Author

Introduction

Workers classified as independent contractors do not enjoy the legal benefits of the employment relationship, including the protection of wage and hour laws, an entitlement to workers’ compensation or unemployment benefits, or access to the National Labor Relations Act’s (“NLRA”) framework for collective bargaining.³3. The NLRA explicitly excludes “independent contractors,” 29 U.S.C. § 152(3), while federal wage-and-hour protections under the Fair Labor Standards Act (FLSA) are limited to “employees.” See 29 U.S.C. § 206(a) (setting a federal minimum wage for employees); id. § 207(a) (setting maximum hours for employees). Unemployment and workers’ compensation benefits are typically administered through state law, and while states vary in their approach to classifying workers, they all limit benefits to workers classified as employees. See Independent Contractor Classification, Practical Law Practice Note 4-503-3970, State and Local Tests; see also generally Brishen Rogers, Employment Rights in the Platform Economy: Getting Back to Basics, 10 Harv. L. & Pol’y Rev. 479, 484–96 (2016) (discussing the employee-independent contractor distinction’s ramifications for Uber and Lyft drivers); Catherine L. Fisk, Sustainable Alt-Labor, 95 Chi.-Kent L. Rev. 7, 15–16 (2020) (noting how misclassification of workers as independent contractors through the courts has resulted in a loss of substantial employee benefits for those workers).Show More Another possible consequence of independent contractor status is antitrust liability: While employees may engage in otherwise-illegal concerted action as part of a labor dispute, according to one theory of the “labor-dispute exemption,” independent contractors can be sued, enjoined, and forced to pay treble damages to the companies they work for if they organize to demand higher wages and strike.⁴4. See Brief for the United States and the Federal Trade Commission as Amici Curiae at 8, Chamber of Com. v. City of Seattle, 890 F.3d 769 (9th Cir. 2018) (No. 17-36540) (“Independent contractors, as horizontal competitors, may not collude to set the price for their services.”); 15 U.S. Code § 15(a) (authorizing treble damages in private suits); infra Part I.Show More Platform workers in the ride-hailing industry are currently considered independent contractors under federal labor law, and thus if they go on strike or exert collective pressure on platform companies, they may face liability under the antitrust laws.⁵5. NLRB Advice Memorandum, Uber Technologies, Inc. Cases 13-CA-163062, 14-CA-158833, and 29-CA-177483 (Apr. 16, 2019) (uber drivers are classified as independent contractors under the prevailing standard based on Supershuttle DFW, Inc., 367 NLRB No. 75 (Jan. 25, 2019)); but see Order Granting Review and Notice and Invitation to File Briefs, The Atlanta Opera, Inc., Case 10-RC-276292 (Dec. 27, 2021) (inviting parties and amici to submit briefs addressing whether the Board should reconsider the Supershuttle standard).Show More

In 2016, a group of Puerto Rican jockeys formed a labor organization to protest the terms under which they were hired by the horse owners and the owner-operator of a racetrack.⁶6. Confederación Hípica v. Confederación de Jinetes Puertorriqueños (Jinetes), 30 F.4th 306, 311 (1st Cir. 2022), cert. denied, 143 S. Ct. 631 (2023).Show More The jockeys organized a strike, and the horse and racetrack owners sued. The District Court found that the jockeys had violated antitrust law by acting in concert to restrain trade and could not benefit from the labor-dispute exemption because of their independent contractor status.⁷7. Id. at 312.Show More In April 2022, the First Circuit reversed, extending the statutory labor-dispute exemption beyond the legal employment relationship for the first time.⁸8. Id. at 314. Strictly speaking, what was new in this case was extending the exemption to alleged independent contractors without finding any employee-employer relationship indirectly at issue; courts have included independent contractors in the exemption in some limited circumstances involving industries in which independent contractors compete with legal employees. See infra note 22 and accompanying text. The First Circuit also did not take a position on the jockeys’ status, rejecting a doctrinal framework that would require a finding of employee status before applying the exemption. See infra Part II.Show More

