Rohit Chopra's CFPB, demarcating employees v. contractors, and a Public Advocate push
Hello, hello! I hope you’re having a good February.
I have three stories to share with you today.
The first one is a little profile of Rohit Chopra, the new director of the Consumer Financial Protection Bureau (CFBP), out this month in the print issue of The New Republic. The story also gives you an overview of the agency — which is about a decade old and born out of an essay published in another small liberal magazine. I wanted to both understand what some of the new consumer protection issues lawmakers and regulators will be tackling in the Biden-era (like cryptocurrency and employer-driven debt) but also what’s going on with some of the ‘older’ consumer protection issues — like payday loans — that regulators have yet to really make headway on. I got to ask Chopra some questions and learn why advocates feel cautiously optimistic about his tenure. You can read the story here.
The next piece, is unfortunately paywalled, but I can talk about some of what I learned through reporting. For The Capitol Forum, which is a site focused on markets and competition policy, I’ve done a pair of stories over the last month regarding developments at the National Labor Relations Board around who is an “employee” vs. an independent contractor.
(As a bit of background: The NLRB is the federal agency tasked with protecting the rights of private-sector workers and encouraging collective bargaining. Private-sector workers are barred from bringing workplace grievances through the courts themselves, so filing complaints with the NLRB—which has more than two dozen regional offices spread across the country—is how employees can seek redress if they feel their rights have been violated. If an issue can’t get settled at the regional level, it gets kicked up to the agency’s five-person panel in D.C., which issues a decision.)
In late December, the NLRB announced it would be accepting briefs regarding whether it should reconsider its standard for independent contractor status. Independent contractors (and full disclosure: I am one) generally lack traditional labor protections, like the right to overtime pay and the ability to join a union. Their invitation came as part of a case the NLRB is considering, where makeup artists and hairstylists for the opera in Atlanta, Georgia say they should be treated as employees and not contractors. A regional NLRB director in June agreed with them, but The Atlanta Opera appealed to the D.C. board.
Now the backstory here is that for years union advocates have contended that too many workers are misclassified as independent contractors despite the functional control their bosses have over their employment. But past attempts the NLRB has made to broaden that classification standard have been rejected by federal court (in 2009 and again in 2017). Part of the Democratic-backed PRO Act would seek to codify a broader standard for ‘employee’ — which would certainly help it stand up in court — but for now that bill is stalled in Congress.
So the first story looked at the challenges workers would face to getting an expanded employee standard upheld, but how even if that’s the case, an aggressive general counsel at the NLRB could still make life fairly hellish for gig economy employers, by costing them a lot of money and referring them for Department of Labor investigations.
The second story reviewed all 30+ amicus briefs that were filed in response to the NLRB’s December solicitation. Many of the players in the debate put forward similar arguments that they’ve been making over the last decade, but there were a few new twists. The biggest I would say is a new push by some—including the Department of Justice—to say antitrust rules have been too long ignored in misclassification debates. Led by Assistant Attorney General Jonathan Kanter, the DOJ argued in its brief that “a vague or underinclusive” employee standard could harm workers, employers, and competition directly.
Part of the reason people keep warring over how to define employee v. contractor is because Congress chose not to clarify that in the past. In 1947, Congress explicitly carved out independent contractors from the National Labor Relations Act’s definition of “employee.” Then in 1968, the U.S. Supreme Court ruled that the “obvious purpose” of Congress excluding independent contractors from the NLRA was then to have the NLRB and courts “apply the common-law agency test” when determining an employee from an independent contractor.” The common law agency test the board and courts have since then used, is called the “Second Restatement of Agency” — a ten-factor test originally published in 1958.
Much of the legal and political debate over the last ten years has been over whether any of those ten factors—particularly "entrepreneurial opportunity”—should weigh more heavily than others in a decision. Under Obama, the NLRB said no one factor should be decisive, but the D.C. Circuit disagreed.
The pro-union National Employment Law Project put forward a relatively innovative argument in its brief, suggesting an alternative common law test to use. If interested can click this tweet below to read what they said.
Anyway I have a lot more thoughts on this but going to move on, though happy to answer any other questions. The NLRB will begin draft its decision after Feb 25, so I’ll keep my eye on that and send update.
The last story was published today in The American Prospect and looks at an interesting new movement to establish offices of “Public Advocates” at the state-level. I look at the history of the idea, the prospects for a bill in Maryland, as well as other national efforts.
Thank you for reading! As always, welcome your ideas, questions and feedback any time.