What to Expect Next

In this Q&A, Michael Lotito of the Littler law firm explains what the post-election federal, state and judicial landscape looks like for independent contractors.

On Friday afternoon, I hopped on a video call with Michael Lotito, founder and co-chair of Littler's Workplace Policy Institute.

The Littler law firm has been exceptionally helpful in recent years to independent contractors who are trying stop the freelance-busting attacks against us. For instance, the Littler firm—entirely pro bono—helped all of us in Fight For Freelancers file a 46-page amicus brief that we wrote for the U.S. Supreme Court. We did the writing, and Littler’s team helped us with the filing process, which is quite complicated. Littler’s team could not have shown us more kindness or support.

Lotito also keeps an ear to the ground in Washington, D.C., and has a good perspective on what to anticipate in the upcoming months and years, in the wake of last week’s election results.

The New York Times presidential election map

Lotito and I spoke about expectations for independent contractors at the federal and state levels, and in the judiciary.

Here’s our conversation.

Q&A with Michael Lotito

We are doing this interview on Friday, November 8. The Trump-Vance ticket has won the White House. Republicans have taken control of the Senate. The outcome in the House of Representatives is still undecided, but the signs are all pointing toward the Republicans keeping their majority there, too.

With all of that in mind, let’s start by talking about the federal level and what’s going to come next. Let’s start with legislation.

I think this election result means the PRO Act is dead, and we can potentially try for something like the Modern Worker Empowerment Act to protect independent contractors, right?

Well, certainly the PRO Act is dead. I think that there may be a unique opportunity, given the margin in the Senate and the likelihood, as you say, that the House will be Republican to do some kind of a legislative effort to protect independent contractors.

Whether that means the portable benefits model or some of these other models, I'm not exactly sure, but we should try to make that a high priority, and we certainly should be talking to the respective committees.

Tim Walberg of Michigan will probably be the chairman of the Education and Workforce Committee in the House, and he’s certainly a very knowledgeable guy and an easy person to work with, and a good leader. And then on the Senate side, we hope that Senator Bill Cassidy of Louisiana will continue as the chair. That's dependent upon seniority rules in the Senate, but we hope that Senator Cassidy will continue, and he, too, is somebody who’s easy to work with.

And, I think that there are people in the White House with great influence that have been fighting this independent contractor fight for a long time.

I think it’s time to overcome—I saw this morning that the Department of Labor said that there’s 10 million freelancers. Now, you know and I know that it’s ridiculous. It’s absolutely absurd. I mean, the MBO studies, all of the other studies, demonstrate that the numbers are in the multiple of millions, and we know that individuals would prefer to work for themselves, and we know that has really multiplied since Covid.

And we know that people have had it with working for an S-S-O-B backwards instead of good B-O-S-S. Individuals want to have their destiny in their own hands, and this country should be embracing that, as opposed to taking people—like in the Massachusetts situation that just passed—and putting them in a sectoral bargaining situation with like, 5 percent notice, and putting them in a union where they probably wouldn’t even know that they’re in it, and being treated like everybody else with the same terms and conditions of employment, when, in fact, what they’re trying to do is work for themselves.

I’m going to get to the states and Massachusetts in a minute. Staying at the federal level, a follow-up question: We are correct, I think, at the grassroots level, that if we want to push for something that protects our very basic freedom to choose self-employment, we can do that right now, correct? This is a good time to do that?

This is a perfect time to do that. I think it’s critically important.

And you know, there’s an awful lot of people that voted Republican this time, including about 44 percent of union members in industrial unions. There’s a lot of other people who also voted based upon workforce transformation and the failure of the government to give them help and pathways to continued success.

I’ve told this story so many times: When I started out 50 years ago, there were 1.5 million auto workers. Today, the United Auto Workers union is 400,000 people, and only 150,000 of them are in auto plants. What happened to all of those people? What happened to those jobs, those jobs that were generational jobs, jobs that fathers and mothers passed on to sons and daughters? That’s the heartland of this country, and we did nothing to come up with a workforce plan in order to be able to deal with that.

You’ve heard me talk about this over and over and over again: This is a moment in time for people to say, “We want to work the way we want to work.” This is a moment in time for people to say, “We want freedom to choose, and we do not want to be put into a mandated group that we have no say over in order to have the same terms and conditions of employment.”

That is not what we’re doing anymore, and this is the time to include those concepts in the workforce transformation that needs to take place, because the Trump administration needs to be offering everybody a better deal. And part of that better deal is the opportunity, if they so desire, to work for themselves. And maybe that means, if you’re working for yourself, you get some benefits and you get some rights without having to be called an employee, because some rights are fundamental. Nobody should be sexually harassed. Nobody should be discriminated against. People have the right to have benefits.