The rule the court articulated—that any dispute over wages is a labor dispute, regardless of whether or not it is between employees and employers—opens the door to labor organizing in the gig economy, an important opportunity for workers in a growing sector.⁹9. See Lawrence F. Katz & Alan B. Krueger, The Rise and Nature of Alternative Work Arrangements in the United States, 1995–2015, 72 ILR Rev. 382, 383 (2019) (“[T]he percentage of workers engaged in alternative work arrangements—defined as temporary help agency workers, on-call workers, contract company workers, and independent contractors or freelancers—rose from 10.7% in February 2005 to somewhere in the 12.6 to 15.8% range in late 2015.”); Monica Anderson, Colleen McClain, Michelle Faverio & Risa Gelles-Watnick, Pew Rsch. Ctr., The State of Gig Work in 2021, at 11 (2021), https://www.pewresearch.org/internet/2021/12/08/americans-experiences-earning-money-through-online-gig-platforms [https://perma.cc/LYM9-YNUJ] (“About one-in-ten adults (9%) have earned money doing gig platform work in the past 12 months.”).Show MoreBut it’s unclear just how far it opened the door: Replacing a categorical test based on employee classification with the hazy distinction between wages and prices allows courts to construe the exemption as broadly or as narrowly as they like.

I. The Statutory Labor-Dispute Exemption Before Jinetes

Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade.”¹⁰10. 15 U.S.C. § 1.Show More The Act was originally passed to fight rising corporate monopolies,¹¹11. See Apex Hosiery Co. v. Leader, 310 U.S. 469, 492–93 (1940) (“[The Sherman Act] was enacted in the era of ‘trusts’ and of ‘combinations’ of businesses and of capital organized and directed to control of the market by suppression of competition in the marketing of goods and services, the monopolistic tendency of which had become a matter of public concern.”); Standard Oil Co. v. United States, 221 U.S. 1, 50 (1911) (“[T]he main cause which led to the legislation was the thought that it was required by the economic condition of the times; that is, the vast accumulation of wealth in the hands of corporations and individuals.”).Show More but courts—eager to suppress the nascent labor movement—relied on the vague language of the Sherman Act to issue injunctions against strikers, picketers, and any form of labor action involving violence, social pressure, or even “moral intimidation.”¹²12. Vegelahn v. Guntner, 44 N.E. 1077, 1077 (1896); see Loewe v. Lawlor (Danbury Hatters), 208 U.S. 274, 276 (1908) (holding unions subject to injunctions under the Sherman Act).Show More

In 1914, Congress attempted to oust federal courts from antitrust scrutiny of labor disputes through the passage of the Clayton Act. Section 6 of the Clayton Act declares that, for the purposes of antitrust law, “[t]he labor of a human being is not a commodity,” and that “[n]othing contained in the antitrust laws shall be construed to forbid the existence and operation of labor . . . organizations . . . ; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws.”¹³13. 15 U.S.C. § 17.Show More Yet, the federal courts were not deterred. In Duplex Printing, the Supreme Court construed Section 20 of the Clayton Act as merely codifying the case law that had grown around the labor injunction, importing the federal common-law prohibitions on labor boycotts enforced in cases like Danbury Hatters.¹⁴14. Duplex Printing Press Co. v. Deering, 254 U.S. 443, 470 (1921) (“The first paragraph [of Clayton Act § 20] merely puts into statutory form familiar restrictions upon the granting of injunctions already established and of general application in the equity practice of the courts of the United States.”).Show More

President Hoover signed the Norris-LaGuardia Act in 1932.¹⁵15. 29 U.S.C. § 101. Show More That Act barred federal courts from issuing injunctions “in a[ny] case involving or growing out of a labor dispute.”¹⁶16. Id.Show More A decade later, and after the additional passage of the NLRA, the Court construed the ouster broadly, restoring the original purpose of the Clayton Act as a bar on any antitrust scrutiny of labor organizing.¹⁷17. See United States v. Hutcheson, 312 U.S. 219, 231 (1941) (“[W]hether trade union conduct constitutes a violation of the Sherman Law is to be determined only by reading the Sherman Law and § 20 of the Clayton Act and the Norris-LaGuardia Act as a harmonizing text . . . .”).Show More

