On June 13, the National Labor Relations Board (NLRB) issued its decision in The Atlanta Opera, a case in which the majority reversed a Trump-era standard for determining whether an individual is an independent contractor rather than an employee.
The Trump-era standard came in a 2019 case known as SuperShuttle, which placed an appropriate emphasis on “significant entrepreneurial opportunity for gain or loss” when evaluating potential independent contractor relationships. The SuperShuttle case reversed a standard that had been articulated in the Board’s 2014 Fed Ex IIdecision. In a confusing back and forth, the Atlanta Opera decision reinstates the FedEx II standard.
The issue of determining whether one is an independent contractor has been a contentious issue in the world of labor policy because the National Labor Relations Act does not cover independent contractors, and, therefore, they generally cannot unionize. With the so-called gig economy growing in recent years, more individuals have chosen to work using online platforms that enable customers to procure their services. As with the Obama-era majority in 2014, the current majority wants to make it more challenging to classify individuals as independent contractors, which could lead to more organizing efforts at such online businesses and others that utilize individuals’ services as independent workers.
The first attempt to impose a restrictive independent contractor standard dates back to 2006, when a union filed two petitions with the NLRB seeking representation elections covering FedEx drivers at facilities in Wilmington, MA. An NLRB Regional Director (RD) issued a Decision and Direction of Election, and the union won. The Board then rejected FedEx’s request for a review of the RD’s decision, which prompted the company to appeal to the U.S. Court of Appeals for the District of Columbia Circuit.
In 2009, the D.C. Circuit ruled against the Board. In its decision, the court pointed to a 2002 case saying that since then, both the court and the Board had shifted the emphasis to “whether the ‘putative independent contractors have significant entrepreneurial opportunity for gain or loss.’” Not long after the ruling against it, however, the NLRB took another bite at the apple after sustaining another union election at a different FedEx facility.
In 2014, the Board issued its decision in what came to be known as FedEx II in which it purported to “restate and refine the Board’s approach” in evaluating the independent contractor question and expressly rejected the D.C. Circuit’s views as it ruled against the company. That move prompted another appeal to the D.C. Circuit. When it took up that case in 2017, the D.C. Circuit slammed the NLRB, saying, “It is as clear as clear can be that ‘the same issue presented in a later case in the same court should lead to the same result’…. Doubly so when the parties are the same.”
Notwithstanding that decision, however, The Atlanta Opera explicitly cites the NLRB’s FedEx II standard. The employer in the case will have to evaluate its legal options, including whether to appeal, but if it does, the D.C. Circuit may have another opportunity to weigh in on the NLRB’s dubious reliance on FedEx II. If so, hopefully, the court will tell the NLRB to “return to sender.”
About the authors
Sean P. Redmond
Sean P. Redmond is Vice President, Labor Policy at the U.S. Chamber of Commerce.
