also call

such things parasitic or predatory.”23

To clarify, this concept of ‘peer power’ and the term ‘sharing

economy’ are euphemisms being used, as bloggers such as Slee and

Smith point out, to describe both the actions of worker-consumers

and the larger movement these actors’ habits and decisions are

creating.24 “Collaborative consumption” is another term of art 23 CAHY: Labor the ‘sharing economy’, by George Smith (webmaster at dick destiny) on Culture of Lickspittle, Decline and Fall, July 5, 2013 (dickdestiny.com/blog1/?p=15540)

24 Other terms being used are “solidarity economy,” “gig economy,” “collaborative economy,” “informal economy,” “hustling economy,” “circular economy,” “anarchy economy,” and “guelaguetza,” as practiced in Oaxaca, Mexico.See http://civic.mit.edu/blog/hidenise/terminology-101-a-glossary-for-the-

that has gained cache, popularized by Rachel Botsman in her book

What’s Mine is Yours. As MIT Center for Civic Media blogger Denise

Cheng explains in her “Glossary for the Sharing Economy,”

collaborative consumption “is an economy where there is net-zero

production. On a company level, this looks like the upfront cost

of equipment that will be rented out countless times, what

Botsman calls a ‘product service system’ (think car sharing or

bike sharing). On an individual level, this could be renting out

a spare room or other idling asset. [But i]n both of these

situations, continual production is avoided.”25 26

What this trend also avoids is placing one’s trust in a company

that promises to provide a service or product. Instead, one is

connected with other individuals who have needs compatible with

her own. This transaction allows for both parties to get what

they need at minimal cost and with non-traditional profits—that

is, profit in terms other than dollars. In fact, Botsman argues

sharing-economy.25 http://civic.mit.edu/blog/hidenise/terminology-101-a-glossary-for-the-sharing-economy26 For more on Rachel Botsman’s work see http://www.ted.com/talks/rachel_botsman_the_case_for_collaborative_consumption.html

that the very currency of the New Economy is trust.27 And she is

not alone.

Ulf Zimmerman wrote a book review of three recently published

volumes: Frans de Waal’s The Age of Empathy: Nature’s Lessons for a Kinder

Society; Jeremy Rifkin’s The Empathic Civilization: The Race to Global

Consciousness in a World in Crisis; and J.D. Trout’s The Empathy Gap: Building

Bridges to the Good Life and the Good Society.28 Zimmerman himself is a

leadership and ethics professor at Kennesaw State University in

its MPA program. One of the points Zimmerman discusses from de

Waal’s book is that today, “one year’s peasant could be another

year’s prince—or at least ‘industrial baron’,” (498) and that

“[s]elf-interest and wealth do not suffice, [de Waal] aptly

reminds us, to make a society successful; surveys consistently

show that the greatest happiness is found not in the wealthiest

nations but in those with the highest levels of trust among

citizens.”29

27 http://www.ted.com/talks/rachel_botsman_the_currency_of_the_new_economy_is_trust.html28 Zimmermann, Ulf, “Empathy, Ethics, Emotional Labor, and the Ethos of Democracy,” Public Administration Review, May/June 2011.29 Id.

Zimmerman notes Rifkin’s observation that “we do not seek

autonomy [even as infants] so much as companionship.”30 “Thus,

survival of the fittest is ‘as much about pro-social behavior and

cooperation as physical brawn and competition’ (81).”31

Elucidating a common thread connecting all three of these

authors’ work, Zimmerman surmises that “the purpose of freedom is

[therefore] not just to attain autonomy, but to fulfill life

through companionship, affection, and belonging, and this freedom

is based on trust.”32

Going further, Zimmerman notes that “Americans have ‘the pursuit

of happiness’ . . . and one could read Trout’s book as making the

case that more empathic government and policies would facilitate

that pursuit.”33 Another way of looking at this is from de

Waal’s view that “Thomas Jefferson’s formulation of ‘all men’s’

unalienable rights to life, liberty, and the pursuit of happiness

added the notion that are creatures in search of self-fulfillment30 Id.31 Id.32 Id.33 Id.

—a new narrative that yokes together rationalism and romanticism”

(499). This, he says, “gave rise to a new surge of empathy that

corresponded to the takeoff of the Industrial Revolution.”34 De

Waal goes on to explain:

For Rifkin, a second Industrial Revolution had an equally large impact onour empathic consciousness: ‘The coming together of the electricity revolution with the oil-powered internal combustion engine would give birth to a new communications/energy regime and bring with it still another leap in human cognition’ (366). Telephones and automobiles quickened the pace of life, allowing the average individual to become much more widely enmeshed in social networks. This led to a leveling of social hierarchies, a democratization of human experience, as we were increasingly exposed to others, and, while we looked more into ourselves, we also looked more at them. This new self-reflective psychological age ‘peaked in the 1960s and 1970s with the surge of the counter-culture and social activism among the baby-boom generation’ (366).”35

Now, de Waal offers, “we are in the ‘age of empathy’ and, by way

of illustration, [Rifkin] cites the virtually global mourning of

the death of Princess Diana. More concretely, today the majority

of people live in urban areas, which increases cosmopolitanism,

signifying an increasing appreciation of diversity,” and

[a]nthropologists contend that social exchange always precedes

commercial exchange—that is, trust building precedes capital

building (499-500).” Here, we begin to verge on Ronald

34 Id.35 Id.

Inglehart’s theory of ‘culture shift’ “from materialist to

postmaterialist . . . which mirrors this shift to more empathic

consciousness (500).”

