“If you don’t like the weather, wait five minutes,” is a common refrain to which a whole host of locales around the country lay claim, including Wisconsin in the spring. It’s also a sentiment that some might be tempted to apply to the standard the National Labor Relations Board has employed of late when determining whether a worker is an employee covered under Section 2(3) of the National Labor Relations Act (NLRA) or an independent contractor, who is excluded therefrom. On June 13, 2023, in Atlanta Opera, Inc., the NLRB overruled the standard it adopted in 2019 and reinstated its previous standard, one set out in 2014’s FedEx Home Delivery, 361 NLRB 610 (2014) (“FedEx II”).
Under the FedExII standard, whether a worker is an independent contractor depends on analysis of non-exhaustive common-law factors, with no one factor being decisive. These factors include:
the extent of control which, by the agreement, the employer may exercise over the details of the work;
whether the worker is engaged in a distinct occupation or business;
the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
the skill required in the particular occupation;
whether the employer or the worker supplies the instrumentalities, tools and the place of work for the worker;
the length of time for which the worker is employed;
the method of payment, whether by the time or by the job;
whether or not the work is a part of the regular business of the employer;
whether or not the parties believe they are creating an employer-employee relationship; and
whether the worker is rendering services as part of an independent business.
Under the FedExII standard, the worker’s entrepreneurial opportunity represented just one aspect of this tenth factor (whether the worker is operating an independent business).
FedEx II was overruled in 2019, by SuperShuttle DFW, Inc., 367 NLRB No. 75. SuperShuttle held that all these common law factors should be viewed through the prism of entrepreneurial opportunity, when the specific factual circumstances of the case allow for such an evaluation. Thus, emphasis was now placed on the degree to which workers could control and increase their own services, revenue or profit. The Atlanta Opera decision criticized this approach as treating entrepreneurial opportunity as “a sort of super-factor.”
Now, in Atlanta Opera, the Board held that the 2019 SuperShuttle decision could not be reconciled with the mainstream of Board law, the common law or Supreme Court precedent. The Board’s see-sawing tests are all different interpretations of the United States Supreme Court’s 1968 directive that “the total factual context is assessed in light of pertinent common-law agency principles.” NLRB v. United Insurance Co. of America, 390 U.S. 254, 258.
Interestingly, all four current members of the Board found the stylists were employees (the Board’s fifth seat is presently vacant). But the Board’s lone Republican, Marvin Kaplan, dissented from the reversal of the SuperShuttle decision. Kaplan, who had been part of the SuperShuttle majority, stated in his dissent that the 2019 SuperShuttle decision “provides the most effective measure for determining the important issue of whether individuals should be considered employees.” Under this approach, he agreed with the majority regarding the stylists’ appropriate classification as employees.
Author: Jerilyn Jacobs
“If you don’t like the weather, wait five minutes,” is a common refrain to which a whole host of locales around the country lay claim, including Wisconsin in the spring. It’s also a sentiment that some might be tempted to apply to the standard the National Labor Relations Board has employed of late when determining whether a worker is an employee covered under Section 2(3) of the National Labor Relations Act (NLRA) or an independent contractor, who is excluded therefrom. On June 13, 2023, in Atlanta Opera, Inc., the NLRB overruled the standard it adopted in 2019 and reinstated its previous standard, one set out in 2014’s FedEx Home Delivery, 361 NLRB 610 (2014) (“FedEx II”).
Under the FedEx II standard, whether a worker is an independent contractor depends on analysis of non-exhaustive common-law factors, with no one factor being decisive. These factors include:
Under the FedEx II standard, the worker’s entrepreneurial opportunity represented just one aspect of this tenth factor (whether the worker is operating an independent business).
FedEx II was overruled in 2019, by SuperShuttle DFW, Inc., 367 NLRB No. 75. SuperShuttle held that all these common law factors should be viewed through the prism of entrepreneurial opportunity, when the specific factual circumstances of the case allow for such an evaluation. Thus, emphasis was now placed on the degree to which workers could control and increase their own services, revenue or profit. The Atlanta Opera decision criticized this approach as treating entrepreneurial opportunity as “a sort of super-factor.”
Now, in Atlanta Opera, the Board held that the 2019 SuperShuttle decision could not be reconciled with the mainstream of Board law, the common law or Supreme Court precedent. The Board’s see-sawing tests are all different interpretations of the United States Supreme Court’s 1968 directive that “the total factual context is assessed in light of pertinent common-law agency principles.” NLRB v. United Insurance Co. of America, 390 U.S. 254, 258.
Interestingly, all four current members of the Board found the stylists were employees (the Board’s fifth seat is presently vacant). But the Board’s lone Republican, Marvin Kaplan, dissented from the reversal of the SuperShuttle decision. Kaplan, who had been part of the SuperShuttle majority, stated in his dissent that the 2019 SuperShuttle decision “provides the most effective measure for determining the important issue of whether individuals should be considered employees.” Under this approach, he agreed with the majority regarding the stylists’ appropriate classification as employees.