NLRB Changes Independent Contractor Test (Again). Ch-Ch-Ch-Changes!

changes independent contractor test super shuttle nlrbThe word of the day is change. Not the kind I needed Saturday morning when it required 37 quarters to drive 50 miles on the Florida Turnpike. (Thank you Walgreens, for the roll of quarters!) No, I mean the David Bowie kind. Turn and face the strange.

On Friday, the Trump-appointed, Republican-majority NLRB issued an important pro-business decision, changing the test for Independent Contractor vs. Employee under the National Labor Relations Act (NLRA). The case is called SuperShuttle DFW and involves independent contractor airport shuttle drivers in the Dallas-Fort Worth area.

The new test is the old test. Or as Roger Daltrey might say, “Meet the new boss. Same as the old boss.

The new test is the traditional common law Right to Control Test, which had been the test until 2014. In 2014, a Dem-led Board made it harder to prove independent contractor status by changing the test in a case called FedEx Home Delivery. The FedEx test asked whether the worker was “in fact, rendering services as part of an independent business” and essentially adopted an Economic Realities Test, rather than the Right to Control Test that had always been applied.

Friday’s decision brings back the old test — a traditional Right to Control Test.

A Right to Control Test asks who has the right to control the manner and means by which the work is completed. More control by the hiring party tilts toward a finding of employment. Less control means more entrepreneurial opportunity for the worker, which tilts toward a finding of independent contractor.

The Right to Control Test re-adopted in the Super Shuttle decision is a balancing test, and here are the factors the NLRB will consider:

(a) The extent of control which, by the agreement, the master may exercise over the details of the work.

(b) Whether or not the one employed is engaged in a distinct occupation or business.

(c) The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision.

(d) The skill required in the particular occupation.

(e) Whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work.

(f) The length of time for which the person is employed.

(g) The method of payment, whether by the time or by the job.

(h) Whether or not the work is part of the regular business of the employer.

(i) Whether or not the parties believe they are creating the relation of master and servant.

(j) Whether the principal is or is not in business.

In this case, the Amalgamated Transit Union was trying to organize 88 shuttle drivers, each of whom owned their vehicles and paid a flat fee for the right to transport passengers to and from the airport. Drivers kept the money they received for each fare, providing them with the opportunity for profit or loss, depending on how much they chose to work and which rides they chose to accept. Drivers could work when they wanted and could accept or decline rides.

The union argued that the drivers were subject to extensive rules about how they operated, including what they wore, the communication system they used, background check and training requirements, and the appearance and seating arrangements in their vehicles. These requirements, however, were not imposed by the franchisor, which then contracted with the individual drivers. Rather, these requirements were imposed by the state-run DFW Airport.

The Board recognized the important principle that requiring compliance with state- or customer-issued requirements is not the kind of control examined in a Right to Control analysis. Although the DFW Airport’s requirements were extensive, the franchisor’s insistence that its independent contractor drivers follow those rules did not turn the drivers into the franchisor’s employees. That’s an important point for businesses to remember when they enter into independent contractor arrangements.

So where does that leave us? A million dead end streets and every time I thought I’d got it made, it seemed the taste was not so sweet.

The test keeps changing, depending on which political party controls the Board. For now, we’re back to a common law Right to Control Test when determining Independent Contractor vs. Employee under the NLRA.

Ch-ch-ch-ch-changes.

For more information on joint employment, gig economy issues, and other labor and employment developments to watch in 2019, join me in Philadelphia on Feb. 26 or Chicago on Mar. 21 for the 2019 BakerHostetler Master Class on Labor Relations and Employment Law: Meeting Today’s Challenges. Advance registration is required. Please email me if you plan to attend, tlebowitz@bakerlaw.com. If you list my name in your RSVP, I will have your registration fee waived.

© 2019 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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