The next year, the Supreme Court issued the first in a series of decisions that narrowed the applicability of the labor-dispute exemption. In Columbia River Packers, the Supreme Court declined to apply the exemption to a dispute between a fishermen’s union and the owner of a cannery.¹⁸18. Columbia River Packers Ass’n v. Hinton, 315 U.S. 143, 145 (1942).Show More The union represented fishermen who owned or leased fishing vessels and, in some cases, employed their own crew.¹⁹19. Id. at 147.Show More The Court found that they were independent businesspeople, and their dispute with the cannery was over “the terms of a contract for the sale” of fish, rather than, as the Norris-LaGuardia Act required, “the terms or conditions of employment.”²⁰20. Id. at 145.Show More The Court reasoned that because in passing the Norris-LaGuardia Act “the attention of Congress was focussed upon disputes affecting the employer-employee relationship, . . . the Act was not intended to have application to disputes over the sale of commodities.”²¹21. Id.Show More While acknowledging that the Norris-LaGuardia Act expressly allowed for parties to a labor dispute that did not stand in “the proximate relation of employer and employee,” the Court insisted that it did not apply to “controversies upon which the employer-employee relationship has no bearing.”²²22. Id. at 147.Show More

Though nothing in either the Clayton or Norris-LaGuardia Act conditions the immunity on the labor group consisting of common-law employees (as opposed to independent contractors), the Court has, in a handful of cases, declined to apply the immunity to independent contractors that were selling (or re-selling) goods, or whom the Court found were otherwise in business for themselves, and not merely workers selling their labor.²³23. See, e.g., United States v. Women’s Sportswear Mfr. Ass’n, 336 U.S. 460, 463–64 (1949) (denying the exemption to a stitching contractor who sold labor but also had “rentals, capital costs, overhead and profits,” and thus was “an entrepreneur, not a laborer”); Los Angeles Meat & Provision Drivers Union v. United States, 371 U.S. 94, 96–97 (1962) (denying the exemption to “grease peddlers,” whom the Court found were “independent entrepreneurs whose earnings as middlemen consisted of the difference between the price at which they bought . . . restaurant grease . . . and the price at which they sold it to the processors,” and who had significant capital investment in the form of “operating and maintaining their trucks”); see also FTC v. Superior Ct. Trial Laws. Ass’n, 493 U.S. 411, 436 (1990) (upholding FTC order against boycott by private attorneys who worked as court-appointed counsel). The exemption was not raised on appeal. See Superior Ct. Trial Laws. Ass’n v. FTC, 856 F.2d 226, 230 n.6 (D.C. Cir. 1988) (“Petitioners routinely used the word ‘strike’ to describe their concerted refusal to accept new cases. Petitioners have not suggested, however, that they are ‘employees’ within the meaning of § 20 of the Clayton Act . . . or that SCTLA is a ‘labor organization’ within the meaning of § 6 of the same Act . . .”).Show More In other cases, workers classified as independent contractors, doing the same work as employees but under different contractual conditions, have enjoyed antitrust immunity for labor union activity.²⁴24. See, e.g., Am. Fed’n of Musicians v. Carroll, 391 U.S. 99, 106 (1968) (treating independent contractor band leaders as a “labor group” involved in a “labor dispute” due to the presence of “job or wage competition or some other economic inter-relationship affecting legitimate union interests between the union members and the independent contractors”); H.A. Artists & Assocs., Inc. v. Actors’ Equity Ass’n, 451 U.S. 704, 721–22 (1981) (“In a case . . . where there is no direct wage or job competition between the union and the group it regulates [viz. agents], the Carroll formulation to determine the presence of a nonlabor group . . . necessarily resolves this issue.”).Show More While some lower courts have inferred a categorical exclusion,²⁵25. See, e.g., Taylor v. No. 7, Int’l Union of Journeymen Horseshoers, 353 F.2d 593, 606 (4th Cir. 1965) (finding that a boycott by the farriers’ union was not entitled to the exemption because the farriers “do not stand in the proximate relation of employees and employers” with horse owners and trainers and “[t]here is no evidence in the record that the boycotting and price-fixing activities of the defendant unions were undertaken in aid of or in connection with the wages, hours, working conditions or any other interest of horseshoers”); Julien v. Soc’y of Stage Dirs. & Choreographers, Inc., No. 68 CIV 5120, 1975 WL 957, at *1 (S.D.N.Y. Oct. 7, 1975) (finding that members of defendant organization “are employees of producers and not independent contractors [and] therefore come[] within the labor exemption”); Int’l Ass’n of Heat & Frost Insulators & Asbestos Workers, etc. v. United Contractors Ass’n, 483 F.2d 384, 390–91 (3d Cir. 1973) (“[C]ourts have sought to fashion the labor exemption . . . according to the . . . analyses of the function of the work in its relevant economic relationships.”); Spence v. Se. Alaska Pilots’ Ass’n, 789 F. Supp. 1007, 1012 (D. Alaska 1990) (“A party seeking refuge in the statutory exemption must be a bona fide labor organization and not independent contractors.” (citing H.A. Artists & Assocs., Inc. v. Actors’ Equity Ass’n, 451 U.S. 704, 717 n.20 (1981))); Ring v. Spina, 148 F.2d 647, 652 (2d Cir. 1945) (“[T]he controversy cannot concern itself with conditions of employment, since none of the parties affected are in any true sense employees. . . . We think the exception therefore inapplicable.”). Show More the Supreme Court’s cases on the issue are few, and offer ambiguous guidance.²⁶26. See Henry H. Perritt, Jr., Don’t Burn the Looms—Regulation of Uber and Other Gig Labor Markets, 22 SMU Sci. & Tech. L. Rev. 51, 143–44 (2019) (“Most labor lawyers assume that independent contractors are outside the scope of the labor exemption, on the strength of Allen Bradley, Columbia River Packers, and a number of lower court opinions. However, the case law supporting that proposition is not as strong as one might assume.”); Michael C. Duff, Labor Viscerality? Work Stoppages in the “New Work” Non-Union Economy, 65 St. Louis U. L.J. 115, 148–49 (2020) (noting “the paucity of authority since Columbia River Packers touching on the question of application of the [Norris-LaGuardia Act] to non-employee workers,” and that “it is difficult to locate any narrowing authority” to support lower court inferences to a categorical rule); Samuel Estreicher & Jack Samuel, Independent-Contractor Unionism and the Antitrust Laws 49–56 (Apr. 4, 2023) (unpublished manuscript) (on file with author) (arguing that the Supreme Court’s precedents do not incorporate the common-law agency tests but rather distinguish workers, including independent contractors who sell only their labor, from independent entrepreneurs). Show More Some labor and antitrust experts side with the lower courts in adopting a categorical approach, while others argue that—as far as the Supreme Court cases go—there remains a grey area in which independent contractors who are not in business for themselves fall within the scope of the exemption.²⁷27. Compare Brief for the United States and the Federal Trade Commission as Amici Curiae at 8, Chamber of Com. v. City of Seattle, 890 F.3d 769 (9th Cir. 2018) (No. 17-36540) (“Independent contractors, as horizontal competitors, may not collude to set the price for their services.”), and Heather M. Whitney, Rethinking the Ban on Employer-Labor Organization Cooperation, 37 Cardozo L. Rev. 1455, 1482 n.143 (2016) (summarizing the current doctrine as categorically excluding independent contractors), with Brief for Professor Samuel Estreicher as Amicus Curiae at 5, Chamber of Com. v. City of Seattle, 890 F.3d 769 (9th Cir. 2018) (No. 17-36540) (“There is nothing in the Clayton Act or Supreme Court decisions on labor’s statutory antitrust exemption that hinges the applicability of the exemption on ‘employee’ status under federal labor relations law.”).Show More

