The Role of Entrepreneurial Opportunity in NLRB Decisions
The National Labor Relations Act (“NLRA”) protects the rights of both employees and employers and encourages collective bargaining. However, the NLRA does not apply to “independent contractors.” In 2014, the National Labor Relations Board (“NLRB”) issued a Decision and Order in FedEx Home Delivery. In that decision, the board considered the role that “entrepreneurial opportunity” should play in determining whether someone is an independent contractor or employee. The FedEx Home Delivery decision devalued the weight of entrepreneurial opportunity by focusing on actual versus theoretical opportunity and incorporating it as merely another factor to consider, among common-law factors, in whether the putative independent contractor is in fact rendering services as part of an independent business. This decision ran contrary to the District of Columbia Circuit’s holding in another case involving FedEx Home Delivery Drivers which stated that entrepreneurialism is an animating principle by which to evaluate all other common law factors.
In a recent NLRB decision, SuperShuttle DFW, Inc., earlier this year, the board overruled the prior NLRB decision in FedEx Home Delivery and returned to the traditional common law test previously used in board decisions. That test looks to the following common law factors:
(a) The extent of control which, by the agreement, the master may exercise over the details of the work.
(b) Whether or not the one employed is engaged in a distinct occupation or business
(c) 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.
(e) Whether the employer or the workman supplies the
instrumentalities, tools, and the place of work for the person doing the work
(f) The length of time for which the person is employed.
(g) The method of payment, whether by the time or by the job.
(h) Whether or not the work is part of the regular business of the employer.
(i) Whether or not the parties believe they are creating the relation of master and servant.
(j) Whether the principal is or is not in business.
Rather than treat entrepreneurial opportunity as an individual factor in that test, entrepreneurial opportunity is a “principle to help evaluate the overall significance of the agency factors.” However, the significance of those entrepreneurial opportunities depends on the facts of each case.
By renewing the importance of entrepreneurial opportunity, the SuperShuttle decision reflects an employer-friendly shift and allows for more leeway in classifying workers as independent contractors exempt from coverage under the NLRA.