United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 7, 2008 Decided April 21, 2009
No. 07-1391
FEDEX HOME DELIVERY, A SEPARATE OPERATING DIVISION
OF FEDEX GROUND PACKAGE SYSTEM, INCORPORATED,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL NO.
25,
INTERVENOR
Consolidated with 07-1436
On Petition for Review and Cross-Application for
Enforcement of an Order of the National Labor
Relations Board
R. Ted Cruz argued the cause for petitioner. On the briefs
were Charles I. Cohen, Jonathan C. Fritts, and Doreen S.
Davis.
2
Robert Digges Jr., Robin S. Conrad, and Adam C. Sloane
were on the brief for amici curiae American Trucking
Associations, Inc. and Chamber of Commerce of the United
States of America in support of petitioner. Timothy W.
Wiseman entered an appearance.
Kellie J. Isbell, Attorney, National Labor Relations
Board, argued the cause for respondent. With her on the brief
were Ronald E. Meisburg, General Counsel, John H.
Ferguson, Associate General Counsel, Linda Dreeben,
Deputy Associate General Counsel, and Robert J. Englehart,
Supervisory Attorney. Julie B. Broido, Supervisory Attorney,
entered an appearance.
Renee J. Bushey argued the cause for intervenor
International Brotherhood of Teamsters, Local No. 25. With
her on the brief were Michael A. Feinberg and Jonathan M.
Conti.
Daniel J. Popeo and Richard A. Samp were on the brief
for amici curiae Washington Legal Foundation, et al. in
support of respondent.
Before: GARLAND and BROWN, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge BROWN.
Opinion dissenting in part filed by Circuit Judge
GARLAND.
BROWN, Circuit Judge: FedEx Ground Package System,
Inc. (“FedEx”), a company that provides small package
delivery throughout the country, seeks review of the
determination of the National Labor Relations Board
3
(“Board”) that FedEx committed an unfair labor practice by
refusing to bargain with the union certified as the collective
bargaining representative of its Wilmington, Massachusetts
drivers. The Board cross-applies for enforcement of its order.
Because the drivers are independent contractors and not
employees, we grant FedEx’s petition, vacate the order, and
deny the cross-application for enforcement
I.
In 1998, FedEx acquired Roadway Package Systems and
changed its name to FedEx Ground Package System, Inc. The
company has two operating divisions: the Ground Division
and the Home Delivery Division or FedEx Home. The
Ground Division delivers packages of up to 150 pounds,
principally to and from business customers. FedEx Home
delivers packages of up to 75 pounds, mostly to residential
customers. The Wilmington terminals are part of FedEx
Home, a network that operates 300 stand-alone terminals
throughout the United States and shares space in an additional
200 Ground Division facilities. FedEx Home has independent
contractor agreements with about 4,000 contractors
nationwide with responsibility for over 5,000 routes.
In July 2006, the International Brotherhood of Teamsters,
Local Union 25, filed two petitions with the NLRB seeking
representation elections at the Jewel Drive and Ballardvale
Street terminals in Wilmington, neither of which boasts many
contractors. The Union won the elections, prevailing by a
vote of 14 to 6 at Jewel Drive and 10 to 2 at Ballardvale
Street, and was certified as the collective bargaining
representative at both. FedEx refused to bargain with the
Union. The company did not contest the vote count; instead,
FedEx disputed the preliminary finding that its single-route
drivers are “employees” within the meaning of Section 2(3) of
the National Labor Relations Act, 29 U.S.C. § 152(3).
4
The Board rejected FedEx’s Request for Review of the
Regional Director’s Decision and Direction of Election on
November 8, 2006. In dissent, Chairman Battista disagreed
with “the refusal to permit [FedEx] to introduce system-wide
evidence concerning the number of route sales and the
amount of profit,” as the information would be relevant to the
determination of the drivers’ “entrepreneurial interest in their
position.” FedEx Home Delivery and Local 25, N.L.R.B.
Case Nos. 1-RC-22034, 22035, (Nov. 8, 2006) (Battista, C.,
dissenting). After the election, the Board found FedEx
violated Sections 8(a)(1) and (5) of the National Labor
Relations Act, 29 U.S.C. §§ 158(a)(1) and (5), by refusing to
bargain. Finding FedEx’s objection that its contractors are
not employees had been raised and rejected in the
representation proceedings, the Board issued its order on
September 28, 2007. FedEx filed a timely petition for review
and the Board filed its cross-application for enforcement. The
Union intervened in support of the Board’s cross-application.
II.
To determine whether a worker should be classified as an
employee or an independent contractor, the Board and this
court apply the common-law agency test, a requirement that
reflects clear congressional will. See NLRB v. United Ins.
Co., 390 U.S. 254, 256 (1968); see also St. Joseph News
Press, 345 N.L.R.B. 474, 478 (2005) (“Supreme Court
precedent ‘teaches us not only that the common law of agency
is the standard to measure employee status but also that we
have no authority to change it.’”) (quoting Dial-A-Mattress
Operating Corp., 326 N.L.R.B. 884, 894 (1998)). While this
seems simple enough, the Restatement’s non-exhaustive ten-
factor test is not especially amenable to any sort of bright-line
5
rule,1 a long-recognized rub.2 Thus, “there is no shorthand
formula or magic phrase that can be applied to find the
answer, but all of the incidents of the relationship must be
assessed and weighed with no one factor being decisive,”
United Ins. Co., 390 U.S. at 258, always bearing in mind the
“legal distinction between ‘employees’ . . . and ‘independent
contractors’ . . . is permeated at the fringes by conclusions
drawn from the factual setting of the particular industrial
dispute.” North Am. Van Lines, Inc. v. NLRB, 869 F.2d 596,
599 (D.C. Cir. 1989) (“NAVL”).
This potential uncertainty is particularly problematic
because the line between worker and independent contractor
is jurisdictional—the Board has no authority whatsoever over
independent contractors. See id. at 598. Consequently, it is
“one of this court’s principal functions” to “ensur[e] that the
Board exercises power only within the channels intended by
Congress,” especially as determining status from undisputed
1
The common law factors include, inter alia, “the extent of control
which, by the agreement, the master may exercise over the details
of the work”; “the kind of occupation”; whether the worker
“supplies the instrumentalities, tools, and the place of work”; “the
method of payment, whether by the time or by the job”; “the length
of time for which the person is employed”; whether “the work is a
part of the regular business of the employer”; and the intent of the
parties. RESTATEMENT (SECOND) OF AGENCY § 220(2).
2
See Kisner v. Jackson, 159 Miss. 424, 427–28 (1931) (“There
have been many attempts to define precisely what is meant by the
term ‘independent contractor’; but the variations in the wording of
these attempts have resulted only in establishing the proposition
that it is not possible within the limitations of language to lay down
a concise definition that will furnish any universal formula,
covering all cases. At last, and in any given case, it gets back to the
original proposition whether in fact the contractor was actually
independent.”).