In this vein, “Rifkin sees . . . our only hope in a ‘Third

Industrial Revolution’ with ‘distributed energies’ and

‘distributed capitalism,’ . . . which is . . . more about sharing

and collaboration than about competition, as we already have seen

in phenomena such as Linux and the whole new information and

communication technology….”36 De Waal summarizes by stating,

“[t]here will still be money made, but by selling not a CD but

access to a time segment of music, not be selling a set of the

Encyclopedia Britanica but access to it, not, to add an even more

salient example I have seen, by buying or renting a car, but by

‘sharing’ a Zipcar . . ..”37 38 Claims that the rise of Wikipedia

and the Open Source software movement illustrate the recent

emergence of “large-scale peer production and the growth of gift

36 Id.37 Id.38 For a more nuanced analysis of Zipcar see Harvard Business Review blogpostshttp://blogs.hbr.org/2013/01/from-zipcar-to-the-sharing-eco/ and http://hbr.org/2010/10/beyond-zipcar-collaborative-consumption/

economies” have been made by others as well.39 These all hinge

on a sense of opening at the heart of what we regard as “the

economy.” No longer is our trust in democracy tethered to what

‘the economy’ can do for us or what we must do for it. Rather,

individuals’ pursuit of happiness and prosperity is more and more

tied up in the ethos of what we can collectively achieve as

participants in the New Economy, both as workers and as

consumers.

The ethos we are discussing, that is now at the heart of

economics for many citizens of this country, strikes a similar

chord to what the ethos was for labor organizing in the 1930’s.

Here we shift gears and begin to look at the landscape of unions

in the New Economy.

UNIONS IN THE ‘NEW ECONOMY’

Only 6.9 percent of private sector workers are now in unions.

This percentage is lower now than it was at the start of the

39 Stigmergic Collaboration: The Evolution of Group Work, by Mark Elliott, 9 Media Culture Journal 2, May, 2006 (http://journal.media-culture.org/au/0605/03-elliott.php

Great Depression.40 Only 12.3 percent of American wage and

salary workers belong to unions today, according to the Bureau of

Labor Statistics, down from a peak of about one-third of the work

force in 1955.41 Popular setiment toward organized labor is also

at an all-time low of 45%.42

In a recent online discussion, Bill Moyers asked his listeners,

“with corporations continuing to put the squeeze on employees,

with joblessness and inequality rampant, now would seem the

perfect time for people to turn back to unions to fight for them

against the monied interests. Why haven’t they?”

One response to Moyers’ question came from Diane Kalen-Sukra, “a

self-described ’20-year veteran of labor and union rep for N.A.’s

largest unions.’” She wrote:

Everybody knows that union density and power has been on a steady decline for the past 30 years. Like a fighter past his prime, we spend a lot of time

40 Bill Moyers - Full Show: Is Labor A Lost Cause? July 6, 2012, billmoyers.com/wp-content/themes/billmoyers/transcript-print.php?post=1031741 “When Unions Mattered, Prosperity Was Shared,” by E.J. Dionne Jr., The Washington Post, Monday, September 6, 2010.

42 “The ‘I’ in Union, by Atossa Araxia Abrahamian, Dissent Magazine, Winter 2012.See www.dissentmagazine.org/article/the-i-in-union.

remembering and reminding others [of] our past battlesand achievements—the eight hour workday, employment insurance, and social security to name a few. Trade union policy papers endlessly blame this decline on the severity of the neo-liberal attack on the social welfare state, unions and workers’ rights and encourage ways to address this by supporting progressive politicians, organizing the unorganized and encouraging young workers to ‘get involved’… Why is it, for instance, that the Occupy movement was ableto do more to educate, inspire and change the public is discourse around social and economic inequality, the corporate agenda, the casino economy and threats to our democracy, in the first few months of its relatively unorganized and unfunded existence, than the entire labour movement, with its wealth, army of researchers and octopus-like communications apparatus,was able to do in a generation?

Another contributor wrote, “[s]mall farmers, small business

owners, freelancers and others who work in the gig economy need

to be recognized as workers, too.43 Unions in the US focused on

large industries and the public sector, and when small business

people are considered at all, they are lumped together (as

employers or potential employers) with the large corporations,

rather than seeing they have much more in common with workers.”

Moyers engaged further on this topic with Stephen Lerner, a long-

time community organizer and architect of the Justice for

43 “Gig economy” is another term used to describe the New Economy – see Chang,Miniglossary.

Janitors campaign, and Bill Fletcher Jr., a Harvard Law alum who

has worked as a shipyard welder and become an activist fighting

for racial justice and union democracy. Both have also worked

with the SEIU. Lerner opens the conversation by stating that

“[t]he question is less is it the right moment to organize, but

what are the ways we organize and what are the things that we

have to start doing that really let us take on corporate power.”

