NLRB drops Obama-era independent contractor test

Dive Brief:

The National Labor Relations Board (NLRB) reversed course on the method by which it determines whether a worker is an independent contractor, it announced in a 3-1 ruling Friday.
In the ruling, titled SuperShuttle DFW, Inc., NLRB effectively overturned its 2014 decision in FedEx Home Delivery, holding that members of a group of franchisee shared-ride van drivers are independent contractors. The majority opinion held the franchisees had "significant entrepreneurial opportunity" in their arrangement with SuperShuttle and that they did not share any earned ride fairs with SuperShuttle, two factors that weighed heavily in its decision to confer independent contractor status.
The board said its FedEx Home Delivery decision, which changed the process by which NLRB determined independent contractor status, "severely limit[ed] the significance of a worker's entrepreneurial opportunity for economic gain."

Dive Insight:

The SuperShuttle decision deals with an area — employment status for the purpose of National Labor Relations Act (NLRA) protection — that has been of particular interest to NLRB since the board's shift back to a Republican majority.

With its 2014 decision in FedEx Home Delivery ruling, NLRB, then a Democratic-held majority during the Obama administration, stated "the Board should give weight to actual, but not merely theoretical, entrepreneurial opportunity." This was in reference to a decision by the U.S. Court of Appeals for the District of Columbia that called the consideration of entrepreneurial opportunity as an "animating principle" of NLRB's determination of independent-contractor status.

The overturning of that 2014 ruling means FedEx Home Delivery is just the latest of several Obama-era standards reconsidered by NLRB in its effort to overturn what some employment law observers have described as "extreme" policy shifts made under the previous administration. The board has also sought to roll back rulemaking for determining joint-employer status. The comment period for a new NLRB rule that would negate the Obama-era board's decision in Browning-Ferris ends today, Jan. 28, with the deadline for comments made in reply to other public comments set for Feb. 11.

Lauren McFerran, the lone Democrat appointee on the current NLRB, dissented in the SuperShuttle ruling, saying the pre-2014 independent contractor determination test "cannot be reconciled with either the common law or Supreme Court and Board precedent." On Twitter, McFerran said the new standard set by the board "ignores the common law, the goals of the NLRA, and the realities of the workplace to remove workers from labor law protections."