In April, the D.C. Circuit Court of Appeals issued a landmark ruling for professional symphonic musicians. In upholding the NLRB’s determination that the musicians of the Lancaster Symphony are employees—not independent contractors—the Court settled the question once and for all. Symphony musicians are entitled to all the rights and protections that accompany employee status. It is now crystal clear.
Or is it?
Fourteen years ago, the Eighth Circuit Court of Appeals, a Court on the same “level” as the D.C. Circuit Court (one level below the U.S. Supreme Court), reached precisely the opposite conclusion: symphony musicians are independent contractors—not employees. So . . . which is it?
The answer requires an understanding of two concepts: first, the method by which courts determine whether a worker is an employee or an independent contractor; and second, the standard of review that federal appellate courts (like the D.C. Circuit and the Eighth Circuit) utilize when reviewing decisions of lower courts and agencies like the NLRB.
The independent contractor vs. employee question has been very much in the news with the rise of the so-called gig economy. Most notably, Uber drivers have been pushing back, hard, against Uber’s position that they are independent contractors. Several class actions have been filed, in various states; one was recently settled, in California, with Uber agreeing to pay $100 million to the plaintiff drivers. Significantly, Uber did not admit the drivers are employees, and the settlement has yet to be approved by the district court (and has been bitterly criticized by some of the original plaintiffs).
The distinction is hugely significant. Employee status comes with a host of rights: the right to unionize and bargain collectively for terms and conditions of employment; protection under federal and state civil rights statutes that prohibit discrimination on the basis of, among other things, race, gender, age, or (in blue states at least) sexual orientation and gender identity; the right to unemployment benefits and workers comp; and more. But if a worker is classified as an independent contractor, the worker is entitled to none of those rights and protections. He or she is essentially deemed to be taking part in an arms-length business transaction, on an equal footing with the “employer”. The law views the relationship as one business contracting with another business; the terms of the transaction are governed only by the free market.
Courts have long used a legal test for determining employee status that looks at a number of factors, including the “extent of control” the employer has over how the work is performed, the amount of skill required, whether the worker supplies his or her own tools, the length of time the worker provides services, how management and the worker subjectively view their relationship (particularly as reflected in their agreements), and the method of payment and tax treatment.
The weight courts place on each factor varies considerably. Officially, courts maintain that “no one factor is determinative.” Generally, though, the element of “control” is often the most important. That makes sense: whether a worker is directed and supervised in his or her work, and told what to do and how to do it, should be of greater significance than whether, for example, an employer sends out a W-2 or a 1099-MISC at the end of the year. But courts are far from consistent. As with many multi-factor legal tests, it often seems that a court places more weight on a particular factor simply to justify the result the court has already decided it wants to reach.
Which brings us to the two decisions mentioned above. First, the good news: In Lancaster Symphony Orchestra v. NLRB—the decision handed down by the D.C. Circuit in April—the musicians of the Lancaster Symphony attempted to organize. (AFM Local 294 filed a petition for certification with the NLRB.) Management challenged the petition on grounds that the musicians were independent contractors, not employees, and thus had no legal right to join a union. Although an NLRB Regional Director initially sided with management, the NLRB ultimately ruled that the musicians were employees and could elect to join the AFM.
When a party reaches the end of the road with the NLRB and is unhappy with the outcome, that party can appeal the NLRB’s ruling directly to the federal Circuit Court of Appeals (the appellate court that sits in between district courts and the U.S. Supreme Courts). But appeals from federal-agency rulings are treated differently than appeals from a district court. For agency appeals, the Circuit Court applies a certain level of deference to the agency’s determinations—the rationale being that the agency has been charged by Congress with regulating a specific area of law. In contrast, an appeal from a lawsuit ruling, depending on the circumstances, is often viewed de novo—that is, the Court of Appeals looks at the judgment as if viewing the evidence for the first time and coming to its own conclusion, independent of and without any deference to the court below.
So in Lancaster, the prism through which the Court applied the multi-factor independent contractor/employee test was colored by the deference it was required to show to the NLRB’s decision. The Court considered many of the usual factors, but focused (as most courts do) on the element of control. The Court noted that in a symphony orchestra, the employer “regulates virtually all aspects of the musicians’ performance.” Not only are musicians required to exhibit a certain level of decorum, but—and this is the money quote—the “conductor exercises virtually dictatorial control over the manner in which the musicians play.”