6
facts “involves no special administrative expertise that a court
does not possess.” Id. We thus do not grant great or even
“normal[]” deference to the Board’s status determinations;
instead, we will only uphold the Board if at least “it can be
said to have ‘made a choice between two fairly conflicting
views.’” C.C. Eastern, Inc. v. NLRB, 60 F.3d 855, 858 (D.C.
Cir. 1995) (quoting NAVL, 869 F.2d at 599).
For a time, when applying this common law test, we
spoke in terms of an employer’s right to exercise control,
making the extent of actual supervision of the means and
manner of the worker’s performance a key consideration in
the totality of the circumstances assessment. Though all the
common law factors were considered, the meta-question, as it
were, focused on the sorts of controls employers could use
without transforming a contractor into an employee. E.g.,
NAVL, 869 F.2d at 599 (“In applying traditional agency law
principles, the NLRB and the courts have adopted a right-to-
control test. The test requires an evaluation of all the
circumstances, but the extent of the actual supervision
exercised . . . is the most important element.”). For example,
“efforts to monitor, evaluate, and improve” a worker’s
performance were deemed compatible with independent
contractor status. Id. Nor would “restrictions” resulting from
“government regulation” mandate a contrary conclusion. Id.
“[E]vidence of unequal bargaining power” also did not
establish “control.” Id.
Gradually, however, a verbal formulation emerged that
sought to identify the essential quantum of independence that
separates a contractor from an employee, a process reflected
in cases like C.C. Eastern and NAVL where we used words
like control but struggled to articulate exactly what we meant
by them. “Control,” for instance, did not mean all kinds of
controls, but only certain kinds. See, e.g., C.C. Eastern, 60
7
F.3d at 858 (quoting NAVL, 869 F.2d at 599). Even though
we were sufficiently confident in our judgment that we
reversed the Board, long portions of both opinions were
dedicated to explaining why some controls were more equal
than others. See id. at 858–61; NAVL, 869 F.2d at 599–604.
In other words, “control” was close to what we were trying to
capture, but it wasn’t a perfect concurrence. It was as if the
sheet music just didn’t quite match the tune.
In any event, the process that seems implicit in those
cases became explicit—indeed, as explicit as words can be—
in Corporate Express Delivery Systems v. NLRB, 292 F.3d
777 (D.C. Cir. 2002). In that case, both this court and the
Board, while retaining all of the common law factors,
“shift[ed the] emphasis” away from the unwieldy control
inquiry in favor of a more accurate proxy: whether the
“putative independent contractors have ‘significant
entrepreneurial opportunity for gain or loss.’” Id. at 780
(quoting Corp. Express Delivery Sys., 332 N.L.R.B. No. 144,
at 6 (Dec. 19, 2000)). This subtle refinement was done at the
Board’s urging in light of a comment to the Restatement that
explains a “‘full-time cook is regarded as a servant,’”—and
not “an independent contractor”—“‘although it is understood
that the employer will exercise no control over the cooking.’”
Id. (quoting RESTATEMENT (SECOND) OF AGENCY § 220(1)
cmt. d). Thus, while all the considerations at common law
remain in play, an important animating principle by which to
evaluate those factors in cases where some factors cut one
way and some the other is whether the position presents the
opportunities and risks inherent in entrepreneurialism. Id.3
3
The common law test, after all, is not merely quantitative. We do
not just count the factors that favor one camp, and those the other,
and declare that whichever side scores the most points wins.
Instead, there also is a qualitative assessment to evaluate which
factors are determinative in a particular case, and why. In
8
Although using this “emphasis” does not make applying
the test purely mechanical, the line drawing is easier, or at
least this court and the Board in Corporate Express seem to
have so hoped. See id. (“We agree with the Board’s
suggestion that [entrepreneurial opportunity] better captures
the distinction between an employee and an independent
contractor.”). In C.C. Eastern, for instance, we decided
drivers for a cartage company who owned their own tractors,
signed an independent contractor agreement, “retain[ed] the
rights, as independent entrepreneurs, to hire their own
employees” and could “use their tractors during non-business
hours,” and who were “paid by the job” and received no
employee benefits, should be characterized as independent
contractors. 60 F.3d at 858–59. We also noted the company
did not require “specific work hours” or dress codes, nor did it
subject workers to conventional employee discipline. Id. at
858. Conversely, in Corporate Express, emphasizing
entrepreneurialism, we straightforwardly concluded that
where the owner-operators “were not permitted to employ
others to do the Company’s work or to use their own vehicles
for other jobs,” they “lacked all entrepreneurial opportunity
and consequently functioned as employees rather than as
independent contractors.” 292 F.3d at 780–81.
This struggle to capture and articulate what is meant by
abstractions like “independence” and “control” also seems to
play a part in the Board’s own cases, though we readily
concede the Board’s language has not been as unambiguous
as this court’s binding statement in Corporate Express. For
Corporate Express, we said this qualitative evaluation “focus[es]
not upon the employer’s control of the means and manner of the
work but instead upon whether the putative independent contractors
have a ‘significant entrepreneurial opportunity for gain or loss.’”
292 F.3d at 780 (quoting Corp. Express, 332 N.L.R.B. at 6).
9
instance, in the latest but far from only statement of the
principle, see St. Joseph News Press, 345 N.L.R.B. at 479;
Dial-A-Mattress Operating Corp., 326 N.L.R.B. at 891; cf.
Panhandle E. Pipe Line Co. v. FERC, 890 F.2d 435, 438–39
(D.C. Cir. 1989) (agency action while review is pending in
this court can be relevant), and a case where the Board
explicitly said it was simply following its own precedent,
Arizona Republic, 349 N.L.R.B. 1040, 1040 (2007), the Board
held that where carriers sign an independent contractor
agreement; own, maintain, and control their own vehicles;
hire full-time substitutes and control the substitutes’ terms and
conditions of employment; are permitted to hold contracts on
multiple routes; select the delivery sequence; and are not
subject to the employer’s progressive discipline system, the
evidence establishes that the carriers are independent
contractors, id. at 1040–41, 1046. Importantly, the Board,
noting many drivers had “multiple routes” and could deliver
newspapers for another publisher, also concluded significant
entrepreneurial opportunity existed, even if most failed to
make the extra effort. “[T]he fact that many carriers choose
not to take advantage of this opportunity to increase their
income does not mean that they do not have the
entrepreneurial potential to do so.” Id. at 1045.
The record here shares many of the same characteristics
of entrepreneurial potential.4 In the underlying representation
decision, the Regional Director found the contractors sign a
4
FedEx also does not provide benefits or withhold taxes. While
unrelated to entrepreneurialism, this goes to party intent. See C.C.
