NLRB Returns to Long-Standing Independent-Contractor Standard

On Friday, January 25, 2019, the National Labor Relations Board (“NLRB”) issued an opinion in SuperShuttle DFW, Inc., Case 16-RC-010963 that re-institutes the common law test and standards for assessing whether a worker should be classified as an independent contractor versus an employee. Specifically, the NLRB emphasized the role that “entrepreneurial opportunity” plays in such an analysis.

In SuperShuttle, a local union sought representation over approximately 88 drivers who operated as “driver franchisees” at the Dallas-Fort Worth Airport. Because the Board determined that these workers were independent contractors, the union could not bargain collectively for the drivers’ benefit. Factors significant to the Board’s decision included: franchisee drivers leased or owned their own work vans; the drivers were paid by their customers’ fares (none of which was shared with SuperShuttle), and the drivers exercised nearly unfettered control over their daily work schedules and working conditions. Other factors considered were the absence of driver supervision and the parties’ understanding and belief that the drivers were independent contractors.

According to the Board, “entrepreneurial opportunity” has always been at the core of any common-law test used to classify workers as either employees or independent contractors. The conditions of the work paradigm presented in SuperShuttle overlaying the drivers’ entrepreneurial opportunity for economic gain was sufficient enough to support their designation as independent contractors.

Significantly, the SuperShuttle decision overrules FedEx Home Delivery, a 2014 NLRB decision that previously modified the independent contractor test by emphasizing that the financial interdependence of an “independent contractor” on an “employer” suggests a master-servant relationship, which is a hallmark of a true employment relationship.

According to the U.S. Labor Department, it is estimated that there were 10.6 million workers identified as independent contractors in 2017. This figure accounts for nearly 7% of the American workforce. If your organization utilizes contract labor and would like a review of how the NLRB’s decision in SuperShuttle DFW, Inc. might influence your employee classifications, please do not hesitate to contact any of the members in Barrett McNagny’s employment law section.