Hunton Employment & Labor Perspectives

As anticipated and previously reported, the Republican-controlled Board is overturning Obama-era rulings. For example, in a recent decision, SuperShuttle Inc. DFW, Inc. (16-RC-010963), the National Labor Relations Board affirmed the Board’s adherence to the traditional common-law agency test.  This decision overrules the NLRB’s 2014 Decision, FedEx Home Delivery, 361 NLRB No. 65, which had modified the NLRB’s long-standing test for independent contractor status.

Here are the key points of the NLRB’s decision in SuperShuttle DWF, Inc.:

SuperShuttle DFW, Inc., involved franchisees who operated shuttle-share-ride vans for SuperShuttle at Dallas-Fort Worth Airport.

Returning to the traditional common-law agency test, the Board concluded that the franchisees were independent contractors who were excluded from the National Labor Relations Act’s (NLRA) coverage and not  statutory employees under the NLRA pursuant to the independent contractor test previously articulated by the FedEx Board.

The Board found that the FedEx Board had impermissibly altered the long-standing precedent of the Board’s independent contractor test by fundamentally shifting it to one that selectively overemphasized the significance of ‘right to control’ factors relevant to perceived economic dependency and diminished the significance of entrepreneurial opportunity.

Instead, the Board held that the independent contractor status should be examined by common law factors and explained that “entrepreneurial opportunity” is a principle to be used to help evaluate the overall significance of the agency factors.

The Board provided guidance that common-law factors that support a worker’s entrepreneurial opportunity indicate independent contractor status and factors that support employer control indicate employee status.

Under this analysis, the Board found that the following factors weighed in favor of independent contractor status, which were analogous to those in the taxicab industry:  that SuperShuttle did not exercise control over the manner or means by which the drivers conducted business, which signaled the existence of significant entrepreneurial opportunity since the franchisees had complete autonomy over their schedules and were free to choose where they work without set routes; the method of payment, also traditionally given significant weight, also indicated entrepreneurial opportunity since the franchisees were entitled to all fares paid by customers and did not share the fare with SuperShuttle in any way; and the fact that the franchisees had full-time possession of their vans and were responsible for gas, tolls, repairs and other costs associated with their vans.

The Board’s return to its long-standing common-law agency test will mean that companies will want to re-evaluate the status of employees who were classified or reclassified as such based on the Board’s ruling in FedEx.