II. The First Circuit’s Decision

Puerto Rico is home to only one racetrack: Hipódromo Camarero in the town of Canóvanas.²⁸28. Jinetes, 30 F.4th 306, 311 (1st Cir. 2022), cert. denied, 143 S. Ct. 631 (2023).Show More The Camarero jockeys are hired by horse owners and paid a twenty-dollar “mount fee” per race—a rate about one-fifth of that paid to their counterparts in the rest of the United States, and which has not changed since 1989—plus prize money for the top five finishers.²⁹29. Id.Show More The jockeys have been unhappy with this arrangement for years; they have also criticized pre-race weigh-in procedures and the conduct of racing officials.³⁰30. Id.Show More On June 10, 2016, several aggrieved jockeys refused to race.³¹31. Id.Show More Race officials fined them; in response, thirty-seven jockeys refused to race for three days.³²32. Id.Show More The horse and racetrack owners sued the jockeys, along with their spouses and two different associations that had been involved in the dispute.³³33. Id. Show More The district court enjoined the work stoppage and awarded summary judgment to the owners, trebling their claimed losses and ordering the jockeys to pay $1,190,685.³⁴34. Id. at 312.Show More

On appeal, the jockeys argued that the labor-dispute exemption should apply. The First Circuit rejected the district court’s categorical exclusion of the jockeys from the protection of the labor-dispute exemption based on their “alleged independent-contractor status.”³⁵35. Id. at 314.Show More It noted that “any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating . . . terms or conditions of employment,”³⁶36. Id. at 313 (quoting 29 U.S.C. § 113(c)).Show More was by statute an exempted labor dispute.