Eastern, 60 F.3d at 858–59; St. Joseph News Press, 345 N.L.R.B. at
479.(“[A] party’s intent with regard to the nature of the relationship
created weighs strongly in favor of finding independent contractor
status.”). Because we consider all the common law factors, vide
supra, these facts are relevant, just as are any relating to control.
10
Standard Contractor Operating Agreement that specifies the
contractor is not an employee of FedEx “for any purpose” and
confirms the “manner and means of reaching mutual business
objectives” is within the contractor’s discretion, and FedEx
“may not prescribe hours of work, whether or when the
contractors take breaks, what routes they follow, or other
details of performance”; “contractors are not subject to
reprimands or other discipline”; contractors must provide
their own vehicles, although the vehicles must be compliant
with government regulations and other safety requirements;
and “contractors are responsible for all the costs associated
with operating and maintaining their vehicles.” FedEx Home
Delivery and Local 25, N.L.R.B. Case Nos. 1-RC-22034,
22035, slip op. at 10–14 (First Region, Sept. 20, 2006)
(“Representation Decision”). They may use the vehicles “for
other commercial or personal purposes . . . so long as they
remove or mask all FedEx Home logos and markings,” and,
even on this limited record, some do use them for personal
uses like moving family members, and in the past “Alan
Douglas[] used his FedEx truck for his ‘Douglas Delivery’
delivery service, in which he delivered items such as lawn
mowers for a repair company.” Id. at 14, 15. Contractors can
independently incorporate, and at least two in Wilmington
have done so. At least one contractor has negotiated with
FedEx for higher fees. Id. at 20.5
5
We recognize FedEx seeks to “make full use of the Contractor’s
equipment,” but it is undisputed the contractors are only obligated
to provide service five days a week. Our precedent speaks to this:
“Moreover, as the drivers work only 40 to 50 hours per week for
the Company, it seems that their schedules do not preclude them
from taking on additional hauling business during their off-hours.”
C.C. Eastern, 60 F.3d at 860. Though our colleague contends C.C.
Eastern does not say very much, see Dis. Op. at 26 (“But all C.C.
Eastern held was that under those circumstances, the Board had
erred in ‘discounting to zero’ the significance of that single factor
11
Tellingly, contractors may contract to serve multiple
routes or hire their own employees for their single routes;
more than twenty-five percent of contractors have hired their
own employees at some point. See Resp’ts Br. at 6. “The
multiple route contractors have sole authority to hire and
dismiss their drivers”; they are responsible for the “drivers’
wages” and “all expenses associated with hiring drivers, such
as the cost of training, physical exams, drug screening,
employment taxes, and work accident insurance.”
Representation Decision, slip op. at 27.6 The drivers’ pay and
benefits, as well as responsibility for fuel costs and the like,
are negotiated “between the contractors and their drivers.” Id.
In addition, “both multiple and single route contractors may
hire drivers” as “temporary” replacements on their own
routes; though they can use FedEx’s “Time Off Program” to
find replacement drivers when they are ill or away, they need
not use this program, and not all do. Id. at 28–29. Thus,
contrary to the dissent’s depiction, Dis. Op. at 19, contractors
in the traditional multi-factor test.”), he fails to account for the
holding. We did not remand for the Board to give this factor the
proper weight, but instead held the contractors “are not ‘employees’
within the meaning of the Act and therefore are not within the
jurisdiction of the Board.” C.C. Eastern, 60 F.3d at 861.
6
We are aware the Regional Director excluded contractors with
multiple routes from the bargaining units as statutory supervisors,
even though the “employees” of those “supervisors” do not, in fact,
work for FedEx. Representation Decision, slip op. at 42–43. This
classification is not before us. But what is before us is the puzzling
argument, adopted but not defended by our colleague, see Dis. Op.
at 23, that because they were excluded, everything about them is
somehow irrelevant, as if—poof!—they just vanished. Multi-route
contractors signed the same contract as the others, and just as the
national data is relevant in assessing the rights available under the
contract, id. at 27–30, so are the activities of these contractors.
12
do not need to show up at work every day (or ever, for that
matter); instead, at their discretion, they can take a day, a
week, a month, or more off, so long as they hire another to be
there. “FedEx [also] is not involved in a contractor’s decision
to hire or terminate a substitute driver, and contractors do not
even have to tell FedEx [] they have hired a replacement
driver, as long as the driver is ‘qualified.’” Representation
Decision, slip op. at 29. “Contractors may also choose to hire
helpers” without notifying FedEx at all; at least six
contractors in Wilmington have done so. Id. at 29–30. This
ability to hire “others to do the Company’s work” is no small
thing in evaluating “entrepreneurial opportunity.” Corp.
Express, 292 F.3d at 780–81; see also St. Joseph News Press,
345 N.L.R.B. at 479 (“Most importantly, the carriers can hire
full-time substitutes . . . .”).
Another aspect of the Operating Agreement is significant,
and is novel under our precedent. Contractors can assign at
law their contractual rights to their routes, without FedEx’s
permission. The logical result is they can sell, trade, give, or
even bequeath their routes, an unusual feature for an
employer-employee relationship. In fact, the amount of
consideration for the sale of a route is negotiated “strictly
between the seller and the buyer,” with no FedEx involvement
at all other than the new route owner must also be “qualified”
under the Operating Agreement, Representation Decision, slip
op. at 30, with “qualified” merely meaning the new owner of
the route also satisfies Department of Transportation (“DOT”)
regulations, see id. at 8–10. Although FedEx assigns routes
without nominal charge, the record contains evidence, as the
Regional Director expressly found, that at least two
contractors were able to sell routes for a profit ranging from
$3,000 to nearly $16,000. See id. at 30–32, 38–39.
13
In its argument to this court, the Board, echoed by the
dissent, discounts this evidence of entrepreneurial opportunity
by saying any so-called profit merely represents the value of
the vehicles, which were sold along with the routes. But if a
vehicle depreciates in value, it is not worth as much as it was
before; that is tautological. Here, buyers paid more for a
vehicle and route than just the depreciated value of the
vehicle—in one instance more than $10,000 more. Therefore,
as the Regional Director did, we find this value is profit.
Compare Representation Decision, slip op. at 38 (“Neal’s
profit on the sale of his route was only $3000 to $6000,” and
“[a]fter deducting the value of the truck . . . it appears that, at
best, Ferreira paid Jung somewhere between $11,000 and
$16,000 for the route.”) with Dis. Op. at 24 (suggesting no
“gain at all” may have been shown). The amount of profit
may be “murky,” as it may be as high as $6,000 and $16,000
or as low as $3,000 or $11,000, respectively, but the profit is
real. Representation Decision, slip op. at 38. That this
potential for profit exists is unsurprising: routes are
geographically defined, and they likely have value dependent
on those geographic specifics which some contractors can
better exploit than others. For example, as people move into
an area, the ability to profit from that migration varies; some
contractors using more efficient methods can continue to
serve the entire route, while others cannot.