In response to Moyers’ question, “Why isn’t th[e current moment

in history] the opportunity for an old fashioned, good old fight

for the working people?” Lerner says, “We need . . . [a] new

level of vitality, a new level of tactics, new strategies, new

forms of organization that we have not previously used. That’s

where we are.”44

There are many claims against the practices if not the role of

traditional unions. There is a sentiment that the old economy’s

approach to unionizing “demand[ ] that union employees tolerate

their own exploitation as a necessary condition of working to

44 Bill Moyers - Full Show: Is Labor A Lost Cause? July 6, 2012, billmoyers.com/wp-content/themes/billmoyers/transcript-print.php?post=10317

free others from exploitation.”45 This might be referred to as a

“’[s]hit happens’ defense, a less ideologically charged cousin of

the appeal to shared sacrifice.”46 Also to this point, it has

been said that “[t]rue unionists tend to (rightfully) view staff-

run unions as oligarchies, disconnected from the concerns of

their members and little better than other hierarchical private

entities.”47 And that “[i]f workplace democracy is to survive

and grow over the next few decades, it requires the cooperation

of a diverse coalition in its favor. Firm principles unify such

coalitions. Unions abandon them at their peril.”48

While it seems there are traditional unions and union organizers

who are out there organizing workers in tune with the views

espoused above, the intricacies of this approach to organizing,

the success rates and the challenges are beyond the scope of this

paper.49 However, other responses to these concerns are within 45 “When the Union’s the Boss,” by Ned Resnikoff, jacobin/a magazine of culture and polemic, jacobinmag.com/2013/04/when-the-unions-the-boss/ 46 Id.47 Id.48 Id.49 For a great synopsis of what is happening in this regard (i.e. using WorkerCenters) see Confronting the Gloves-Off Economy: America’s Broken Labor Standards and How to Fix Them, edited by Annette Bernhardt, Heather Boushey, Laura Dresser & Chris

the scope of this paper, and they can be addressed by what

Freelancers Union Founder, Sara Horowitz, calls “new mutualism.”

Horowitz leads one of the nation’s fastest-growing labor

organizations and expects to hit the one million member mark

within three years. This growth is occurring amidst high rates

of unemployment, and parallels the decline of union membership

across Labor’s traditional strong hold industries, such as

construction and manufacturing.

Because the Freelancers are, by definition of being

“freelancers,” not employees, the Union does not bargain with

employers. What it does do, however, is provide what members

deem their number one priority: affordable health insurance.

Horowitz says that having health insurance makes it far easier

for her members to be part of what she calls the ‘gig economy.’50

We may also think of this as what some, like Nussbaum, calls the

‘indie economy,’ and what Gentile describes as the “new economy.”

Tilly; written by Scott Martelle and published by the Labor and Employment Relations Association in 2008.50 “Tackling Concerns of Independent Workers,” by Steven Greenhouse, The New York Times, March 23, 2013.

Horowitz is adamant that the FU “is indeed a labor union because,

like other unions, it is a large, influential, self-supporting

organization of workers that pushes to advance their interests,

[even though] its members work for numerous employers in many

industries.”51 Janice R. Fine, a professor of employment

relations at Rutgers University, says, “It reminds me of the old

guilds […] that focused on workers’ individual autonomy, trying

to build their own careers, with the backing of a collective

organization to assist them.”52 Yet in lockstep with the

buzzwords various economists and business types are coining to

describe the New Economy, a colleague of Horowitz’s characterizes

her as “more like an entrepreneur than an old-style union

leader.”53

WHO IS BEING SERVED AND WHY THIS DEMOGRAPHIC IS IMPORTANT

Horowitz, was shocked when she was hired by a Manhattan law firm

twenty years ago and found out the firm intended to treat her not

51 Id.52 Id.53 Id.

as an employee, but as an independent contractor. As the New

York Times reports it, “She [then] realized that she was part of

a trend in which American employers relied increasingly on

independent contractors, temporary workers, contract employees

and freelancers to cut costs. Somewhat bewildered and somewhat

angry, she and two other young lawyers who were also hired as

independent contractors jokingly formed what they called the

‘Transient Workers Union, with the facetious motto, ‘The union

makes us not so weak.’”54 Since then, her satirical union has

grown into a source to be reckoned with.

The FU recently conducted an internal survey to get a sense of

the socio-economic makeup of its membership. Findings included

the fact that 58% of FU members earn less than $50,000 per annum

(in New York), that 29% earn less than $25,000 annually, and that

12% received food stamps during the recession, many of whom were

college graduates in their 30s and 40s.55 Horowitz

contextualizes these statistics by stating, “In today’s economy,

54 “Tackling Concerns of Independent Workers,” by Steven Greenhouse, TheNew York Times, March 23, 2013.

55 Id.

there’s a huge chunk of the middle class that’s being pushed down

into the working class and working poor […] and freelancers are

the first group that’s happening to.” Again, not all of these

workers are freelancers by choice; in many cases companies have

pushed them into this status because they either cannot or will

not cover the costs requisite for hiring someone as an employee

rather than as an independent contractor. What is new though, is

how desperate for basic needs such as food and health care these

middle class “knowledge” workers have become.

