Pendulums and the NLRB
Employment lawyers have it figured out. With all the inconsistent decisions coming down from the NLRB, state and federal courts there is always plenty of work. One of my favorites for providing entertaining reading and job security for my employment lawyer friends is the National Labor Relations Board (“NLRB”).
The NLRB is an administrative agency charged with administering the National Labor Relations Act (“NLRA”) which covers employee’s right to participate in collective bargaining and prevent unfair labor practices.
The NLRB, like many federal boards/agencies, seems to move like a pendulum. I know that I am cynical (and narcissistic and have a bundle of other character flaws) but decisions tend to reflect the position of the current administration. The decisions will swing to the left and then begin to move back to the right as administrations change. This is good for lawyers as there will always be work but bad news for the folks subject to the rulings as there will not always be consistency.
For example, in its 2014 decision FedEX Home Delivery the pendulum swung to the left when the NLRB determined that a group of Connecticut drivers were employees – not independent contractors – and covered under the National Labor Relations Act (“NLRA”). In its decision the NLRB decided it would not follow the D.C. Court of Appeals 2009 decision that set forth the standards for evaluating whether a person is an employee under the NLRA. Instead it argued that the NLRB placed too much emphasis on entrepreneurial opportunity and added an additional factor limiting the consideration given this factor.
Of course, this created a bit of heartburn as the test that everyone had relied on for 18,000 years in determining independent contractor status had changed with actions brought before the NLRB. As a result, folks became confused … and lawyers made a bunch of money.
As you can imagine, since that decision the administration has changed and the pendulum has swung back to the right.
On January 25, 2019 in SuperShuttle DFW Inc., the NLRB returned to its age-old independent contractor standard and overruled the test set forth in its 2014 Fed Ex Home Delivery decision. In its decision, the NLRB stated the 2014 standard incorrectly minimized entrepreneurial opportunity as a factor in determining independent contractor status.
The SuperShuttle DFW Inc. case, involved shuttle-van drivers operating as franchisees of SuperShuttle at the Dallas-Fort Worth Airport. Under the franchise agreement the drivers paid SuperShuttle an initial franchise fee and a flat weekly fee to use the SuperShuttle brand and reservation system. In return, the drivers were free to work whatever schedule they desired, supplied their own shuttle vans and retained all the money they earned for completing the assignments.
The local Transit Union attempted to organize and represent the drivers and argued that the drivers were not independent contractors but were instead employees. The Union pointed to the factors from the 2014 FedEx case in support of their position.
The NLRB disagreed and concluded that the franchisees are not statutory employees under the National Labor Relations Act, but rather independent contractors excluded from the law’s coverage.
By overruling FedEx Home Delivery, the NLRB has returned to the traditional common-law agency test to determine whether an individual is an employee or independent contractor. The test includes ten factors for consideration which, because only lawyers would care, I am not going to list. If you really want to know shoot me an email.
For our industry the decision is important because carriers can often show entrepreneurial opportunity available to drivers. Some examples would include: (1) drivers ability to decide what days to work; (2) choice of loads to accept; (3) whether they own or lease their vehicle; (4) when they perform maintenance; and (5) drivers’ ability to decide the carriers with which they will work. This list is not exhaustive, just some things to consider.
Of course, The NLRB decisions do not impact the IRS Right to Control test for federal taxation purposes, various state law tests for wage and hour laws, or a variety other things. If you want to know how your employees are likely to be classified consult a good employment lawyer. They need the work.
J. Bradley Klepper, Esq. is President of Interstate Trucker Ltd., a law firm entirely dedicated to legal defense of the nation's commercial drivers. Interstate Trucker represents truck drivers throughout the forty-eight (48) states on both moving and non-moving violations. Brad is also Executive Vice President & General Counsel of Drivers Legal Plan, which allows member drivers access to his firm’s services at greatly discounted rates. Brad spent almost a decade with the largest law firm in Oklahoma where his practice included extensive experience in transactional law, business defense litigation, and intellectual property. In addition, Brad is a licensed architect and serves as General Counsel to the Oklahoma Board of Architects, Landscape Architects and Interior Designers.Brad has dedicated much of his time to DataQs challenges, which are challenges posed to the FMCSA for CSA incidents, to examine data and reports filed by law enforcement.
800-333-DRIVE (3748) or www.interstatetrucker.com