Let’s take all of these ideas. Let’s walk into a room and say nothing is off the table. Let's lock some people up for two weeks to three weeks and four weeks and not let them come out. And let’s come up with a plan that’s going to work.

Let’s do it now, because I’m not getting any younger. My granddaughters aren’t either.

I’m here for it, as you know. Let’s get it done.

And while we’re at it, also at the federal level, we have the White House changeover, which means we’re going to get a new labor secretary at the U.S. Labor Department.

Based on what you’re hearing so far, do you think we can expect somebody who doesn’t want to harm and threaten independent contractors, but instead will help to protect our freedom to be self-employed?

Absolutely. Period. Full stop.

From what I saw during the campaign, the Trump-Vance ticket didn’t talk that much on the stump about the independent-contractor issue, so no one has actually come out and said, “We’re going to have somebody who respects independent contractors.”

I’m hopeful that is the case based on what President Trump did last time. Based on what you’re hearing, do you think my assumption is correct?

Yes, I think that there will be a favorable response. Keep in mind that Mr. Trump and Mr. Vance both, in significant speeches, mentioned union workers as well as non-union workers. This is about workers and having rights to choose.

Some workers, for example, construction workers, they very well may want to be in a union, and it may work for them, and God bless them. Other people may not, and God bless them too.

I think that there’s this populist notion that the president-elect and the vice president-elect are going to have to deal with: There's many people that have been disenfranchised by the government, by both Republicans and Democrats, and have voiced their frustration to get this red wave across the country. They have to be taken very seriously, because if a better deal is not offered, they’ll continue to be angry, and you’ll see a change in two years.

Americans certainly showed that we can vote en mass in this election.

That’s right. And there’s a terrible Senate map for the Republicans in two years, and we know that traditionally, whoever holds the House, in two years, winds up losing it.

So the administration is going to have to go very quickly with this concept, of the better deal, and start reaching out to folks—and that includes, obviously, independent contractors.

Let’s also talk about the pending federal lawsuits against the U.S. Labor Department. I believe there are still five of them, including one where I am a plaintiff that’s in the appeals phase. Your team at Littler is handling the one that was filed in Texas, where the plaintiffs include the Coalition for Workforce Innovation and the U.S. Chamber of Commerce.

The case you’re working on, I'm pretty sure, has always been considered the strongest, the one most likely to have a chance of winning. What do you think happens next with these lawsuits and with the current rule that is in place at the U.S. Department of Labor for independent contractors?

In our case, we’re waiting for a decision. That decision can come down at any time. If that decision comes down between now and January 20, and it is an obliteration of the rule, then the current Department of Labor may appeal that decision. I think that once the Trump administration is in place, they'll abandon that appeal.

Courts aside, if the Trump administration wants to change the rule from within the Labor Department—if they just wanted to go back to the previous rule that was better for independent contractors—they would have to go through the whole rule-making process again, right? The process that takes a year or two with all the public comments?

Yes. And that process is very, very detailed. It is designed to trip up the best of people. And now, with U.S. Supreme Court precedent about the Chevron doctrine and deference to agencies, it’s become even more problematic to go through this rule-making to demonstrate that it’s justifiable for you to engage in it at all.

The other option here is that the judge says that the rule is good—which I don't think he’s going to do—but under those circumstances, I think that the Trump people would appeal that ruling.

We’re in a very strange time here. In our system of government, there’s only one sheriff, and that sheriff, until January 20, is President Biden. And Julie Su is still there as the acting U.S. labor secretary. I think they’re going to be occupied, not so much by the independent contractor rule, but by the possibility of a port strike that would completely disrupt the supply chain in the country.

They bought themselves time to get the strike beyond the election so it wouldn't negatively impact their chances, and they neutered the companies’ ability to negotiate something, because now the wage increase is already in place at 66 percent. And you have the president of the union saying there should be no automation at the ports. He’s making the Luddites proud of them. All of these other terms are now up for negotiation, so we have a very, very serious problem, which absolutely nobody is talking about.

We’re going to be forced to talk about it, as you say, if, if that comes to pass.

Merry Christmas and Happy New Year. And Happy Hanukkah, too.

It’s good to know that one way or the other, the courts or regulatory rule-making, we probably are going to see the current U.S. Labor Department independent contractor rule undone. Is that your gut?

Yes, more than my gut. It’s going to happen.

Also at the federal level, we have the National Labor Relations Board, which was making a lot of anti-independent contractor noise these past four years too.

Are you expecting a new general counsel to be appointed on day one of the Trump administration? The same way President Biden came in and fired Peter Robb? What will happen there, and what will that mean for independent contractors?

Well, Jennifer Abruzzo, who is the current general counsel at the NLRB, will definitely be fired on day one.

