A federal agency last week accused the companies that created and produce the Netflix reality television series “Love is Blind” of misclassifying the contestants on the show as independent contractors (ICs) instead of employees. The complaint issued by a regional director of the National Labor Relations Board (NLRB) against the reality show production companies has created a great deal of concern throughout the industry. Nonetheless, just as we have said in past blog posts about lawsuits targeting the adult entertainment club industry and companies providing children’s entertainment, the reality TV industry can likewise take steps going forward to minimize or avoid IC misclassification liability while maintaining their current IC business model. Companies that use ICs to provide services have utilized a process such as IC Diagnostics (TM) to structure, document, and implement their IC relationships in a manner that maximizes compliance with applicable laws, and does so in a sustainable and customized manner consistent with their own particular IC business models.
The mainstream media has written that the NLRB’s filing against the reality show production companies “could have ripple effects across the reality TV industry,” and an entertainment news outlet has said that this legal development “would set an industrywide precedent if it became policy.” But those conclusions are based on the industry remaining static and not taking the types of steps described below to minimize or eliminate the impact of this current legal challenge.
The NLRB Complaint
The NLRB itself does not initiate charges against companies; it instead investigates unfair labor practice charges filed with a Regional Office of the NLRB by persons or entities. Only if a Regional Director finds that a charge may have merit does the Regional Director issue a complaint.
The National Labor Relations Act (NLRA) provides workplace protection to employees seeking to unionize and those who are unionized, as well as non-union workers engaged in other types of protected “concerted activities” implicating workplace terms and conditions, but like almost all other labor and employment laws, it excludes ICs.
In this case, the charges were filed with the NLRB’s Minneapolis regional office by two contestants against the production companies, Delirium TV, LLC and Kinetic Content, LLC. The charges reportedly coincided with lawsuits filed by one of the charging parties and another contestant related to their physical safety on the show.
The contestants contend that they are employees covered by the NLRA and that the production companies allegedly have interfered with and restrained them after they claim to have asserted their rights under the NLRA including their right to a safe workplace. The Regional Director for the NLRB’s Minneapolis office agreed that the contestants should be regarded as employees under the NLRA, not ICs. She issued a complaint on December 11, 2024. It has two main components:
- first, a set of allegations that the production companies required the contestants to enter into a Participant Release Agreement that the Regional Director asserts has many clauses (a) allegedly intended to discourage participants from engaging in protected “concerted activities” guaranteed under the NLRA to individuals who qualify as “employees” under that law, and (b) allegedly intended to deprive them of “employee” rights under the NLRA; and
- second, a series of allegations that the production companies, among other things, allegedly (a) threatened the contestants with legal action for engaging in protected activities such as complaining about their working conditions; (b) directed them to maintain the confidentiality of their complaints including those about their safety; and (c) filed arbitration proceedings against the contestants for breach of the Participant Agreement.
Notably, the NLRB complaint does not articulate the rationale for the Regional Director’s assertion that the two contestants are “employees” under the NLRA and not independent contractors. Instead, the complaint simply cites to 42 lengthy provisions in the Participant Agreement including a number that presumably direct and control the contestants in the manner by which they perform their services. As we noted in an earlier blog post, the absence of direction and control over the way in which workers perform their services, viewed in the context of an entrepreneurial opportunity for profit and loss, is the main focus of the current test for IC status under the NLRA. This test was articulated most recently by the NLRB in its June 13, 2023 decision in The Atlanta Opera case.
The Legal Context
Issuance of a complaint by a regional director is the first of many steps in a legal proceeding under the NLRA. After the production companies file their answer to the complaint, where they will undoubtedly dispute the employee status of the contestants, the matter will then be scheduled for a hearing before an NLRB administrative law judge (ALJ), who will address the issue of whether the contestants are employees covered by the NLRA or ICs who are not. The ALJ’s decision will then be subject to appeal to the full NLRB in Washington, D.C. That decision is then subject to review by a U.S. Court of Appeals. A final decision in this case is two or more years away.
The NLRA is only one of many federal laws impacting IC misclassification. Other federal laws where ICs are excluded, such as laws governing wages and hours, employee benefits, discrimination, workplace safety, and tax, each have their own test for IC status – and none of those laws has a test for IC status identical to the one used by the NLRB. In addition, each state has its own tests for IC status under similar workplace laws as well as additional state laws covering the frequency of wage payments, expense reimbursement, medical leaves, unemployment, and workers’ compensation. Thus, regardless of what is ultimately decided years from now about the IC status of the two contestants in the NLRB proceeding involving “Love is Blind,” the result in this case will not be determinative of the IC status of reality TV contestants under other federal or state laws.
But that does not mean the industry shouldn’t take heed of what is transpiring at the NLRB. Rather, prudent businesses in the reality TV business and other entertainment industries would be well advised to stay ahead of the curve by undertaking steps designed to minimize future claims of IC misclassification of contestants under federal and state laws.
Steps to Enhance IC Compliance
As noted, the NLRB complaint focuses heavily on clauses in the Participant Agreement. Even if those provisions are ultimately found by the NLRB and the courts to establish employment instead of an IC relationship, there is no reason that production companies should not proactively examine their participant agreements at this time to eliminate needless direction and control over contestants. This step will maximize their likelihood of avoiding IC misclassification liability in the future. A process such as IC Diagnostics (TM) focuses on restructuring, re-documenting, and re-implementing the IC relationship in creative ways to maximize compliance with most if not all IC laws, yet does so in a manner that retains the current business model.
Rather than prompting concern that this new NLRB case will create liability or require changes to the nature of the relationship between reality TV shows and their contestants, this NLRB case should instead serve as a clarion call for production companies to enhance their IC compliance without altering the well-established business model in the industry.