It is similarly confused to conclude FedEx gives away
routes for free. See Dis. Op. at 23. A contractor agrees to
provide a service in return for compensation, i.e., both sides
give consideration. If a contractor does not do what she says,
FedEx suffers damages, just as she does if FedEx does not
pay what is owed. Servicing a route is not cheap; one needs a
truck (which the contractor pays for) and a driver (which the
contractor also pays for, either directly or in kind). To say
this is giving away a route is to say when one hires a
14
contractor to build a house, one is just giving away a
construction opportunity. All of this evidence thus supports
finding these contractors to be independent.
The Regional Director, however, thought FedEx’s
business model distinguishable from those where the Board
had concluded the drivers were independent contractors. For
example, FedEx requires: contractors to wear a recognizable
uniform and conform to grooming standards; vehicles of
particular color (white) and within a specific size range; and
vehicles to display FedEx’s logo in a way larger than that
required by DOT regulations. The company insists drivers
complete a driving course (or have a year of commercial
driving experience, which need not be with FedEx) and be
insured, and it “conducts two customer service rides per year”
to audit performance. FedEx provides incentive pay (as well
as fuel reimbursements in limited instances) and vehicle
availability allotments, and requires contractors have a vehicle
and driver available for deliveries Tuesday through Saturday.
Id. at 9–21. Moreover, FedEx can reconfigure routes if a
contractor cannot provide adequate service, though the
contractor has five days to prove otherwise, and is entitled to
monetary compensation for the diminished value of the route.
Id. at 16. These aspects of FedEx’s operation are
distinguishable from the business models in Dial-A-Mattress,
326 N.L.R.B. 884 (contractors arranged their own training,
could decline work, did not wear uniforms, could use any
vehicle, and were provided no subsidies or minimum
compensation) and Argix Direct, Inc., 343 N.L.R.B. 1017
(2004) (contractors could decline work, delivered to major
retailers using any vehicle, and had no guaranteed income).
But those distinctions, though not irrelevant, reflect
differences in the type of service the contractors are providing
rather than differences in the employment relationship. In
15
other words, the distinctions are significant but not sufficient.
FedEx Home’s business model is somewhat unique. The
service is delivering small packages, mostly to residential
customers. Unlike some trucking companies, its drivers are
not delivering goods that FedEx sells or manufacturers, nor
does FedEx move freight for a limited number of large
clients. Instead, it is an intermediary between a diffuse group
of senders and a broadly diverse group of recipients. With
this model comes certain customer demands, including safety.
As the Internal Revenue Service (“IRS”) persuasively notes,
and ordinary experience confirms, a uniform requirement
often at least in part “is intended to ensure customer security
rather than to control the [driver].” INTERNAL REVENUE
SERVICE, EMPLOYMENT TAX GUIDELINES: CLASSIFYING
CERTAIN VAN OPERATORS IN THE MOVING INDUSTRY 23,
http://www.irs.gov/pub/irs-utl/van-ops.pdf (last visited April
3, 2009).7 And once a driver wears FedEx’s logo, FedEx has
an interest in making sure her conduct reflects favorably on
that logo, for instance by her being a safe and insured
driver—which is required by DOT regulations in any event.
See Representation Decision, slip op. at 8–9, 14, 24.
We have held that constraints imposed by customer
demands and government regulations do not determine the
employment relationship. See C.C. Eastern, 60 F.3d at 859
(“[W]here a company’s control over an aspect of the workers’
performance is motivated by a concern for customer service,
that control does not suggest an employment relationship.”);
7
We, of course, are not deferring to the IRS. See Dis. Op. at 15
n.10. Our standard of review here is unusual. Though not de novo,
we must enforce the bounds on the Board’s jurisdiction set by
Congress. NAVL, 869 F.2d at 598. This statement is merely
persuasive authority that is relevant in light of our precedent that
measures springing from customer demands do not create an
employee relationship. C.C. Eastern, 60 F.3d at 859.
16
NAVL, 869 F.2d at 599 (“[E]mployer efforts to monitor,
evaluate, and improve the results of ends of the worker’s
performance do not make the worker an employee.”); id.
(“[R]estrictions upon a worker’s manner and means of
performance that spring from government regulation . . . do
not necessarily support a conclusion of employment status”
because the company “is not controlling the driver,” the law
is.). As our “emphasis [shifts] to entrepreneurialism,” Corp.
Express, 292 F.3d at 780, these precedents apply a fortiori.
Likewise, “an incentive system designed ‘to ensure that
the drivers’ overall performance meets the company
standards’ . . . is fully consistent with an independent
contractor relationship.” C.C. Eastern, 60 F.3d at 860
(quoting NAVL, 869 F.2d at 603). At the same time, a
contractual willingness to share a small part of the risk—for
instance, by providing fuel reimbursements when prices jump
sharply, or by guaranteeing a certain minimum amount of
income for making a vehicle available—does not an employee
make. See Argix Direct, Inc., 343 N.L.R.B. at 1019
(contractors were independent even though the “[e]mployer
also pays the owner-operators a fuel surcharge when the price
of fuel surpasses a preset average”).
The Regional Director also emphasized that these
“contractors perform a function that is a regular and essential
part of FedEx Home’s normal operations, the delivery of
packages,” and that few have seized any of the alleged
entrepreneurial opportunities. Representation Decision, slip
op. at 34, 38. While the essential nature of a worker’s role is
a legitimate consideration, it is not determinative in the face
of more compelling countervailing factors, see Aurora
Packing v. NLRB, 904 F.2d 73, 76 (D.C. Cir. 1990), otherwise
companies like FedEx could never hire delivery drivers who
are independent contractors, a consequence contrary to
17
precedent, see St. Joseph News Press, 345 N.L.R.B. at 479.
And both the Board and this court have found the failure to
take advantage of an opportunity is beside the point. See C.C.
Eastern, 60 F.3d at 860 (opportunities cannot be ignored
unless they are the sort workers “cannot realistically take,”
and even “one instance” of a driver using such an opportunity
can be sufficient to “show[] there is no unwritten rule or
invisible barrier preventing other drivers from likewise
exercising their contractual right”); Arizona Republic, 349
N.L.R.B. at 1045. Instead, “it is the worker’s retention of the
right to engage in entrepreneurial activity rather than his
regular exercise of that right that is most relevant for the
purpose of determining whether he is an independent
contractor.” C.C. Eastern, 60 F.3d at 860.8
III.
Our dissenting colleague reads our precedent differently
than we do, and thus reaches a different conclusion. Of
course the facts in our past holdings are not identical to those
here, but there is no reason to distinguish this case from those
where we have rejected the Board’s attempt to assert
jurisdiction over independent contractors. In fact, this case is
relatively straightforward because not only do these
contractors have the ability to hire others without FedEx’s
participation, only here do they own their routes—as in they
can sell them, trade them, or just plain give them away.
