In FedEx Home Delivery, 361 NLRB No. 55 (2014) decided September 30, 2013, the National Labor Relations Board found certain FedEx drivers based in Hartford, Connecticut to be employees of FedEx Home Delivery. The National Labor Relations Act covers “employees” as defined in the NLRA, but does not offer protection to “independent contractors.”

In analyzing the factors as to who are employees and who are independent contractors, the NLRB relied upon the Restatement (Second) of Agency § 220 (1958), as mandated by a number of Supreme Court decisions.

Previously, the U.S. Court of Appeals for the District of Columbia had on similar facts held that the FedEx employees in the case before them were independent contractors and therefore could not unionize under the protections and rights of the NLRA. However, the Board in FedEx Home Delivery, refused to follow that decision, and noted that the U.S. Court of Appeals for the Ninth Circuit had reached an opposite conclusion in a FedEx case.

The FedEx Home Delivery Board majority followed Roadway Package System, 326 NLRB 842 (1998) (Roadway III), which had rejected as the predominant factor the “right to control” test, i.e., did the person in question control the manner and means of performing the work. It concluded that “the great majority of the traditional common-law factors, as incorporated in the Restatement (Second) of Agency, point toward employee status” for the drivers in question, namely that:

-FedEx exercised control over the drivers’ work;

-the drivers were not engaged in a distinct business;

-the work of the drivers was done under FedEx’s direction;

-the drivers were not required to have special skills;

-drivers had a permanent working relationship with FedEx;

-FedEx established, regulated, and controeds the rate of drivers’ compensation and financial assistance to them;

-the work of the drivers was part of the regular business of FedEx; and

-FedEx was in the same business as the drivers.

The Board also noted that “[t]wo of the traditional factors—who supplies the instrumentalities of work, and whether the parties believed they have created an independent-contractor relationship—we view as inconclusive, but they would in any case not outweigh the remaining factors.” However, the Board did find that what the driver was selling was created by FedEx, and remained under FedEx’s control, as did the configuration of the route, the route volume, the customer base, recruitment and pricing.

The three Democrat Members signed onto the decision, while one Republican Member dissented; the other Republican Member recused himself from the case.