This month, the U.S. Court of Appeals for the District of Columbia Circuit (“DC Circuit”)1 held that lacrosse officials working for the Pennsylvania Interscholastic Athletic Association (“PIAA”) are independent contractors—rather than employees—and are therefore not protected by the National Labor Relations Act (“NLRA”), a foundational US labor statute. Rights afforded to employees under the NLRA include the right to join together to improve wages and working conditions and the right to form or join a labor union.
Prior to the PIAA case reaching the DC Circuit, a labor union had sought to organize approximately 140 referees who officiated lacrosse games in over 1,500 schools throughout Pennsylvania. While the National Labor Relations Board (“NLRB”) – the agency in charge of enforcing the NLRA – initially held that the referees were employees, the DC Circuit disagreed. The Court explained that determining whether a worker is an employee or independent contractor is “more art than science” and referenced a ten factor test from the Restatement (Second) of Agency that courts and the NLRB apply when making this determination.2 Courts also consider whether the workers have a “significant entrepreneurial opportunity for gain or loss.” In finding that the officials were independent contractors, the Court focused primarily on two of the Restatement factors: (1) the fact that officials are paid by PIAA on an infrequent basis; and (2) the short duration of their employment.
With respect to the frequency of payment, the Court explained that, throughout the course of a seven week regular season, the workers only officiate two to three games per week and are paid directly by the schools, not PIAA, for those games. It is only during the postseason that PIAA sets the per-game fee, selects officials, and pays the officials. Indeed, PIAA pays officials, on average, for only three games per year. As for the short duration of employment, the Court explained that the officials work at most 22-31 days per year and approximately two hours per game, resulting in only 20 to 60 hours per year. Moreover, unlike workers who are automatically invited back to officiate each year, the officials must satisfy various criteria to re-register for the next year, and, even if registered, are not guaranteed to be selected to referee any games.
Other factors on the Restatement list also contributed to a finding of independent contractor status. For example, the Court noted that referees require some skill and expertise, but not the level of expertise that is required in other fields, such as professional music. Referees also provide their own equipment and, while PIAA designates the location of each postseason game, the schools own and operate the fields. Moreover, several agreements—including the PIAA Constitution and Bylaws—refer to the officials as independent contractors and, although PIAA drafted such agreements, the officials agreed to adhere to them. The fact that PIAA does not deduct withholdings on the few paychecks it issues to officials also weighed in favor of independent contractor status.
As for entrepreneurial opportunity, the Court explained that officials have some opportunities to work “harder,” e.g., by taking on more games, but very few opportunities to work “smarter” as they do not have control over the length of the games and may not hire assistants, assign games to others, or find cheaper replacements to recover the difference. Accordingly, the Court found that there was limited opportunity for entrepreneurial gain, and that this factor (along with a few other Restatement factors) favored a finding of employee status.
Nonetheless, when considering the weight of the evidence, particularly the infrequent pay from PIAA to the officials and the short duration of the officials’ employment, the DC Circuit held that the officials were independent contractors, not employees. The DC Circuit also noted that nearly every state court that evaluated the employment status of amateur sports officials reached the same conclusion. While future cases must go through a similar fact-specific analysis, the PIAA decision suggests that US courts are likely to find that amateur sports officials are independent contractors as opposed to employees and, as such, are not subject to the NLRA’s protections.
1 Pennsylvania Interscholastic Athletic Association v. National Labor Relations Board, Case No. 18-1037 (U.S. Court of Appeals for the D.C. Circuit).
2 The ten Restatement factors are: (1) the extent of the employer’s control over the work; (2) whether the worker “is engaged in a distinct occupation or business”; (3) “the kind of occupation,” and whether it “is usually done under the direction of the employer or a specialist without supervision”; (4) the skill required for the occupation; (5) who “supplies the instrumentalities, tools, and the place of work”; (6) “the length of time for which the person is employed”; (7) “the method of payment, whether by the time or by the job”; (8) whether the work is part of the employer’s “regular business”; (9) whether “the parties believe they are creating the relation of master and servant”; and (10) whether the employer “is or is not in business.” RESTATEMENT (SECOND) OF AGENCY § 220(2) (AM. LAW INST. 1958).