Moreover, if this court had shown as much deference to the
Board as our colleague seems to suggest is its due, we wonder
how C.C. Eastern and NAVL could possibly have been
8
The Regional Director noted too that “FedEx Home offers what is
essentially a take-it-or-leave-it agreement.” But we will “draw no
inference of employment status from merely the economic controls
which many corporations are able to exercise over independent
contractors with whom they contract.” NAVL, 869 F.2d at 599.
18
decided the way that they were. Because the dispute turns on
precedent, we recommend you read our cases—they are quite
short—and see for yourself whether our friend’s fight really is
with us at all.
The dissent, for instance, argues that emphasizing
entrepreneurialism has only truly begun with this case, and
suggests we are doing so here for reasons apart from
allegiance to precedent. See, e.g., Dis. Op. at 11–12, 30. Lest
any be confused, we again quote Corporate Express: “[W]e
uphold as reasonable the Board’s decision, at the urging of the
General Counsel, to focus not upon the employer’s control of
the means and manner of the work but instead upon whether
the putative independent contractors have a ‘significant
entrepreneurial opportunity for gain or loss.’” 292 F.3d at
780. We explicitly “agree[d] with the Board’s suggestion that
the latter factor better captures the distinction between an
employee and an independent contractor,” because, as
reflected by the Restatement’s comment, it is not “the degree
of supervision under which [one] labors but . . . the degree to
which [one] functions as an entrepreneur—that is, takes
economic risk and has the corresponding opportunity to profit
from working smarter, not just harder,” that better illuminates
one’s status. Id. We retained the common law test (as is
required by the Court’s decision in United Insurance), but
merely “shift[ed our] emphasis to entrepreneurialism,” using
this “emphasis” to evaluate common law factors such as
whether the contractor “supplies his own equipment,” id.
Corporate Express is thus doctrinally consistent with United
Insurance and the Restatement.
Likewise, though conceding ours is a “fair reading of
[Corporate Express], which contains considerable language
regarding entrepreneurial opportunity and the benefits of
using such a test,” the dissent nonetheless argues there is a
19
narrower way to understand that case such that it still focuses
on the extent of control. Dis. Op. at 9. Put another way,
Corporate Express—despite its seemingly unambiguous
language—to him need not be read as evincing a shift towards
entrepreneurialism at all. We cannot adopt that reading
because the court affirmatively declined to determine the
contractors’ status under a “means and manner test.” Corp.
Express, 292 F.3d at 780 (“[W]e need not answer that
question . . . .”). We take Corporate Express at its word.
But even if Corporate Express never happened, the result
here is unchanged. While on some points C.C. Eastern and
NAVL are distinguishable—for instance, in C.C. Eastern there
were no appearance requirements for man or machine (though
“the tractor must be suitable for the task at hand”), see 60
F.3d at 859, as in NAVL, 869 F.2d at 600—the overwhelming
majority of factors favoring independent contractor status are
the same, and, importantly, this case is particularly
straightforward because only here can the contractors own
and transfer the proprietary interest in their routes. Moreover,
all contractors here own their vehicles, something that cannot
be said in NAVL, where not even the majority did. See id.
True, these drivers—who need not be, and not always are, the
same persons as the contractors—must wear uniforms and the
like, but a rule based on concern for customer service does not
create an employee relationship. See C.C. Eastern, 60 F.3d at
859. And while in C.C. Eastern “we [were] able to find . . .
only one instance of a driver” using an entrepreneurial
opportunity, that lone “example show[ed] that there [was] no
unwritten rule or invisible barrier preventing other drivers
from likewise exercising their contractual right.” Id. at 860.
In this case, we need not and do not rely on just one example
of the exercise of rights. Even on an incomplete record there
are many such examples; routes have been sold for a profit;
substitutes and helpers have been hired without FedEx’s
20
involvement; one contractor has negotiated for higher rates;
and contractors have incorporated. Under the fairest reading
of our precedent, these are independent contractors.
IV.
We have considered all the common law factors, and, on
balance, are compelled to conclude they favor independent
contractor status. The ability to operate multiple routes, hire
additional drivers (including drivers who substitute for the
contractor) and helpers, and to sell routes without permission,
as well as the parties’ intent expressed in the contract, augurs
strongly in favor of independent contractor status. Because
the indicia favoring a finding the contractors are employees
are clearly outweighed by evidence of entrepreneurial
opportunity, the Board cannot be said to have made a choice
between two fairly conflicting views. Though evidence can
be marshaled and debater’s points scored on both sides, the
evidence supporting independent contractor status is more
compelling under our precedent. The evidence might have
been stronger still had not the Regional Director erroneously
excluded the national data. But even as the record stands, the
Board’s determination was legally erroneous.
Accordingly, we grant the petition, vacate the Board’s
order, and deny the cross-application for enforcement.
So ordered.
GARLAND, Circuit Judge, dissenting in part: In National
Labor Relations Board v. United Insurance Co. of America, the
Supreme Court held that Congress intended “the Board and the
courts” to “apply the common-law agency test . . . in
distinguishing an employee from an independent contractor”
under the National Labor Relations Act (NLRA). 390 U.S. 254,
256 (1968). In this case, the National Labor Relations Board
(NLRB) applied that multi-factor test and concluded that FedEx
Home Delivery’s drivers are the company’s employees. My
colleagues disagree, concluding that the drivers are independent
contractors.
This is not merely a factual dispute. Underlying my
colleagues’ conclusion is their view that the common-law test
has gradually evolved until one factor -- “whether the position
presents the opportunities and risks inherent in
entrepreneurialism” -- has become the focus of the test. Slip Op.
at 7, 18. Moreover, in their view, this factor can be satisfied by
showing a few examples, or even a single instance, of a driver
seizing an entrepreneurial opportunity. Id. at 17.
Although I do not doubt my colleagues’ sincerity, I detect no
such evolution. To the contrary, the Board and the courts have
continued to follow the Supreme Court’s injunction that “there
is no shorthand formula or magic phrase that can be applied to
find the answer, but all of the incidents of the relationship must
be assessed and weighed with no one factor being decisive.”
United Ins., 390 U.S. at 258. The common-law test may well be
“unwieldy,” Slip Op. at 7, but a court of appeals may not
“‘displace the Board’s choice between two fairly conflicting
views, even though the court would justifiably have made a
different choice had the matter been before it de novo.’” United
Ins., 390 U.S. at 260 (quoting Universal Camera Corp. v. NLRB,
340 U.S. 474, 488 (1951)). While the NLRB may have authority
to alter the focus of the common-law test, see Chevron U.S.A.
Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43,
863-64 (1984), this court does not. Because “the least that can
2
be said for the Board’s decision is that it made a choice between
two fairly conflicting views, . . . the Court of Appeals should
have enforced the Board’s order.” United Ins., 390 U.S. at 260.