Horowitz says her union addresses the needs of people who, like

her twenty years ago, have every hope of being actual employees,

but have been shut off from that possibility by companies whose

bottom lines are fattened by reducing its work force to part-time

hours or simply refusing to hire individuals if they are not

willing to work as independent contractors.56 This brings us to

a New Economy problem: the combination of misclassified workers

56 For support see Jost, Micah Prieb Stoltzfux, “Independent Contractors, Employees, and Entrepreneurialism Under the National Labor Relations Act: A Worker-by-Worker Approach,” 68 Wash. & Lee L. Rev. 311 (2011); also see Zatz, NoahD., “Beyond misclassification: tackling the independent contractor problem without redefining employment,” The Labor Lawyer, 26.2 (Winter 2011).

and self-selecting freelancers create a work force that is shut

out of the protections of labor law while these workers, however

privileged in certain ways, need these protections.

WORKERS WHO ARE CLASSIFIED AS INDEPENDENT CONTRACTORS

As Horowitz’s story demonstrates, one problem facing many workers

is misclassification. That is, the use of the term ‘independent

contractor’ to classify workers that might easily also be called

‘employees’ simply to fatten companies’ bottomlines. Companies

who misclassify their workers purposely in order to gain various

benefits of not having “employees” on their payrolls do so to

avoid certain federal and state taxes, and the obligation to

provide employee benefits such as health care, as well as

workers’ compensation or unemployment insurance contributions.57

It is true that independent contractors may enjoy various

benefits of the classification themselves, from being their own

bosses, to owning their own client lists, or even retaining

exclusive copyright ownership of any work they may create.58 59

57 Id.58 Id.59 See Comty. For Creative Non-Violence v. Reid, 490 U.S. 730 (1989).

The problem though is that while employees are afforded

protections in labor law—for activities such as providing mutual

aid and protection, collective bargaining, and conducting strikes

—independent contractors are not.

One way this issue presents itself is encapsulated below:

State and federal antitrust statutes currently render unlawful certain anticompetitive contracts, combinations, and conspiracies. While human labor is not considered to be a commodity subject to these laws, courts have found collective negotiation and concerted action by independent contractors to constitute illegal price fixing and an unlawful restraint on trade.60

Thus one major factor apart from the issue of benefits and taxes

that companies may bank on when deciding whether or not to

classify their workers as independent contractors is the threat

of unionization, which misclassification allows employers to

undermine or forestall.61

But there are other reasons for workers to be hired on as

independent contractors as well. Charles Heckscher, director of

60 See Jost.61 See Zatz.

the Center for Workplace Transformation at Rutgers University,

sits on the board of the FU and argues:

‘[C]ompanies have clearly and widely moved away from taking responsibility for long-term careers. These certainly include crude cost-cutting considerations, but they also reflect the deeper economic changes with skills and demand metamorphosing so rapidly in so many domains, it is often more effective to look for those with needed skills on the open market rather than developing them internally. Once companies begin to do that, they tend to break the whole pattern of expectations and commitments which grounded the classic system.’62

In The Precariat: The New Dangerous Class, professor of economic security

at the University of Bath, Guy Standing, explains that there are

three types of workers in the New Economy. These are the

‘salariat,’ who “hold steady, old-fashioned jobs at a fixed

workplace; the ‘proficians,’ who are highly educated and sell

advanced skills that have grown in value in the so-called

‘knowledge economy’; and the ‘precariat,’ for whom employment is

typically short-lived, uncertain, and delivered without a

benefits package.”63 In short:

62 See Abrahamian.63 Id.

[C]ompanies saw the benefits of using freelancers and began to do so in order to remain competitive. The trend remains strong: the most recent round of layoffs at the Los Angeles Times—where the paper’s entire book section was let go, then given the option to be re-hired without benefits—is a perfect, if localized, example of such cost-cutting. Desperate for work and unable to find any elsewhere, much of the staff stayed on.64

Standing says there is overlap between these categories, which we

can see in the statistical breakdown of the FU provided earlier.

The problem is, regardless of which category these workers fit

into, while they may enjoy to some degree their ‘precarious’

status, they must also suffer from a certain amount of

uncertainty professionally. They are workers who contribute to

the development of many diverse fields. They have typically

invested significant time and money in their educations, and

their ability to hold down consistent employment, let alone

employment that compensates them adequately to stay current with

their school loans or keep up with their rent or mortgages, is

severely compromised not simply by their choice to become

‘freelancers’ or their employers’ choices to hire them as

64 Id.

contractors, but by the nature of the New Economy. Labor

relations have changed, and people’s choices as far as how to

realistically support themselves, have also changed.

WHAT IT MEANS TO BE AN INDEPENDENT CONTRACTOR UNDER THE LAW

At base, an independent contractor is a worker who retains a

certain amount of control over her or his working

conditions, whereas an employee lacks a certain amount of

control.65 Labor law in the United States rests on this

distinction. While it would seem that the National Labor

Relations Board and the Supreme Court should be able to

easily separate the wheat from the chaff and decide these

cases of employee versus indie contractor in equitable

terms, historically the issue has been treated with anything

but clear-cut rules or certitude. To understand the

relevance of this issue today, we will take a look at the

NLRB v. Hearst Publications case of 1944.66

65 Bryan, Sarah P., “The fundamentals of independent contractors,” Labor & Employment Law, 40.1 (Fall 2011).66 NLRB v. Hearst Publ’ns, Inc., 322 U.S. 111 (1944).