The court interpreted Columbia River Packers as standing not for a categorical exclusion of independent contractor labor organizations but for a distinction between “disputes about wages for labor” and “those over prices for goods.”³⁷37. Id. at 315. The court distinguished Taylor v. Loc. No. 7, Int’l Union of Journeymen Horseshoers, 353 F.2d 593 (4th Cir. 1965) (en banc), along the same lines: The independent contractors in that case did not only sell their labor but sold horseshoes as well, so the dispute was at least partly over prices for goods. Id. at 315 n.3. The First Circuit did not address Women’s Sportswear or Los Angeles Meat and discussed Superior Court Trial Lawyers Association only by way of noting that the labor exemption was not argued. See id. at 316 n.4.Show More Unlike other independent contractor cases, the First Circuit held that, as a “labor only case,” Jinetes did not involve any dispute over prices. “The key question,” according to the First Circuit, “is not whether the jockeys are independent contractors or laborers but whether what is at issue is compensation for their labor.”³⁸38. Id. at 314.Show More

Having established the irrelevance of the jockeys’ employment status as a threshold question determining the exemption’s applicability, the First Circuit applied the four-part test usually reserved for disputes involving employees. The exemption “applies to conduct arising (1) out of the actions of a labor organization and undertaken (2) during a labor dispute, (3) unilaterally, and (4) out of the self-interest of the labor organization.”³⁹39. Id. at 313.Show More The defendant association in Jinetes “advocates for the jockeys’ terms of employment”⁴⁰40. Id. at 314.Show More and thus is “a ‘bona fide’ group representing laborers,”⁴¹41. Id. at 313 (quoting H.A. Artists & Assocs., Inc. v. Actors’ Equity Ass’n, 451 U.S. 704, 717 (1981)).Show More regardless of whether it is “formally recognized as a union.”⁴²42. Id. (citing NLRB v. Wash. Aluminum Co., 370 U.S. 9, 14–15 (1962)).Show More Because defendants struck for “higher wages and safer working conditions,” theirs was “a core labor dispute.”⁴³43. Id. at 314.Show More “The district court erred,” the First Circuit held, “when it concluded that the jockeys’ alleged independent-contractor status categorically meant they were ineligible for the exemption” because “by the express text of the Norris-LaGuardia Act, a labor dispute may exist ‘regardless of whether or not the disputants stand in the proximate relation of employer and employee.’”⁴⁴44. Id. (quoting 29 U.S.C. § 113(c)).Show More

The third and fourth requirements were not in dispute.⁴⁵45. Id. (“The plaintiffs make no assertion that the defendants coordinated with any nonlabor group. And the defendants acted to serve their own economic interests.”).Show More The First Circuit found that the test was satisfied by the facts of the case, and thus that the labor-dispute exemption applied.⁴⁶46. Id. at 316.Show More