Accordingly, on the existing record, I cannot join in condemning
the Board’s determination.
I can and do, however, fault the Board’s refusal to give
FedEx a fair opportunity to make its case under the appropriate
test. As the court correctly notes, the Regional Director refused
to permit FedEx to introduce evidence that may be relevant to
the question of whether its drivers have significant
entrepreneurial opportunities. Regardless of whether one
considers entrepreneurial opportunity as only one factor (as it is
in the common-law test) or as the focus of the test (as my
colleagues believe it to be), FedEx surely had the right to
introduce the evidence necessary to make its case.
I
A
The NLRA makes it “an unfair labor practice for an
employer . . . to refuse to bargain collectively with the
representatives of his employees.” 29 U.S.C. § 158(a)(5).
Section 2(3) of the Act, as amended by the 1947 Labor
Management Relations Act, provides that the term “employee”
“shall not include . . . any individual having the status of an
independent contractor.” 29 U.S.C. § 152(3). In United
Insurance, the Supreme Court held that the “obvious purpose of
this amendment was to have the Board and the courts apply
general agency principles in distinguishing between employees
and independent contractors under the Act. . . . Thus there is no
doubt that we should apply the common-law agency test . . . in
distinguishing an employee from an independent contractor.”
3
United Ins., 390 U.S. at 256.1 The Court recognized that “[t]here
are innumerable situations which arise in the common law where
it is difficult to say whether a particular individual is an
employee or an independent contractor. . . . In such a situation as
this there is no shorthand formula or magic phrase that can be
applied to find the answer, but all of the incidents of the
relationship must be assessed and weighed with no one factor
being decisive. What is important is that the total factual context
is assessed in light of the pertinent common-law agency
principles.” Id. at 258.
The cases under review in United Insurance presented the
question of whether certain agents of an insurance company were
employees or independent contractors. The Supreme Court
determined that
the decisive factors in these cases become the
following: the agents . . . perform functions that are an
essential part of the company’s normal operations; they
need not have any prior training or experience, but are
trained by company supervisory personnel; they do
business in the company’s name with considerable
assistance and guidance from the company and its
managerial personnel and ordinarily sell only the
company’s policies; the “Agent’s Commission Plan”
that contains the terms and conditions under which they
operate is promulgated and changed unilaterally by the
1
See also NLRB v. Town & Country Elec., Inc., 516 U.S. 85, 94
(1995) (noting that “[i]n the past, when Congress has used the term
‘employee’ without defining it, we have concluded that Congress
intended to describe the conventional master-servant relationship as
understood by common-law agency doctrine” (quoting Nationwide
Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992) (quoting Cmty.
for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40 (1989)))).
4
company; the agents account to the company for the
funds they collect under an elaborate and regular
reporting procedure; the agents receive the benefits of
the company’s vacation plan and group insurance and
pension fund; and the agents have a permanent working
arrangement with the company under which they may
continue as long as their performance is satisfactory.
Id. at 258-59. The Court confirmed that the Board had
“examined all of these facts and found that they showed the debit
agents to be employees.” Id. at 260. This finding, the Court
said, “involved the application of law to facts -- what do the facts
establish under the common law of agency: employee or
independent contractor?” Id. Although the Court noted that
such a determination “involved no special administrative
expertise that a court does not possess,” it nonetheless held that,
“‘even as to matters not requiring expertise,’” a court of appeals
may not “‘displace the Board’s choice between two fairly
conflicting views, even though the court would justifiably have
made a different choice had the matter been before it de novo.’”
Id. (quoting Universal Camera Corp., 340 U.S. at 488). As long
as it “can be said for the Board’s decision . . . that it made a
choice between two fairly conflicting views, . . . the Court of
Appeals should . . . enforce[] the Board’s order. It [is] error to
refuse to do so.” Id.
In the succeeding decades, the NLRB has consistently
“[a]ppl[ied] the common-law agency test as interpreted by the
Supreme Court in NLRB v. United Insurance Co.” to determine
whether a worker is an employee or an independent contractor.
Roadway Package Sys., Inc. (Roadway III), 326 N.L.R.B. 842,
843 (1998); id. at 849 (declaring that the Supreme Court’s “cases
teach us not only that the common law of agency is the standard
to measure employee status but also that we have no authority to
5
change it”).2 In so doing, the Board has looked to the
Restatement (Second) of Agency for the factors relevant to
making that determination. See, e.g., cases cited supra note 2.
Those ten (nonexhaustive) factors are set out in the margin.3
Following the injunction of the Supreme Court, the Board has
2
Accord Ariz. Republic, 349 N.L.R.B. 1040, 1042 (2007); St.
Joseph News-Press, 345 N.L.R.B. 474, 477-78 (2005); Argix Direct,
Inc., 343 N.L.R.B. 1017, 1020 & n.13 (2004).
3
The Restatement provides:
In determining whether one acting for another is a servant or an
independent contractor, the following matters of fact, among
others, are considered:
(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 a part of the regular business of the
employer;
(i) whether or not the parties believe they are creating the relation
of master and servant; and
(j) whether the principal is or is not in business.
RESTATEMENT (SECOND) OF AGENCY § 220(2).
6
continued to reaffirm that “‘all of the incidents of the
relationship must be assessed and weighed with no one factor
being decisive.’” Roadway III, 326 N.L.R.B. at 850 (quoting
United Ins., 390 U.S. at 258); see, e.g., Ariz. Republic, 349
N.L.R.B. at 1042-46; St. Joseph News-Press, 345 N.L.R.B. at
477-78.
This Circuit has likewise recognized that “Congress
intended that traditional agency law principles guide the
determination whether workers are employees . . . or independent
contractors,” N. Am. Van Lines, Inc. v. NLRB (NAVL), 869 F.2d
596, 598 (D.C. Cir. 1989), and has looked to the Restatement
factors for those principles, id. at 599-600. See Local 777,
Democratic Union Org. Comm. v. NLRB (Local 777), 603 F.2d
862, 872-73 (D.C. Cir. 1978); cf. Cmty. for Creative Non-
Violence v. Reid, 490 U.S. 730, 751-52 (1989) (citing both
United Insurance and the Restatement’s “nonexhaustive list of
factors relevant to determining whether a hired party is an
employee” in construing the meaning of the term “employee”
under the Copyright Act of 1976). “[T]he ultimate
determination,” we have said, “requires a broad examination of
all facets of the relationship between [the] company and” the
worker. NAVL, 869 F.2d at 604 (citing United Ins., 390 U.S. at
258); see C.C. Eastern, Inc. v. NLRB, 60 F.3d 855, 858 (D.C.
