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BarJournal LABOR & EMPLOYMENT

JULY/AUGUST 2015
feAtUre employee or independent contractor?

The NLRB’s Shift From Control to

Entrepreneurial Opportunity

BY AARON SCHMIDT

he question of whether a The Traditional Independent Contractor Test NLRB and the District of Columbia Circuit
worker is an employee or an Under Section 2(3) of the NLRA, independent Court of Appeals, which reviews the NLRB’s
independent contractor, and contractors are excluded from statutory decisions, have increasingly looked to a worker’s
what factors will be used to make coverage. Prior to the FedEx 2014 decision, entrepreneurial opportunity for gain or loss as
T that determination, has been the Board used the common law agency test to part of its independent contractor analysis.
at issue for over a century. The distinction is determine whether a worker was an employee In 2009, the D.C. Circuit observed that over
significant as independent contractors are not or an independent contractor. See Restatement time, the Board had shifted the emphasis from
afforded the protections and benefits provided (Second) of Agency § 220 (1958). The non- employer control to whether a worker has
to employees. The two classifications are even exhaustive list of ten factors includes: significant entrepreneurial opportunity for
more consequential today with the tremendous 1. The extent of control which, by the gain or loss. FedEx Home Delivery, 563 F.3d
growth of the “sharing” and “gig” economies. agreement, the master may exercise over 492, 497 (D.C. Cir. 2009) (“FedEx 2009”). The
On January 25, 2019, the National the details of the work. court noted that “while all the considerations
Labor Relations Board (“NLRB”) issued an 2. Whether or not the one employed is engaged at common law remain in play, an important
important decision in SuperShuttle DFW, Inc., in a distinct occupation or business. animating principle by which to evaluate
367 NLRB No. 75 (2019) (“SuperShuttle”), 3. The kind of occupation, with reference to those factors in cases where some factors cut
holding that drivers who operated shared whether, in the locality, the work is usually one way and some the other is whether the
ride vans were independent contractors, done under the direction of the employer or position presents the opportunities and risks
not employees, under the National Labor by a specialist without supervision. inherent in entrepreneurialism.” Id.
Relations Act (“NLRA”). The Board found 4. The skill required in the particular
that the drivers’ leasing or ownership of their occupation. The Board’s 2014 FedEx Decision
vans, their method of compensation, and 5. Whether the employer or the workman Five years later, the Obama-era 2014 Board
their control over their daily work schedules supplies the instrumentalities, tools, and rejected the significance of entrepreneurial
demonstrated a significant entrepreneurial the place of work for the person doing the opportunity in the independent contractor
opportunity for economic gain, as well as a work. analysis. FedEx Home Delivery, 361 NLRB
significant risk of loss. 6. The length of time for which the person is at 610. Instead, the Board created a new
In the process, the Board overturned FedEx employed. factor to be considered in its analysis:
Home Delivery, 361 NLRB 610 (2014) (“FedEx 7. The method of payment, whether by the whether the evidence tends to show that
2014”), an Obama-era decision that refined the time or by the job. the worker is, in fact, rendering services as
independent contractor test and limited the 8. Whether or not the work is part of the part of an independent business. Id. at 620.
importance of entrepreneurial opportunity. The regular business of the employer. The Board characterized entrepreneurial
SuperShuttle Board returned to the traditional 9. Whether or not the parties believe they are opportunity as simply one aspect of their
common law test for independent contractor creating the relation of master and servant. new factor. Thus, the Board rejected
status and restored entrepreneurship as a key 10. Whether the principal is or is not in the D.C. Circuit’s instruction to treat a
element in the analysis. business. worker’s entrepreneurial opportunity for
The NLRB’s decision is extremely important In applying this test, no one factor is gain or loss as an “animating principle” of
for the fast-growing sharing and gig economies, determinative. Each factor must be assessed the independent contractor analysis, and
and any other industries that utilize independent and weighed accordingly. relegated it to merely an element of one of
contractors. This new development suggests the common law factors.
that employers can expect that it will be easier Entrepreneurial Opportunity The FedEx 2014 Board also stated that
than before to show that a worker should be The traditional independent contractor test’s only actual, not theoretical, entrepreneurial
classified as an independent contractor, instead ten factors are non-exhaustive and allow for opportunity should weigh in favor of a finding
of an employee. the consideration of additional factors. The of independent contractor status, and that
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