Independent Contractors and the National Labor Relations Board

By: Robert W. Small

In a 2014 decision, FedEx Home Delivery, the National Labor Relations Board (the Board) ruled that a worker would be considered an independent contractor (that is, not an employee) for purposes of the National Labor Relations Act (the Act), only if the worker was “rendering services as part of an independent business.” This greatly expanded the reach of the Act and broadened the class of workers who could unionize and bring unfair labor practices claims. This narrow definition of independent contractor especially affected companies like Lyft and Uber.

On January 25th, in SuperShuttle DFW, Inc. (available online here) the Board expressly overruled FedEx and reinstated a multi-factored test for determining if a worker is an employee or independent contractor for purposes of the Act. No one factor is determinative; rather, all of the factors are weighed in reaching a determination. The factors are:
  1. The extent of control any agreement gives to the principal over the details of the work.
  2. Whether the worker engages in a distinct occupation or business.
  3. The occupation at issue relative to whether, in the locality in issue, such work usually is supervised by the principal or by a specialist without supervision.
  4. The skill required to perform the work.
  5. Who supplies the tools and place of work.
  6. The length of time necessary or for which the worker is engaged (the shorter the duration, the more likely the worker is an independent contractor).
  7. Whether the worker is paid hourly or by the job.
  8. Whether the work is part of the normal business of the principal.  
  9. What the parties call the relationship or believe it to be.
  10. Whether the principal is or is not in business. 
It is important to recognize that this test applies only to coverage of the National Labor Relations Act.  Other tests, including varying tests under state laws, apply when considering the applicability of the Fair Labor Standards Act, Internal Revenue Code (as it relates to withholding obligations), OSHA, and state wage payment laws. Those engaging “independent contractors” need to take all such laws into consideration.

If you have any questions, or would like additional information, please contact Bob Small, Partner in Reger Rizzo & Darnall’s Employment Practices Group,  at 215.495.6541, or via email at rsmall@regerlaw.com.

This newsletter is designed to keep you up-to-date with changes in the law. For help with these or any other legal issues, please contact Reger Rizzo & Darnall LLP.  The content of this newsletter is intended solely for your informational purposes. It does not constitute legal advice, and it should not be relied on without a discussion of your specific situation with an attorney.