Cir. 1995). As we further noted in NAVL, “[i]n applying
traditional agency law principles, the NLRB and the courts have
adopted a right-to-control test.” 869 F.2d at 599. That “test
requires an evaluation of all the circumstances,” but it focuses
the greatest attention on those factors indicating “‘the extent of
the actual supervision exercised by a putative employer over the
“means and manner” of the workers’ performance.’” Id.
7
(quoting Local 777, 603 F.2d at 873); see C.C. Eastern, 60 F.3d
at 858 (same).4
B
My colleagues contend that “[g]radually,” both this Court
and the Board shifted away from “the unwieldy control inquiry
in favor of a more accurate proxy: whether the ‘putative
independent contractors have significant entrepreneurial
opportunity for gain or loss.’” Slip Op. at 6-7 (quoting
Corporate Express Delivery Sys. v. NLRB, 292 F.3d 777, 780
(D.C. Cir. 2002)). “[W]hile all the considerations at common
law remain in play,” my colleagues maintain that now the
“emphasis” is on “whether the position presents the opportunities
and risks inherent in entrepreneurialism.” Id. at 7.
The cases, however, do not evidence this gradual evolution
to a test that emphasizes entrepreneurial opportunity. According
to my colleagues, the evolutionary process began “implicit[ly]”
in our decisions in NAVL and C.C. Eastern. Slip Op. at 7. It is
true that those decisions listed entrepreneurial opportunity as a
relevant factor, notwithstanding that it is not expressly
mentioned in either United Insurance or the Restatement (or in
4
See also Seattle Opera v. NLRB, 292 F.3d 757, 765 & n.11 (D.C.
Cir. 2002) (applying the “common law definition” and concluding that
auxiliary choristers are employees because “the Opera possesses the
right to control [them] in the material details of their performance”);
Constr., Bldg. Material, Ice & Coal Drivers v. NLRB, 899 F.2d 1238,
1242 (D.C. Cir. 1990) (noting that “[t]he right to control the ‘means
and manner’ of job performance . . . is the leitmotiv recurrent in the
cases” that consider whether construction truck drivers are employees
or independent contractors).
8
any comment to the Restatement5). But those decisions
explicitly stated that entrepreneurial opportunity was only one of
multiple factors to consider -- and not the most important one.
In C.C. Eastern, for example, we concluded that the
entrepreneurial opportunities afforded by a driver’s “right to hire
. . . his own employees to help him” and to “use his tractor
himself to haul for anyone” had “some probative weight,” but
that they were “less important to our determination of the
drivers’ status than [wa]s the absence of evidence that the
Company supervises the means and manner of their work.” 60
F.3d at 859, 860 (emphasis added).6 Similarly, we said in NAVL
that: “Other factors [than control] weigh in the determination,”
including “the extent to which the worker has assumed
entrepreneurial risk and stands to gain from risks undertaken
. . . . However, these factors are of far less importance than the
central inquiry whether the corporation exercises control over the
manner and means of the details of the worker’s performance;
indeed, these factors are probative only to the extent that they
bear upon and further that inquiry.” 869 F.2d at 599-600
(emphasis added). Nothing in these unambiguous declarations
suggests any kind of “struggle[] to articulate exactly what we
meant” in those cases. Slip Op. at 6. The contention that C.C.
5
Restatement comment (d), to which my colleagues refer, states
only that a “full-time cook is regarded as a servant” -- and not an
independent contractor -- “although it is understood that the employer
will exercise no control over the cooking.” Restatement (Second) of
Agency § 220(1) cmt. d. The comment does not mention
entrepreneurial opportunity, which plays no role in its analysis of the
cook’s status.
6
See also C.C. Eastern, 60 F.3d at 858 (“Whether a worker is an
independent contractor or an employee is a function of the amount of
control that the company has over the way in which the worker
performs his job.”).
9
Eastern and NAVL implicitly signaled the advent of an
evolutionary process, id. at 6-7, is simply incorrect.
My colleagues cite only one case from this (or any) Circuit,
our 2002 opinion in Corporate Express, for the proposition that
entrepreneurial opportunity has “explicit[ly]” become the
emphasis of the independent contractor test. Slip Op. at 7. I do
not dispute that theirs is one fair reading of that opinion, which
contains considerable language regarding entrepreneurial
opportunity and the benefits of using such a test. But Corporate
Express did not purport to overrule Supreme Court, Circuit, and
Board precedent. Indeed, in affirming as reasonable the Board’s
determination that the owner-operator drivers in that case were
not independent contractors, the court not only agreed that they
lacked entrepreneurial opportunity, but also acknowledged that
the Board may have correctly determined that the employer
controlled the way in which they performed their jobs.
Corporate Express, 292 F.3d at 779-80. Hence, Corporate
Express can also be read as merely holding that the Board was
reasonable in determining that entrepreneurial opportunity tipped
the balance in that case -- a logical result given that the court
thought the vector of the other common-law factors somewhat
unclear, see id. at 780 & n.*, while finding that the “owner-
operators lacked all entrepreneurial opportunity,” id. at 780-81
(emphasis added). And when there are two possible readings of
an opinion, only one of which is consistent with earlier
precedent, the appropriate course is to adopt the consistent
reading -- on the presumption that the court followed the
command of stare decisis. Cf. Indep. Cmty. Bankers of Am. v.
Bd. of Governors of the Fed. Reserve Sys., 195 F.3d 28, 34 (D.C.
Cir. 1999) (“In the event of conflicting panel opinions . . . the
10
earlier one controls, as one panel of this court may not overrule
another.” (internal quotation marks and citation omitted)).7
There was certainly nothing in the NLRB’s opinion in
Corporate Express to suggest that entrepreneurial opportunity
had become the focus of the Board’s own analysis. To the
contrary, the Board simply followed its traditional approach of
examining the common-law factors -- including, inter alia, both
entrepreneurial opportunity and employer control. Corporate
Express Delivery Sys., 332 N.L.R.B. 1522, 1522 (2000). After
doing so, it concluded that, “weighing all of the incidents of their
relationship with the Respondent, we find that the owner-
operators are employees and not independent contractors.” Id.
(emphasis added).
My colleagues maintain that the evolution toward an
emphasis on entrepreneurial opportunity “seems to play a part
in the Board’s own cases,” although they “readily concede the
Board’s language has not been . . . unambiguous.” Slip Op. at 8.
The principal NLRB decision upon which they rely is Arizona
Republic, a decision issued after the Regional Director’s decision
in this case. Ariz. Republic, 349 N.L.R.B. 1040 (May 8, 2007).
But Arizona Republic does not support my colleagues’
proposition either. Once again, it is true that one of the factors
weighing in favor of the independent contractor determination in
that case was “entrepreneurial potential.” Id. at 1042. There
simply is no indication, however, that this factor was the
7
I do not suggest that Corporate Express should be read as
“focus[ing] on the extent of control,” Slip Op. at 19, but rather that it
should not be read as giving primacy to entrepreneurial opportunity.