In Hearst, the Supreme Court affirmed an earlier Labor Board

decision that Los Angeles newsies (“newsboys”) were indeed

employees under the Wagner Act. At least in large part, the

Court came to this conclusion based on an application of the

“common law agency test,” which it declared is not “simple,

uniform and easily applicable.”67 In fact, particularly out

of the attempted transfer of tort law principles determining

employment status to the field of labor law, Justice

Rutledge admitted, “[f]ew problems in the law have given

greater variety of application and conflict in results than

the cases arising in the borderland between what is clearly

an employer-employee relationship and what is clearly one of

independent, entrepreneurial dealing. This is true within

the limited field of determining vicarious liability in

tort. It becomes more so when the field is expanded to

include all of the possible applications of the

distinction.”68

67 Id. at 120.68 Id. at 121.

Justice Routledge went on to state that “congress had in

mind a wider field than the narrow technical legal relation

of ‘master and servant,’ as the common law had worked this

out in all its variations, and the same time a narrower one

than the entire area of rendering service to others.”69 He

wrote that the question as to who is considered an employee

and who an independent contractor “comes down . . . to how

much [is] included of the intermediate region between what

is clearly and unequivocally ‘employment,’ by any

appropriate test, and what is as clearly entrepreneurial

enterprise and not employment.” His sensitivity and the

sensitivity of the Court itself, seems to have been focused

on supporting the aims of a Congress that “sought to find a

broad solution, one that would bring industrial peace by

substituting, so far as its power could reach, the rights of

workers to self-organization and collective

bargaining . . . .”70

69 Id. at 124.70 Id. at 125.

Yet, “only partial solutions [c]ould be provided if large

segments of workers about whose technical legal position

such local differences exist should be wholly excluded from

coverage by reason of such differences.”71 If this

happened, or if the Court relied on too technical of a

definition that was not attenuated closely enough to the

particular facts of each one of its cases, “[t]he

consequences would be ultimately to defeat, in part at

least, the achievement of the statute’s objective.”72 With

this said, the Court’s rationale was that in Hearst, newsboys

were employees. It felt that “the broad language of the

[Wagner] Act’s definitions, which in terms reject

conventional limitations on such conceptions as ‘employee,’

[and] ‘employer,’ . . . leaves no doubt that its

applicability is to be determined broadly, in doubtful

situations, by underlying economic facts rather than

technically and exclusively by previously established legal

classification.”73

71 Id.72 Id.73 Id. at 129, citing NLRB v. Blount, 131 F.2d 585 (8th Cir. 1942).

Specifically, the Court found that newsboys were employees

because they “work[ed] continuously and regularly, rel[ied]

upon their earnings for the support of themselves and their

families, and ha[d] their total wages influenced in large

measure by the publishers, who dictate[d] their buying and

selling prices, fix[ed] their markets and control[led] their

supply of papers.”74 The Court’s decision was also based on

the fact that newsboys’ “hours of work and their efforts on

the job [were] supervised and to some extent prescribed by

the publishers or their agents. Much of their sales

equipment and advertising materials [were] furnished by the

publishers with the intention that it be used for the

publisher’s benefit.”75

This decision came despite the fact that the terms and

conditions of the newsboys’ work were variable, depending on

whether they wanted to work part-time or fulltime, or were

inclined to work on a permanent basis or a temporary one, 74 Id. at 131.75 Id.

and their activities of actually selling their papers were

in public spaces—street corners—where they were free to move

and communicate as they saw fit. While the Court applied

the common law agency test, also known as the “control

test”, in order to assess whether newsboys were employees or

independent contractors, it also viewed the totality of

facts in this case as indicating a relationship of economic

dependence existed between Hearst and its workers. These

workers were more dependent upon their employer for a

livelihood than they were afforded the opportunity to make

money or generate some type of independent livelihood

through this arrangement for themselves. This meant that

even if under the common law test they could have been found

to be independent contractors, their overall condition more

heavily reflected the confines of a master-servant

relationship than one in which the workers were in a

position to achieve results for their own entrepreneurial

benefit.

The significance of Hearst is twofold. First, the Court in

Hearst demonstrated a classic application of the common law

agency/control test, providing clarity as far as what

factors could be looked to when deciding whether a worker

was an employee or independent contractor. But second, the

Court was in this case willing to give greater weight to

certain factors from the control test – namely, the

entrepreneurial opportunity, or economic

dependence/realities test—so that it could identify genuine

imbalances of bargaining power and remedy them by affording

the relatively disempowered workers protections to organize

under the law. Another way of explaining this is that the

Court used congressional intent to justify its broader

examination of the facts in this case and came up with a

ruling that reflected an attunement to the totality of

circumstances that create a worker’s position in relation to

his/her employer/manager (i.e. the master-servant

relationship).76 Therefore, despite findings that could

have amounted to a decision for newsboys being independent

76 See Jost generally.

contractors, a broader reading of the case led to a decision

that recognized newsboys’ as statutory employees with the

right to organize and collectively bargain.77

A third legacy of the Hearst case, however, is told through

the enactment of the Taft-Hartley Act in 1947, just three

years after Hearst was decided. As backlash against Hearst,

Taft-Hartley amended the Wagner Act to exclude independent

contractors from its definition of employees.78 Then the

Court, in NLRB v. United Ins. Co. of Am., made it clear that only

the common law test was to govern who was an employee versus

an independent contractor. It did so by ruling in United Ins.

