The National Labor Relations Board announced Friday it overturned a board decision from 2014 on who qualifies as independent contractors. The decision came in a case involving a union effort to organize drivers at the Dallas affiliate of SuperShuttle — a firm that organizes vans that provide rides to and from airports.
In a 3-1 decision, the board found drivers for SuperShuttle DFW Inc. were independent contractors, not employees. The board in a press release said the decision released Friday “clarified the role entrepreneurial opportunity plays in its determination of independent contractor status as the DC Circuit has recognized.” The 2014 ruling — Fedex Home Delivery — severely limited the significance of a worker’s entrepreneurial opportunity for economic gain.
The board examined several factors when determining whether the SuperShuttle DFW drivers were independent contractors or employees, according to the decision.
However, the entrepreneurial opportunity factor proved a focus of the NLRB in Friday’s decision. It noted drivers — which the decision refers to as franchisees — own or lease their vans, decide when they want to drive, can turn down trips, decide how they will drive, pay a franchise fee and keep the fares they collect.
It noted these factors “provide franchisees with significant entrepreneurial opportunity and control over how much money they make each month.”
In the 2014 decision, the then-board watered down the significance of “entrepreneurial opportunity,” according to some measures [1]. That case involved Connecticut-based drivers for FedEx Home Delivery.
The SuperShuttle/driver relationship. SuperShuttle DFW had designated its drivers as employees prior to 2005. It then converted to a franchise model where drivers supplied their own van, a $30,000 expense, and signed a one-year independent contractor agreement. Vans had to meet specifications such as make, model, color, size and age. They must also have SuperShuttle’s blue-and-yellow paint scheme and logo. In addition, the drivers must purchase insurance through a designated insurer.
Drivers paid a $500 one-time fee and then a $575 weekly fee.
SuperShuttle also set rates and prohibited drivers from working for competitors. However, drivers could set their own schedules and were, generally, not fined for declining rides.
Board members comprising the majority vote were Chairman John Ring, Marvin Kaplan and William Emanuel.
The dissent. Board member Lauren McFerran wrote in her dissent the majority was wrong to overrule the 2014 decision and under any “reasonable interpretation” of the common-law test, the SuperShuttle DFW drivers are employees.
“SuperShuttle’s drivers are not independent in any meaningful way, and they have little meaningful ‘entrepreneurial opportunity,’” McFerran wrote. “Under well-established board law —reflected in decisions leading up to and including FedEx — this should be a straightforward case. Instead, purporting to ‘return the board’s independent-contractor test to its traditional common-law roots,’ the majority not only reaches the wrong result here, but also adopts a test that cannot be reconciled with either the common law or Supreme Court and board precedent.”
Separately, the NLRB is also involved in a rule-making [2] over the definition of joint-employer, which was re-defined during the Obama administration as well.