III. The Future of Independent Contractor Organizing?

The Jinetes decision offers hope to workers organizing in the platform economy. Citing Jinetes, the Federal Trade Commission (FTC) has recently indicated an intention “not [to] focus [enforcement] on organizing efforts undertaken by gig workers.”⁴⁷47. Fed. Trade Comm’n, Policy Statement on Enforcement Related to Gig Work 14 n.68 (2022), https://www.ftc.gov/system/files/ftc_gov/pdf/Matter%20No.%20P227600%20Gig%20Policy%20Statement.pdf [https://perma.cc/7KLY-TVT2].Show More As an increasing share of the workforce falls outside the protection of the NLRA due to workplace fissuring and the growth of “gig economy” firms,⁴⁸48. See generally David Weil, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It (2014) at 10 (“Employers have incentives to [fissure] for obvious reasons: shifting employment to other parties allows an employer to avoid mandatory social payments (such as unemployment and workers’ compensation insurance or payroll taxes) or to shed liability for workplace injuries by deliberately misclassifying workers as independent contractors.”).Show More and as unionization efforts at workplaces across the country like Amazon and Starbucks continue to gather steam,⁴⁹49. See, e.g., Sharon Block & Benjamin Sachs, Mapping Union Activity at Amazon, OnLabor (Apr. 1, 2022), https://onlabor.org/mapping-union-activity-at-amazon-update-april-1-2022 [https://perma.cc/Y2EJ-RYKC] (“[E]specially when paired with the recent wave of successful Starbucks organizing sweeping the nation, [the union victory in Amazon’s Staten Island facility] could precipitate a surge of union organizing in pivotal economic sectors, such as the service sector, in which unions have traditionally struggled to gain a meaningful foothold.”).Show More replacing the categorical rule with a potentially more flexible standard would be a timely expansion of the right to strike. Exactly how sweeping a change the decision signals will depend on how the wages/prices distinction is applied. Yet the First Circuit said little to indicate how future courts should apply it.⁵⁰50. Some remarks in footnote 3 of Jinetes distinguish Taylor and suggest the surprising conclusion that the distinction mirrors that between selling services and selling goods. Jinetes, 30 F.4th 306, 315 n.3 (1st Cir. 2002), cert. denied, 143 S. Ct. 631 (2023). In Taylor, the workers “provided not just labor but also a product [namely horseshoes] . . . to their customers,” unlike Jinetes, which is a “labor-only” case. Id. This could be interpreted to imply that so long as putative laborers are not selling any goods they are entitled to the labor exemption, which would place plumbers and dentists into the same category as steelworkers, longshoremen, and mail carriers. Whatever the merits of allowing plumbers or dentists to collectively set prices, such a rule would be unlikely to survive further judicial review. It is well-settled law that attempts by dentists’ organizations to set rates constitute illegal cartels. See FTC v. Ind. Fed’n of Dentists, 476 U.S. 447 (1986); see also Marina Lao, Workers in the “Gig” Economy: The Case for Extending the Antitrust Labor Exemption, 51 U.C. Davis L. Rev. 1543, 1563–64 n.88 (2018) (collecting cases). In addition to being overinclusive of professional services providers, such a rule could be underinclusive of workers involved in the production or distribution of goods, so long as their contracts can be structured to construe their pay as a price per unit, though in most cases this would require novel forms of fissuring, as wages cannot be reasonably construed as prices for goods if the workers never own the goods in the first place.Show More

The First Circuit held that Columbia River Packers stands not for the categorical rule based on classification, but for the wages/prices distinction, effectively rejecting the Supreme Court’s claims about the importance of the employer-employee relationship as dicta.⁵¹51. See Jinetes, 30 F.4th at 314–15.Show More If the wages/prices distinction operated independently of employee classification, how was the distinction applied there? In Columbia River Packers, the decision rested partly on the Court’s finding that the fishermen operated with significant independence and had invested capital in their individual fishing operations.⁵²52. Columbia River Packers Ass’n v. Hinton, 315 U.S. 143, 147 (1942) (“[The fishermen] desire[d] . . . to continue to operate as independent businessmen, free from such controls as an employer might exercise.”).Show More Capital investment and independence are among the central criteria in distinguishing independent contractors from employees under the common law “control” test,⁵³53. See Restatement (Second) of Agency § 220 (Am. L. Inst. 1958). Show More which determines employee status under the NLRA.⁵⁴54. See NLRB v. United Ins. Co. of Am., 390 U.S. 254, 256 (1968) (holding that the Taft-Harley amendment of the NLRA’s definition of “employee” to exclude “independent contractors” was intended to incorporate the common-law control test); see also Supershuttle DFW, Inc., 367 NLRB No. 75 at *2 (Jan. 25, 2019) (summarizing NLRB’s interpretation of the common-law control test factors specified in United Insurance).Show More But these factors need not be understood to have legal significance only in the context of employee classification tests. One possible interpretation of Jinetes is that the categorical approach relies on the right factors but is viewed through the wrong doctrinal lens, and thus that capital investment and independence go to distinguishing prices from wages not because prices are by definition paid to contractors and wages to employees—but because employment classification and the wages/prices distinction both reflect the substance of the underlying economic relationships. Rejecting the categorical approach amounts to holding that courts should look directly at the substance of the relationship, in all of its factual richness, without employee classification tests as a mediating analytic step.⁵⁵55. Cf. New Prime Inc. v. Oliveira, 139 S. Ct. 532, 542 (2019) (“[A]s dominantly understood in 1925, a contract of employment did not necessarily imply the existence of an employer-employee or master-servant relationship.”) (emphasis omitted); Chamber of Com. v. City of Seattle, 426 F. Supp. 3d 786, 788 n.3 (W.D. Wash. 2019) (“Plaintiffs argue that the labor exemption applies only in the context of an employer-employee relationship. . . . [A] recent Supreme Court decision makes clear that, at the time the Clayton Act was written, even the narrower term ‘employment’ encompassed both master-servant relationships and independent contractors.” (citing New Prime, 139 S. Ct. at 542–44)).Show More

