Wyatt Employment Law Report

NLRB Returns to Traditional Common-Law Test For Independent Contractors

By Michelle D. Wyrick

On January 25, 2019, in SuperShuttle DFW, Inc. and Amalgamated Transit Union Local 1338, Case 16–RC–010963, the National Labor Relations Board (“NLRB”) overruled its prior decision in FedEx Home Delivery, 361 NLRB 610 (2014), and returned to the common-law test that it previously used to determine whether workers were employees or independent contractors.  The NLRB’s decision clarifies the role that “entrepreneurial opportunity” plays in deciding whether workers are employees or independent contractors.  The significance is that employees can unionize under the National Labor Relations Act (“NLRA”).  Independent contractors cannot.


The NLRB criticized the FedEx decision because it “significantly limited the importance of entrepreneurial opportunity.”  In SuperShuttle, the NLRB considered whether franchisees who operated shared-ride vans for SuperShuttle Dallas-Fort Worth were employees covered under the NLRA or independent contractors.  The franchisees were required to purchase or lease their own vans (that met franchise specifications), and they paid SuperShuttle Dallas-Fort Worth a franchise fee and a flat weekly fee for the right to use the SuperShuttle brand and its reservation apparatus.  Franchisees paid for their own gas and van maintenance.  The franchisees were not Continue reading

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Eleventh Circuit Reverses NLRB & Finds Stagehands Are Independent Contractors

By Michael D. Hornback

Like me, I am sure some of you have attended an over-the-top concert and thought “Who puts up these stages and all of these lights?”  More importantly, who are the poor souls that are relegated to taking all of this stuff down after the concert is over (which must feel like that never ending drive back to reality after a vacation at the beach)?  Have you ever been to a concert and thought, “Hey, are these stagehands employees or independent contractors?”  Yeah, me neither.  However, that was the precise question before the Eleventh Circuit Court of Appeals in the case of Crew One Productions, Inc. v. National Labor Relations Board, Case No. 15-10429.  I’ll save you the suspense, Continue reading

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NLRB Finds FedEx Drivers to be Employees–Not Independent Contractors

By Edwin S. Hopson

In FedEx Home Delivery, 361 NLRB No. 55 (2014) decided September 30, 2013, the National Labor Relations Board found certain FedEx drivers based in Hartford, Connecticut to be employees of FedEx Home Delivery. The National Labor Relations Act covers “employees” as defined in the NLRA, but does not offer protection to “independent contractors.”

In analyzing the factors as to who are employees and who are independent contractors, the NLRB relied upon the Restatement (Second) of Agency § 220 (1958), as mandated by a number of Supreme Court decisions.

Previously, the U.S. Court of Appeals for the District of Columbia had on similar facts held that the FedEx employees in the case before them were independent contractors and therefore could not unionize under the protections and rights of the NLRA. However, the Board in FedEx Home Delivery, refused to follow that decision, and noted that the U.S. Court of Appeals for the Ninth Circuit had reached an opposite conclusion in a FedEx case.

The FedEx Home Delivery Board majority followed Roadway Package System, 326 NLRB 842 (1998) (Roadway III), which had rejected as the predominant factor the “right to control” test, i.e., did the person in question control the manner and means of performing the work. It concluded that “the great majority of the traditional common-law factors, as incorporated in the Restatement (Second) of Agency, point toward employee status” for the drivers in question, namely that:

-FedEx exercised control over the drivers’ work;

-the drivers were not engaged in a distinct business;

-the work of the drivers was done under FedEx’s direction;

-the drivers were not required to have special skills;

-drivers had a permanent working relationship with FedEx;

-FedEx established, regulated, and controeds the rate of drivers’ compensation and financial assistance to them;

-the work of the drivers was part of the regular business of FedEx; and

-FedEx was in the same business as the drivers.

The Board also noted that “[t]wo of the traditional factors—who supplies the instrumentalities of work, and whether the parties believed they have created an independent-contractor relationship—we view as inconclusive, but they would in any case not outweigh the remaining factors.” However, the Board did find that what the driver was selling was created by FedEx, and remained under FedEx’s control, as did the configuration of the route, the route volume, the customer base, recruitment and pricing.

The three Democrat Members signed onto the decision, while one Republican Member dissented; the other Republican Member recused himself from the case.


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Employee or Independent Contractor?

by Debra H. Dawahare

The Kentucky Court of Appeals has recently upheld the Kentucky Worker’s Compensation Board’s decision to overturn an Administrative Law Judge’s opinion that a roofer was an independent contractor rather than an employee.  In Terry Steinrock and Glenn Coke d/b/a Glenn Coke General Contracting v. Howard C. Cook, et al, Claimant Howard Cook engaged in roofing work for T. W. Steinrock Roofing, a subcontractor of Glenn Coke General Contracting.  Cook, who also did restaurant and printing jobs and worked in warehouses, had taken up roofing to make ends meet.  He filed a workers compensation claim following an injury while working for Steinrock.  Steinrock and Coke protested that he was an independent contractor, and the ALJ agreed.  However, the Worker’s Compensation Board thought otherwise. 

Both the Board, and the Kentucky Court of Appeals in affirming the Board, looked to Ratliff v. Redmon, 396 S.W.2d 320 (Ky. 1965) to review the nine factors for determining whether an individual is an employee or an independent contractor:

These factors are: (1) The extent of control that the alleged employer may exercise over the details of the work; (2) Whether the worker is engaged in a distinct occupation or business; (3) Whether that type of work is usually done in the locality under the supervision of an employer or by a specialist, without supervision; (4) The degree of skill the work requires;  (5) Whether the worker or the alleged employer supplies the instrumentalities, tools and place of work; (6) The length of the employment; (7) The method of payment, whether by the time or the job; (8) Whether the work is part of the regular business of the alleged employer; and (9) The intent of the parties.

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Look For Increase in Audits For Independent Contractors

By Kim Koratsky

The employee/independent contractor question is often a thorny issue for employers, but in the next year, it could be an even bigger problem.  According to an article in Crain’s Cleveland Business, “[o]ver the past two years, the Wage and Hour Division of the U.S. Department of Labor has hired more than 350 investigators to uncover employment violations, including misclassification, and President Obama has requested $25 million in the fiscal 2011 budget to target the issue further.”  In addition to the government crackdown, class action lawsuits brought against employers accused of misclassifying employees have increased significantly in recent years.

It is much easier to solve these problems with an internal audit than to wait for an official audit by the Department of Labor (DOL).  DOL audits can be devastating to a small business.  The DOL audit process, and appeals if pursued, are long and expensive, even if companies end up not owing back pay, penalties and interest.  While the DOL seems to be looking at all businesses, sectors that are drawing particular scrutiny include trucking, construction, manufacturing, information technology, and home health care. 

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Congress May Close Independent Contractor/Employee Loophole

By LaToi Mayo

The Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (H.R. 3408), a bill seeking to remove a loophole allowing employers to bypass the Internal Revenue Service’s test of whether a worker is an employee or an independent contractor, was reintroduced in the House on July 30, 2009, by Representative Jim McDermott (D-WASH).  The bill will make it more difficult for employers to avoid employment tax liability if they have misclassified a worker as an independent contractor and, more importantly, significantly increase employer penalties in the event of misclassification.

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