that “[t]he obvious purpose of [the Act as amended] was to

have the NLRB and the courts apply [only] general agency

principles in distinguishing between employees and

independent contractors . . . “79. The implication of the

Court’s decision in United Ins. was that, within this

analysis, no one factor should be decisive.80 And so, the 77 See Zatz generally.78 Contingent Workforce Sec. 7.04, Law Journal Press, 2013.79 Jost at fn 60 quoting NLRB v. United Ins. Co. of Am., 390 U.S. 254, 256 (1968).80 See HN2, NLRB v. United Ins. Co., 390 U.S. 254 (1968 LEXIS 3014).

broad interpretation of the original Wagner Act was waylaid

by the design of an amendment that sought to keep

independent contractors from unionizing. Furthermore, the

economic realities test, also interpreted as an

entrepreneurial opportunity test, was re-casted as simply

one factor amongst many that should be evaluated with equal

weight in subsequent cases. In this sense, the question of

whether one’s overall position within the employment scheme

was more consistent with the identity of a master or a

servant, was relegated into obscurity.

An additional outcome of the United Ins. case was that the

Supreme Court set forth a standard of review for deciding

similar cases: “lower courts should uphold Board status

determinations only if it can be said that the Board made a

‘choice between two fairly conflicting views.’”81 In

application, this means that when the courts receive cases

that have already been decided by the Labor Board, the case

81 Bosley, Jeffrey S., “District of Columbia Court of Appeals reverses National Labor Relations Board and finds delivery drivers are independent contractors,” Employee Relations Law Journal, 35.3 (Winter 2009).

must have major points on both sides of the

employee/independent contractor issue for workers’ rights as

employees to be upheld. The significance of this can be

viewed through the prism of cases such as Corporate Express

Delivery Sys. v. NLRB and FedEx Home Delivery v. NLRB.82 83

In Corporate Express, we see somewhat of a comeback of Hearst

logic being applied by the D.C. Appeals Court. In this

case, as in Hearst, there were many factors of the control

test that could be handed to both sides of the debate over

whether a company’s workers were employees versus

independent contractors. In accordance with United Ins., the

evidence created a choice between two fairly conflicting

views.84 What the court allowed to decide this case,

however, was the entrepreneurial opportunity factor, which

provided for another layer of analysis to be applied over

application of the control test. The court wrote:

82 Corporate Express Delivery Sys. v. NLRB, 292 F.3d 777; 2002 U.S. App. LEXIS 11139.83 FedEx Home Delivery v. NLRB, 563 F.3d 492; 385 U.S. App. D.C. 283; 2009 U.S. App.LEXIS 8272.84 See Corporate Express at 779.

We uphold as reasonable the Board’s decision, at the urging of the General Counsel, to focus not upon the employer’s control of the means and manner of the work but instead upon whether the putative independent contractors have a ‘significant entrepreneurial opportunity for gainor loss.’ We agree with the Board’s suggestion that the latter factor better captures the distinction between an employee and an independent contractor. For example, as the Board points out, ‘the full-time cook is regardedas a servant [brackets part of opinion: rather than as an independent contractor] although it isunderstood that the employer will exercise no control over the cooking,’ RESTATEMENT (SECOND) OF AGENCY SEC 202(1) cmt. D (1957). Similarly, acorporate executive is an employee despite enjoying substantial control over the manner in which he does his job. Conversely, a lawn-care provider who periodically services each of several sites is an independent contractor regardless of how closely his clients supervise and control his work. The full-time cook and theexecutive are employees and the lawn-care provider is an independent contractor not becauseof the degree of supervision under which each labors but because of the degree to which each functions as an entrepreneur – that is, takes economic risk and has the corresponding opportunity to profit from working smarter, not just harder.85

The D.C. Circuit followed its own approach in Corporate Express

in FedEx, where it held that “’both this court and the

Board, while retaining all of the common law factors,

“shifted the emphasis” away from the unwieldy control

inquiry in favor of a more accurate proxy: whether the

85 Id. at 780.

“putative independent contractors have significant

entrepreneurial opportunity for gain or loss.”’”86

This decision has been criticized for allowing employers

more opportunity to exclude workers who would typically be

considered employees.87 I wonder, however, if it may also

present an opportunity for a broader interpretation of

employees to be applied in the future. I wonder this

because, while looking at the entrepreneurial opportunity

factor in isolation or as a magic sort of rubric for

deciding what might otherwise lie in the province of a

traditional control test, could we not at the same time be

hearing a message from the courts that an economic realities

test might also provide a basis for deciding whether or not

a master-servant relationship exists, and from there,

determining how much entrepreneurial opportunity actually

exists? The court in FedEx said no, but with purposeful

misclassification so high and an abundance of freelancers

86 Hirsch, Jeffrey M., “Employee or Entrepreneur?” 68 Wash. & Lee L. Rev. 353 (2011) quoting Fed Ex at 497 quoting Corporate Express at 780.87 See Hirsch at 355 and see Jost generally.

whose economic realities dictate their identities align

closer to servant than to master, perhaps there is hope. At

the least, there is a need for this type of broader

interpretation and these cases may indicate the beginning of

a trend in this direction.