Inviting courts faced with putative labor disputes to look at the economic relations between workers and management with fresh eyes would be a welcome development for otherwise-misclassified workers. There is a risk, however, of resuscitating a de facto, antitrust-specific classification test if courts parse the same set of factors in a similar way, and it would be unwise to bet on federal courts dramatically revising their general understanding of employment status.

So how should courts understand the wages/prices distinction, if not as common-law employee classification in a different guise? While it offered virtually no detail concerning the nature of a wage dispute, the First Circuit emphasized the Norris-LaGuardia Act was intended to navigate the “inherent tension between national antitrust policy, which seeks to maximize competition, and national labor policy, which encourages cooperation among workers to improve the conditions of employment.”⁵⁶56. Jinetes, 30 F.4th 306, 312 (1st Cir. 2002), cert. denied, 143 S. Ct. 631 (2023) (quoting H.A. Artists & Assocs., Inc. v. Actors’ Equity Ass’n, 451 U.S. 704, 713 (1981)). Show More It does so by acknowledging that while “antitrust law [generally] forbids would-be competitors from colluding to increase prices . . . [w]hen the price is a laborer’s wage . . . a different set of rules apply. That must be so, lest antitrust law waylay ordinary collective bargaining.”⁵⁷57. Id. at 312.Show More New Deal labor policy, in other words, was intended to carve out a space for workers to organize, and the scope of its coverage should reflect that purpose.

Eighty years ago, the Supreme Court faced a similar question: Were newsboys entitled to organize under the National Labor Relations Act, or, as the appeals court below had found, did the NLRA exclude common-law independent contractors? In NLRB v. Hearst Publications, the Court rejected the idea that the control test was appropriate for distinguishing a labor organization from an illegal cartel.⁵⁸58. NLRB v. Hearst Publ’ns, 322 U.S. 111, 120–121 (1944).Show More According to the Court, in enacting the NLRA, “Congress had in mind a wider field than the narrow technical legal relation of ‘master and servant,’ as the common law had worked this out in all its variations, and at the same time a narrower one than the entire area of rendering service to others.”⁵⁹59. Id. at 124.Show More Interpreting the category of covered employees in light of the purposes of the NLRA, the Hearst Court found that, because some workers classified as independent contractors under agency law face the same “[i]nequality of bargaining power in controversies over wages, hours and working conditions” as those classified as employees, and “when acting alone, may be as helpless in dealing with an employer, as dependent on his daily wage and as unable to leave the employ and to resist arbitrary and unfair treatment,”⁶⁰60. Id. at 127 (internal quotations omitted).Show More the Board’s determination that they were covered employees was due judicial deference.

Hearst was overturned by the Taft-Hartley Act.⁶¹61. Labor Management Relations (Taft-Hartley) Act, 29 U.S.C. § 151; see also NLRB v. United Ins. Co., 390 U.S. 254, 256 (1968) (holding the use of “independent contractor” in the Taft-Hartley Act as intended “to have the Board and the courts apply general agency principles in distinguishing between employees and independent contractors under the Act”).Show More While Taft-Hartley was specifically targeted at amending the NLRA to weaken unions, it did not touch the Norris-LaGuardia antitrust exemption, which draws its purpose from the same policy framework: The New Deal scheme of labor regulation was intended to remedy inequalities of bargaining power and to protect collective self-help by workers.⁶²62. 75 Cong. Rec. 5461, 5487 (1932) (statement of Rep. Charles Sparks); cf. Hiba Hafiz, Labor Antitrust’s Paradox, 86 U. Chi. L. Rev. 381, 386–87 (2019) (“The NLRA justified worker combinations as a countervailing power that, in the words of its sponsor, Senator Robert Wagner, ‘match[ed] the huge aggregates of modern capital.’”) (citing Senator Robert Wagner, The New Responsibilities of Organized Labor, Address to the New York State Federation of Labor Convention ¶ 5 (1928), reprinted in 70 Cong. Rec. 225, 227).Show More Interpreting the labor-dispute exemption in light of labor policy, rather than the common law of agency, requires looking at the substance of the economic relation, including the extent to which it reflects inequality of bargaining power between workers and dominant firms. The Hearst Court drew on the preamble to the NLRA to interpret that statute’s purpose, but the Norris-LaGuardia Act’s stated policy aims were essentially the same: to ensure that independent contractors were “free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”⁶³63. 29 U.S.C. § 102.Show More

