Tennessee free-market group sues over federal rule that tightens worker classification standards

Feb 21, 2024, 11:18 AM

NASHVILLE, Tenn. (AP) — A Tennessee free-market nonprofit group on Wednesday joined the ranks of organizations challenging a new Biden administration labor rule that changes the criteria for classifying workers as independent contractors or employees.

The Beacon Center of Tennessee filed its federal lawsuit in Nashville on behalf of two freelance journalists, Margaret Littman and Jennifer Chesak. The lawsuit against the U.S. Department of Labor, its wage division and two top officials claims the new rule will “force freelancers to enter undesirable employment relationships or to refrain from working at all.”

Others are also challenging the rule, including business coalitions in an ongoing case before the 5th U.S. Circuit Court of Appeals, and a group of freelance writers represented by a libertarian legal organization who sued in a Georgia federal court.

The rule replaces a Trump-era standard regarding classification of employees as contractors. Such workers are not guaranteed minimum wages or benefits, such as health coverage and paid sick days. The new rule aims to prevent the misclassification of workers as independent contractors.

President Joe Biden’s administration proposed the rule change in October 2022, approved it in January and set it to go into effect on March 11.

Labor advocates have supported the rule, saying employers have exploited lax rules to misclassify workers and avoid properly compensating them. Business groups contend that the rule creates uncertainty for employers and that much depends on how the Labor Department decides to enforce it.

The Beacon Center’s lawsuit argues that the Labor Department lacks the authority to change the rule and didn’t provide a reasoned explanation for it as required by the federal Administrative Procedure Act. Additionally, the group argues that the rule increases the chances that freelancers like Littman and Chesak will be misclassified as employees instead of contractors.

In Chesak’s case, the lawsuit says one company has begun requiring her to spend unpaid hours documenting her tasks as a freelancer; another company has limited the hours she can work as a freelancer; and another has required her to sign an agreement that indemnifies the company if it were found liable for misclassifying her.

“I’ve chosen to be a freelance writer for nearly 30 years because of the flexibility, control, and opportunity it provides me,” Littman said in a news release. “I’m fighting back against the Labor Department’s rule because it threatens to destroy my livelihood and right to earn a living as a freelancer.”

The rule directs employers to consider six criteria for determining whether a worker is an employee or a contractor, without predetermining whether one outweighs the other. That’s a change from the Trump-era rule, which prioritized two criteria: how much control a company has over its workers and how much “entrepreneurial opportunity” the work provides.

It’s up to employers initially to decide how to weigh each criteria, which also include how much control the employer has over the worker, whether the work requires special skills, the nature and length of the work relationship of the relationship between worker and employer, and the investment a worker makes to do the work, such as car payments.

Major app-based platforms including Uber and Lyft have expressed confidence that the new rule would not force them to reclassify their gig drivers. The two companies are also listed as members of one of the business coalitions challenging the rule in court.


Associated Press

Soar, slide, splash? It’s skiers’ choice as spring’s wacky pond skimming tradition returns

GILFORD, N.H. (AP) — A costumed skier races down a slope, hits a pond and hydroplanes halfway across. He pirouettes and then plunges into the icy water before jumping up and waving to the cheering crowd. It’s the wacky spring tradition of pond skimming, and it’s happening this month at ski resorts across the country. […]

3 days ago

Associated Press

Federal appeals court overturns West Virginia transgender sports ban

CHARLESTON, W.Va. (AP) — A federal appeals court has overturned a West Virginia transgender sports ban, finding that the law violates Title IX, the federal civil rights law that prohibits sex-based discrimination in schools. The 2-1 ruling Tuesday from the 4th U.S. Circuit Court of Appeals blocks a West Virginia law banning transgender girls from […]

6 days ago

Associated Press

German parliament votes to make it easier for people to legally change their name and gender

BERLIN (AP) — German lawmakers on Friday approved legislation that will make it easier for transgender, intersex and nonbinary people to change their name and gender in official records. The “self-determination law,” one of several social reforms that Chancellor Olaf Scholz’s liberal-leaning coalition government pledged when it took office in late 2021, is set to […]

11 days ago

Associated Press

The OJ Simpson saga was a unique American moment. 3 decades on, we’re still wondering what it means

NEW YORK (AP) — A dog’s plaintive wail. A courtroom couplet-turned-cultural catchphrase about gloves. A judge and attorneys who became media darlings and villains. A slightly bewildered houseguest elevated, briefly, into a slightly bewildered celebrity. Troubling questions about race that echo still. The beginning of the Kardashian dynasty. An epic slow-motion highway chase. And, lest […]

11 days ago

Associated Press

Internet providers must now be more transparent about fees, pricing, FCC says

NEW YORK (AP) — Much like nutritional labels on food products, “broadband labels” for internet packages will soon tell you just what is going into the pricing of your service, thanks to new rules adopted by the Federal Communications Commission this week. “If you’ve ever shopped for home or mobile internet, you can understand how […]

13 days ago

solar eclipse...

Associated Press

Total solar eclipse wows North America. Clouds part just in time for most

MESQUITE, Texas (AP) — A chilly, midday darkness fell across North America on Monday as a total solar eclipse raced across the continent, thrilling those lucky enough to behold the spectacle through clear skies. Street lights blinked on and the planets came into view, as the moon shrouded the sun for a few minutes across […]

14 days ago

Tennessee free-market group sues over federal rule that tightens worker classification standards