Conversely, the Court noted factors suggesting independent contractor status: playing in a symphony orchestra clearly requires a high level of skill; the musicians in the Lancaster Symphony were employed for only a brief period of time; and the musicians’ personal service agreements said they were independent contractors and taxes would not be withheld. The Court also examined a factor that courts are increasingly looking to: the extent of a worker’s “entrepreneurial opportunities” to work for other companies, sell or assign their role to others, hire their own employees, etc. But the Court concluded that this factor provided only “miniscule support” for the notion that musicians are independent contractors. (After all, it’s not as if the principal clarinet can sell his or her spot in the orchestra, or hire someone else to help play the hard parts.)
Adding up the tally, the Court found that while some factors (especially the control factor) weighed in favor of employee status, others weighed in favor of contractor status. But rather than use its own independent judgment to decide which factors tipped the scale, the Court deferred to the NLRB: “Because the circumstances of this case thus present a choice between two fairly conflicting views, we must defer to the [NLRB’s] conclusion that the Orchestra’s musicians are employees.”
That deference is what distinguishes Lancaster from the bad-news case: the Eighth Circuit’s decision in Lehrol v. Friends of Minnesota Sinfonia. There, two musicians who were terminated from the Minnesota Sinfonia (an orchestra of free-lance musicians) brought suit alleging gender and disability discrimination. As in Lancaster, the case turned on whether the musicians were “employees”—because independent contractors aren’t permitted to bring such lawsuits. Unlike Lancaster, however, the Court’s standard of review in Lehrol was de novo, because the district court had granted summary judgment in favor of the employer (i.e., a judgment based solely on the evidence produced in the discovery process, without a trial). When a summary judgment ruling is appealed, a reviewing court looks at the case with fresh eyes and no deference to proceedings below, and reaches its own independent conclusion.
But even apart from applying a different standard of review, Lehrol’s analysis departed from Lancaster in several ways. First, the Court construed the element of “control” as referring not to how musicians are controlled in the workplace, but whether they have the ability to decline certain concerts and accept other gigs. Second, the Court put a great deal of emphasis on factors usually afforded little weight—for example, the Court declared it “highly significant” that management did not withhold taxes.
If that sounds like nonsense, well, it is. Lehrol is an embarrassingly bad decision. The Court’s interpretation of “control” defies logic and reveals an utter ignorance of how musicians actually work. And it is plain silly to deny civil rights protection on the basis that the employer unilaterally decided not to withhold FICA.
But Lehrol has not yet been challenged and overruled, which means that Lehrol and Lancaster are the only two federal appellate court decisions that have spoken to this issue—with opposite outcomes. For its part, the Lancaster Court noted Lehrol and the discrepancy with its own conclusion, but explained (unconvincingly, in my view) that there was no conflict because (1) the Lehrol case was a civil-rights case, not a labor case; and (2) the standard of review was different.
The result is remarkable: a musician can simultaneously be both an employee and not an employee. In a proceeding before the NLRB on an unfair labor practice charge, the musician is an employee. But if that same musician is alleging racial discrimination in a lawsuit, the musician is an independent contractor. Go figure.
At some point the viability of Lehrol will be challenged. The Lancaster decision should help with that; despite the different standard of review, the Court’s conclusions regarding the element of control are spot on. (Ask any orchestral musician how much “control” they really have at work—especially vis-à-vis the conductor.) Lancaster will be persuasive to other courts that consider the issue.
More importantly, however, the impact of Lancaster on the day-to-day lives of musicians is significant. It is now clear under federal labor law that orchestral musicians, even in smaller, “freelance” orchestras, are employees and have the right to unionize. Lancaster renders Lehrol irrelevant on that point. But does it apply to every orchestra, no matter how small? Quite possibly. Every circumstance is different, and the employee-status factors will vary from case to case; but the element of control is conceptually no different in an orchestra that presents six concerts a year than in one that presents a hundred.
What about subs and extras? Is a musician who subs only occasionally in the course of a season an “employee”? For purposes of federal labor law, the answer has been “yes” even before Lancaster. In an earlier decision, Seattle Opera v. NLRB, the D.C. Circuit upheld the NLRB’s ruling that alternate choristers in the Seattle Opera chorus were employees. Again, the element of control carried the argument: the choristers were subject to “attendance and decorum requirements,” and required to “follow musical and dramatic direction” on stage. What Lancaster does is reinforce the analysis in Seattle Opera—indeed, Lancaster explicitly discussed Seattle Opera in support of its conclusions with respect to symphony musicians.
I suspect that the reaction of many musicians reading this and other articles about Lancaster might be to say, “duh.” Musicians have always known that their autonomy essentially ceases when they set foot on stage. They know how absurd it would be to view musicians as engaged in an arms-length business transaction when rehearsing a Mahler symphony. But now we know that the law—or one important court, at least—sees it the same way.