National Labor Relations Act

October 31, 2014 | Healthcare Risk, Quality, & Safety Guidance

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The NLRA applies to most private sector employees. The act does not apply to the following categories of workers:

In a 2014 decision, the U.S. Supreme Court held that workers employed as "personal assistants" to Medicaid recipients in their homes, although paid by the state of Illinois through a state program subsidized by federal Medicaid funds, were private employees who could not be compelled by the state to pay an agency fee to the union representing them under a collective bargaining agreement with the state. (Harris v. Quinn) Eight employees within the state program filed a class action lawsuit challenging Illinois's collection of the labor organization agency fee. One of the plaintiffs was employed as a personal assistant to her daughter, who requires constant care as a result of a permanent disability.

Under the state program, the workers established an employee-employer relationship with "customers," Medicaid recipients, who defined employees' duties through a "service plan" approved by the customer's physician for such tasks as shopping, household tasks, "incidental health care tasks," and "monitoring to ensure the health and safety of the customer." The customers controlled the right to hire, fire, train, supervise, and discipline the employees and were not entitled to various benefits available to state workers otherwise employed. In its ruling, the court determined that the plaintiffs' First Amendment rights under the U.S. Constitution (to avoid union membership or support) could not be abrogated by the state's plan. (Harris v. Quinn)

The NLRA draws an important distinction between "employees" and "independent contractors." An individual having the status of "independent contractor" is excluded from NLRA coverage. Whether an individual is classified as an "employee" or an "independent contractor" for purposes of the NLRA is generally determined on a case-by-case basis, applying the common law of agency's "right of control" test to the facts and circumstances (Roadway Package Sys. Inc.).

When applying the agency test, NLRB and courts have considered the putative employer's business model and whether there exists an entrepreneurial opportunity for gain or loss and entrepreneurial activity on the part of the worker. Among facts that support an...

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