But you can’t put in a new general counsel, because that person has to be approved by the Senate, and that’s probably not going to happen until May, June or July. But you can put in an acting general counsel, and that will probably happen, and they will begin to undo a lot of Jennifer Abruzzo’s agenda as quickly as they can.

The next issue is, how quickly does the new president get to pick the majority of the National Labor Relations Board? There’s one position that’s open now, so we’ve only got four people, but Chairwoman Lauren McFerran has been renominated, and the question is, can she get confirmed during the lame-duck session? The answer is that it’s going to be a climb, because I don’t think she has the votes, but in order to vote, senators have to be there. And given the fact that three Democratic senators have lost their seats, are they coming back?

Other people aren’t going to hang around until the current session ends December 21. Democratic Senate Majority Leader Chuck Schumer is very good at counting noses, so you could have a day when there’s 80 senators there, so that could line up, or is Mr. Schumer going to focus on judges? Because if you’re going to appoint somebody for a five-year term on the NLRB versus somebody for a term that’s going to last forever in the courts, you don’t have to be a rocket scientist to figure out you’re going to go for forever. And the remaking of the judiciary is going to be very much on Mr. Schumer’s mind, because those open positions would then get filled by President-elect Trump, and obviously, the Democrats don’t want to see that happen.

So there’s going to be a lot to play out here, and it’s going to get very weedy. If Lauren McFerran is not reappointed at the NLRB, her term ends on, I think it’s December 6, something like that. And then Mr. Trump would have a board composed of three members. He would immediately make Marvin Kaplan, the current Republican member of the board, the chair of the board. Mr. Trump would also have two NLRB seats open, and he might decide to fill those two seats with Republicans, which would be his right to do and consistent with tradition.

For people who aren't familiar with Mr. Kaplan, is he a person who’s likely to not want to hurt independent contractors?

Yes, that’s correct. And the other two, whoever Mr. Trump nominates, they’re not going to want to hurt independent contractors either.

So we may have a change in the board quickly—six months, seven months, eight months—and then it takes time for the new board to start issuing decisions, and it'll take time to get a new general counsel in, so things don’t happen overnight.

Of course, the other possibility is that Chairwoman McFerran does get confirmed during the lame-duck session. That would give the Democrats the majority control on the NLRB effectively until August of 2026, which means you wouldn’t start getting pro-company type decisions or pro-independent contractor dealings until 2027 or even 2028, unless the president decides to essentially fire everybody on the board and test the whole concept constitutionally as to whether or not the board members serve at the pleasure of the president.

And there’s even another scenario, if you’re still with me.

I’m still with you.

In this scenario, Chairwoman McFerran could meet the standard which currently exists for firing with just cause, because of the problems with the mail ballots and a bunch of other things, including decisions by circuit courts that have criticized her.

In some ways it’s really too bad, because Lauren McFerran is a very nice person. I just disagree with her, and as chairwoman of the board, she has to take responsibility for this radical direction that the board has taken. It’s just like Jennifer Abruzzo. She’s a very nice person. It’s just that her views are very different than a lot of other people. So it’s really not personal. It’s really professional. It’s about policy.

Let’s also talk about the states, especially the blue states, where Democrats have trifecta control of government.

The freelance-busting brigade is now going to have all of their federal paths blocked. Do you expect them to push more in the blue states for that reason—especially the states with trifecta Democratic Party control? Are those states going to become the new hotbed of efforts to try and restrict independent contractors?

I think there's a good possibility of that.

However, there are also changes coming there too. In Minnesota, there’s a task force on misclassification that has been meeting, and that is expected to recommend that the lawmakers enact and ABC Test similar to California’s Assembly Bill 5. Well, Minnesota has just flipped from a Democratic trifecta, and it’s no longer one. So in Minnesota, you might see legislation, but I don’t think it’s going to pass. It can be a lobbying nightmare, but I don’t think it’s going to pass.

In Massachusetts, you have the other extreme, where in a very narrow vote, there’s now been this initiative enacted that creates a sectoral bargaining concept for the rideshare independent contractors.

That’s the ballot measure just passed by Massachusetts voters, right?

Yes. The rideshare companies have issued some statements suggesting that the Massachusetts Legislature needs to fix this, but the question is how to fix it.

The Massachusetts situation is very disturbing, because it's similar to the Fast Food Council in California. Unionization is going to be done through the groupings of people.

Everybody is definitely going to have to read up about what sectoral organizing is—what the U.S. Chamber of Commerce calls cartel organizing—and be ready to stand up for our freedom to choose self-employment on that front too.

In the meantime, how do you think everyday, grassroots independent contractors should be spending our time? What is the most effective thing we can be doing right now and after the lawmakers all change over in January?

The most effective union organizer today is a politician who needs union support. So from an advocacy standpoint, independent contractors need to step up and engage with lawmakers if they want to protect their rights in order to continue to work the way they want to work, especially in the blue states.