Another recent case that highlights the issue of how courts

and the Labor Board interpret decisions concerning workers

who might be classified as either employees or independent

contractors, is The Greater Lancaster Federation of

Musicians complaint against the Lancaster Symphony

Orchestra. In Lancaster, despite the fact that musicians sign

a one-year contract indicating their status as independent

contractors, the Board found that they are in a practical

sense employees who should be afforded the protections of

the Wagner Act for their self-organization. While factors

of the common law test mounted up on both sides of the

issue, when it considered entrepreneurial activity as one of

the factors, the Board seemed to see a larger context for

its interpretation of this question. It wrote:

The fact that the musicians can decide not to work in a particular program or request to work in more programs does not mean that they enjoy an opportunity for entrepreneurial gain suggesting a finding that they are independent contractors. The choice to work more hours or faster does not turn an employee into in an independent contractor. To find otherwise wouldsuggest that employees who volunteer for overtime or employees who speed up their work inorder to benefit from piece-rate wages, and longshoremen who more regularly appear at the ‘shape up’ on the docks, would be independent contractors. We reject that notion.88

What we can take from these cases is for one thing,

significant confusion. By applying a common law test that

is itself not definitive in its factors or in how they

should be applied, we have a baseline level of ambiguity

concerning how to correctly address questions of employment

relationships under the Wagner Act. We also have an

internal conflict in which courts and the NLRB are aware

that the issue of whether someone is more a servant than a

master is indicative of how much “control” they actually

have over their destinies in general, and specifically, in

the context of their work. We have identified this

88 Lancaster Symphony Orchestra and The Greater Lancaster Federation of Musicians, Local, 294, AFM, AFL-CIO, Case 4-RC-21311, December 27, 2011 (Decision on Review and Order) at 7[357 NLRB No. 152 (N.L.R.B.), 192 L.R.R.M. (BNA) 1105, 2010-11 NLRB Dec. P 15520, 2011 WL 6808002.

historically as the economic realities issue. “Dependence”

is another word we have used to get at it. But now, while

we see a return to the entrepreneurial opportunity question

as a factor in this same analysis, we run into the problem

of not being sure how to apply the yardstick of opportunity.

Workers who are sufficiently disempowered that they can

easily be called ‘employees’ and have the right to organize,

may be less precarious in their employment and in the

benefits their employment provides than those who are deemed

by the common law agency test to be less disempowered (i.e.

indie contractors or freelancers), yet their status as non-

employees confers to them a lesser degree of rights and

protections under law. In Lancaster, the Board recognized

that simply because these musicians could under, their

contracts, find work elsewhere, this did not mean they were

enjoying an unlimited degree of entrepreneurial freedom or

opportunity. This is because their opportunity was not

conferred to them as a benefit for working in the Lancaster

Symphony. Rather, their employment with the Symphony did

not bar them from other entrepreneurial pursuits, which they

needed to engage in because their contracts with the

Symphony simply did not provide sufficiently for their

material needs.

A crucial difference exists here between independent

contractors who build their work contracts around the

understanding that they will engage with many different

clients as part of the nature of their work, as opposed to

their need for more employment because the benefits and

protections they are getting from the first source of

employment fails to give them what they need for survival.

In this sense, the musicians are not dissimilar to newsboys.

While both could be considered independent contractors if

only common law agency were used to assess their status, a

fuller look at the totality of their employment situations

might easily lead us to see their options, and thus their

status, differently.

With this as our context, we may return now to the case of

Horowitz’s freelancers.

A fair attack to make on freelancers’ claims for needing a

union is that there is a privilege in being a ‘freelancer,’

in getting to reject the norms of establishment-driven big

business and opt instead for an existence that is precarious

by choice. However, there are both practical and historical

responses to counter this argument.

On a practical level, we know that many companies

misclassify their workers to avoid the responsibilities of

being an employer. That is probably why the term “employee”

is not defined in the Wagner Act itself. The courts must

then have decent latitude for operationalizing the term

‘employee’ because otherwise it would be too easy to say who

is not an employee and leave it at that. On an historical

level, in the New Economy we are seeing higher and higher

unemployment rates while the rate of freelancers increases.

The Atlantic published an article in February of 2013 in which

it analyzed the numbers of independent contractors in the

U.S. across over twenty professions. Though the magazine

was not able to pinpoint the numbers on freelancers per se,

it was able to crunch numbers on those who are self-

employed.89

In traditionally stronghold areas of union organization such

as construction and extraction, 22.6% of those in the field

are currently “self-employed.”90 17.6% of those in building

and grounds cleaning are self-employed; and, interestingly,

16.2% of those in management are self-employed—although

whose staffs or projects these workers are managing and to

what degree they are not in some true sense “employed” is

questionable.91 On a general level, it seems fair to ask

how many of these “self-employed” workers enjoy a truly

substantial degree of entrepreneurial opportunity. On a

more concrete level, we can see that for someone to be

‘self-employed,’ one need not possess a great deal of

entrepreneurial opportunity. This is an assumption based on

statistics, but it is a logical one given the nature of the

work these workers are engaged in; not everyone can afford 89 “The Geography of America’s Freelance Economy” by Richard Florida, The Atlantic, February 25, 2013.90 Id. 91 Id.

to strike out on their own as entrepreneurs, and it is not

likely that “managers”, for instance, are one such group who

is truly self-employed.

We can also address this issue by looking at the evolution

of foreman’s rights in the context of American labor law.