Courts could, and perhaps should, adjudicate labor-dispute exemption cases by looking directly to the substance of the economic relation at issue, considering the purposes of New Deal labor law, rather than the common law of agency. And if the key to the labor-dispute exemption is the wages/prices distinction, antitrust doctrine may need to account for the economic context in which the economic relation is formed, including the market power on the other side.⁶⁴64. See generally Brian Callaci & Sandeep Vaheesan, Antitrust Remedies for Fissured Work, 108 Cornell L. Rev. Online 27 (2023) (arguing that antitrust law should prevent corporations from controlling the business decisions of distributors and suppliers); Sanjukta Paul, Antitrust as Allocator of Coordination Rights, 67 UCLA L. Rev. 378 (2020) (exploring antitrust law’s preference for coordination via vertical contracting, as opposed to horizontal, interfirm coordination).Show More In Jinetes, the owners of the horses and the track enjoyed a monopoly over Puerto Rican horse racing and thus a monopsony over the relevant labor market,⁶⁵65. Jinetes, 30 F.4th 306, 311 (1st Cir. 2022), cert. denied, 143 S. Ct. 631 (2023).Show More but the First Circuit did not address the relevance, if any, of the monopsony power of the plaintiffs. An analysis of unequal bargaining power could help make clear why the jockeys, who have no meaningful ability to bargain over their pay, should be considered as earning a wage rather than being paid a price: What makes a wage a wage, rather than a price for independently provided services, may not only be the capital investment or independence of the recipient, but also the market power of the payor.⁶⁶66. Analysis of market power already has a role in antitrust doctrine, albeit a limited one in recent decades. Courts consider the market power of defendants in a rule of reason analysis. See, e.g., Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 27–29 (1984) (finding a “tying” practice permissible in part due to the defendant’s lack of market power).Show More Whether future courts will interpret the wages/prices distinction in light of an analysis of market power remains to be seen.

Conclusion

The racetrack and horse owners filed a petition for certiorari on October 4th, 2022, identifying the question presented as “Whether the statutory labor exemption from the operation of the antitrust laws, which exempts ‘labor dispute[s]’ that ‘concern[] terms or conditions of employment,’ encompasses concerted action by independent contractors that do not relate to an employer-employee relationship.”⁶⁷67. Petition for Writ of Certiorari at i, Jinetes, 30 F.4th 306 (No. 22-327).Show More

The jockeys’ opposition brief emphasized, among other things, the public meaning of “employment” when the Clayton and Norris-LaGuardia Acts were passed, no doubt with an eye on the Court’s embrace of textualism and in hopes of convincing at least one more of the Court’s six conservative justices to follow Justice Gorsuch’s lead in New Prime.⁶⁸68. See Respondents’ Brief in Opposition at 18–20, Jinetes, 30 F.4th 306 (No. 22-327).Show More While the jockeys construed the First Circuit’s decision as consistent with prior Supreme Court and federal appeals courts decisions⁶⁹69. See id. at 9–15.Show More (as had the First Circuit), the owners portrayed the categorical exclusion of workers classified as independent contractors, where no “employer-employee relationship [i]s the matrix of the controversy,”⁷⁰70. Columbia River Packers Ass’n v. Hinton, 315 U.S. 143, 147 (1942).Show More as clearly established by prior case law.⁷¹71. Reply Brief for Petitioners at 1–7, Jinetes, 30 F.4th 306 (No. 22-327).Show More

If the Supreme Court agreed with the owners’ understanding of its prior decisions, it chose not to say so: on January 9th, 2023, the Court denied the petition for certiorari without explanation or noted dissent.⁷²72. See Confederación Hípica v. Confederación de Jinetes Puertorriqueños, 143 S. Ct. 631 (2023).Show More At least within the First Circuit, workers classified as independent contractors now have the right to strike over wages and other terms and conditions of employment.