To wit, regarding passage of the Taft-Hartley Act –

. . . businessmen pressured Congress into amending the National Labor Relations Act [also known as the Wagner Act] so that foremen in the nation’s leading automobile, steel, and mining companies would not be allowed to organize and make common cause with ran-and-file workers. Relying on a concept inherited from the colonialmaster and servant doctrine (the body of rules and statutes relating to the relationships between masters/employers and workers/servants),corporate America insisted that unless they wereproduction workers, employees owed a duty of fealty and loyalty to their employers, making their participation in unions impossible. “A man can’t serve two masters,” businessmen repeatedly argued to press their case, suggesting that for supervisors, foremen, and managers, unionism was incompatible with the faithful exercise of duty because it would result in “divided loyalties,” that is, these workers would be torn between their allegiance to the union and their responsibilities toward their employer. The loyalty argument was premised on the notion that democracy and individual rights can be accepted only to the extent that they do not disturb existing social and economic structures.92

92 Vinel, Jean-Christian, The Employee: A Political History, University of PennsylvaniaPress, Philadelphia: 2013 (see page 2).

Historically, those who have been associated in the popular

imagination with the master side of the master-servant

relationship have not been easily seen by their employers as

needing to be active in their workplaces politically because

organizing labor is associated with activity fit for those

who are imagined in closer alignment to the servant. Being

“educated” is one such marker that throws the equation here

off.93 For foremen’s loyalty to be “split” would mean that

a stereotype would need to be severed, and alliances between

individuals would need to be calculated in terms of people’s

real-life interests, rather than the symbolic interests

being protected at any length by the wealthy and politically

connected. In the New Economy, we are seeing stereotypes

splinter apart down similar lines.

93 As Janelle Orsi points out in her book, Practicing Law in the Sharing Economy: HelpingPeople Build Cooperatives, Social Enterprise, and Local Sustainable Economies, the question of whether a master-servant relationship exists and how exactly our courts tend to and should analyze this issue is one the sharing economy movement could benefit from having developed further (see page 387: “What Is a Master-ServantRelationship?”).

For tens of thousands of “educated” New Yorkers already,

“self-employment” is a way of life, and being part of a

union, even if all it is able to provide for its members at

this point in time is access to good healthcare, is

protection these workers are getting from somewhere other

than their employers or the federal government. In the New

Economy, unions are apparently not code for worker

protection, but code for health insurance. Currently, this

is all that “unions” for independent contractors can offer.

This is because only ‘employees’ are protected under the

Wagner Act.

CONCLUSION: WHAT PROTECTIONS SHOULD INDEPENDENT CONTRACTORSBE OFFERED IN THE NEW ECONOMY?

The first conscious change we might apply to labor law where

independent contractors are concerned is to take away the

explicit exclusion of these workers from the language of the

Wagner Act. This would allow the FU, for instance, to begin

to collectively bargain, or insist on various other

employment benefits for their members. It would also

facilitate political mobilization of members to achieve

advances across one another’s industries. In short, it

would empower a legal form of revolution, upsetting the

imbalance of bargaining power present in traditional master-

servant relationships. Except the master here is corporate

power and the servant a wildly expanding “creative class.”

Critics of this idea would say that industrial peace is not

preserved through the fomenting of rebellions. They would

say that the Wagner Act was intended to prevent industrial

strife, and that empowering more workers to organize would

be counter-productive. However, the intent of the Act also

has grounding in the belief that annihilating the master-

servant relationship is a foundational step in securing

equal rights for all people. In this sense, facilitating

more equal bargaining power between whatever parties are

involved in a transaction or contract is a laudable aim when

we are discussing the concept of industrial peace.

A more expansive view of the Wagner Act, a la Hearst, might

offer the courts an efficient way to promote industrial

peace in the New Economy. By allowing ‘economic realities’

to impact courts’ decision-making and weighing ‘economic

dependence’ against ‘entrepreneurial opportunity,’ a middle

ground may be reached. This is because while many, for

instance, FedEx delivery personnel, would likely be

considered independent contractors, there is a chance they

would not be. As newsboys could have been classified as

independent contractors but were not because of their

general positioning in society as manifested in their work

situations (i.e. their economic dependence), freelancers

could be classified this way as well. The precarious nature

of their employment would cut for them being granted the

right to organize, despite their class positioning in regard

to education, socioeconomic background, etc.

A third way we could approach this issue is by contemplating the

values that go into many freelancers’ decisions to live a life of

precarious employment. There is a significant population that

elects the insecurity of an indie capitalist existence and does

not have it foisted upon them due to lack of education,

connections, etc. They are tech entrepreneurs, artists, farmers,

even lawyers. These workers may be different from newsboys or

FedEx workers in that these are largely knowledge workers with

privilege in American society that makes them anything but

“servants” in a larger economic realities sense. And yet, to be

trading on a currency of trust over dollars, to be investing time

and energy in sharing enterprises that reduce people’s carbon

footprints and enhance community in cities across the country,

and to do so while living in New York City and making under

twenty-five thousand dollars a year, is to labor against a

concept of employment that requires there be a servant present at

all. It is to be engaged in a form of revolution that is at the

heart of the New Economy and is consistent with the original

intent of the Wagner Act. Logically, the Wagner Act should be

able to support those efforts.