Moreover, to the extent that there has been a shift of emphasis in the
Board’s own cases, it has been toward regarding no single factor as
primary -- whether it be opportunity or control. See St. Joseph News-
Press, 345 N.L.R.B. at 478; Roadway III, 326 N.L.R.B. at 850.
11
“emphasis” of the test Arizona Republic applied. To the
contrary, the Board announced that, “[i]n determining the status
of the [newspaper] carriers in this case, we rely on . . . the
common-law factors.” Id. at 1043. It then proceeded to examine
the Restatement factors individually, id. at 1043-46, repeating its
oft-stated mantra that “this list of factors is not exclusive or
exhaustive, and that, in applying the common-law agency test,
[we] will consider ‘all the incidents of the individual’s
relationship to the employing entity,’” id. at 1042 (quoting
Roadway III, 326 N.L.R.B. at 850). The Board ultimately
concluded that the majority of the factors “weigh[ed] in favor”
of finding that the carriers were independent contractors. Id. at
1043-46. One of those factors was entrepreneurial opportunity;
another was the employer’s lack of control over the carriers. Id.
But the Board gave pride of place to neither one, declaring only
that the common-law factors, “on balance,” yielded the
conclusion that the carriers were independent contractors. Id. at
1043. The same traditional common-law analysis was employed
in both of the other NLRB decisions that my colleagues cite.
Slip Op. at 9.8
Finally, I do not dispute my colleagues’ contention that the
multi-factor analysis of the common law is “not especially
amenable to any sort of bright-line rule.” Slip Op. at 4-5.
Although they acknowledge that an emphasis on entrepreneurial
8
See St. Joseph News-Press, 345 N.L.R.B. at 478 (noting that “the
Board’s analysis . . . [has] recognized, as does Supreme Court law,
that both the right of control and other factors, as set out in the
Restatement, are to be used to evaluate claims that hired individuals
are independent contractors”); Dial-A-Mattress Operating Corp., 326
N.L.R.B. 884, 891 (1998) (declaring that “the list of factors
differentiating ‘employee’ from ‘independent contractor’ status under
the common-law agency test is nonexhaustive, with no one factor
being decisive”).
12
opportunity “does not make applying the test purely
mechanical,” they maintain that “the line drawing is easier”
under that test. Id. at 8. There is no question that the common-
law agency test makes for difficult line drawing. Indeed, the
Supreme Court expressly acknowledged as much when it
announced the test. See United Ins., 390 U.S. at 258 (“There are
innumerable situations which arise in the common law where it
is difficult to say whether a particular individual is an employee
or an independent contractor . . . .”). It may also be true that line
drawing under an entrepreneurial opportunity test would be
easier, although that is hardly assured. After all, while my
colleagues perceive clear entrepreneurial opportunity in this case,
neither the Board nor I see it that way. See infra Part II.
But the comparative practical advantage of one or the other
of these two tests has no bearing on which one we must apply.
Although the NLRB may have authority to alter the test, or at
least to alter its focus, see Chevron, 467 U.S. at 842-43, 863-64,
this court does not. Until the Supreme Court or the Board tells
us differently, we must continue to apply the multi-factor
common-law test as set forth by the Supreme Court and applied
by the Board.
II
In this case, the NLRB’s Regional Director applied the
traditional “common law agency test.” FedEx Home Delivery
and Local 25, N.L.R.B. Case Nos. 1-RC-22034, 22035, slip op.
at 33 (First Region, Sept. 20, 2006) [hereinafter Regional
Director’s Decision]. In so doing, she “consider[ed] all the
incidents of the individual’s relationship with the employing
entity,” id., including both the extent of FedEx’s control over the
drivers and the extent of the drivers’ entrepreneurial
opportunities, id. at 35-36. Although the Regional Director
acknowledged many of the facts cited by my colleagues in
13
support of FedEx’s contention that the contractors are
independent contractors, facts that I do not rehearse here, she
concluded that they were outweighed by other factors supporting
employee status. Id. at 39. Part II.A reviews the bulk of the
factors that the Director found to support employee status. Part
II.B discusses her analysis of the issue of entrepreneurial
opportunity.
A
In a lengthy and considered opinion, the Regional Director
found the following facts to favor a determination that FedEx
Home Delivery’s drivers, whom the company calls
“contractors,” were employees:
[A]ll the FedEx Home contractors perform a function
that is a regular and essential part of FedEx Home’s
normal operations, the delivery of packages. . . . [A]ll
contractors must do business in the name of FedEx
Home[,] . . . wear[] FedEx Home-approved uniforms
and badges, . . . [and] operate vehicles that must meet
FedEx Home specifications and uniformly display the
FedEx Home name, logo, and colors. . . . No prior
delivery training or experience is required, and FedEx
Home will train those with no experience. . . .
. . . [C]ontractors are not permitted to use their
vehicles for other purposes while providing service for
FedEx Home. The contractors have a contractual right
to use their FedEx Home trucks in business activity
outside their relationship with FedEx Home during off-
hours, provided they remove all FedEx Home
markings, but only one former multiple route contractor
. . . and no current contractors at either Wilmington
terminal have ever done so. . . .
14
. . . FedEx Home exercises substantial control over
all the contractors’ performance of their functions.
FedEx Home offers what is essentially a take-it-or-
leave-it agreement. . . . [It] retains the right to
reconfigure the service area unilaterally. All
contractors must furnish a FedEx Home-approved
vehicle and FedEx Home-approved driver daily from
Tuesday through Saturday; they do not have discretion
not to provide delivery service on a given day. While
all contractors control their starting times and take
breaks when they wish, their control over their work
schedule is circumscribed by the requirement that all
packages be delivered on the day of assignment. . . .
. . . FedEx Home provides support to all its
contractors in various ways that are inconsistent with
independent contractor status. . . . FedEx Home
provides extensive support to contractors by offering
the Business Support Package and arranging for the
required insurance, thus providing an array of required
goods and services that would be far more difficult for
contractors to arrange on their own. . . . FedEx Home
also offers to arrange for approved substitute drivers for
its contractors by virtue of the Time Off Program.
FedEx Home provides contractors who maintain
sufficient vehicle maintenance accounts with $100 per
accounting period to help defray repair costs[, and]
requires contractors to permit FedEx Home to pay
certain vehicle-related taxes and fees on their behalf
and to have the payments deducted from their
settlement.
Regional Director’s Decision at 34-37 (internal citations
omitted). Many of these are the kind of facts that United
15
Insurance, the Restatement, and numerous Circuit and Board
decisions confirm are indicative of employee status.9
My colleagues nonetheless reject the import of many of
these facts, arguing that they merely “reflect differences in the
type of service the contractors are providing rather than
differences in the employment relationship.” Slip Op. at 14. In
particular, the court rejects the import of the following
requirements imposed by FedEx: that drivers wear a
recognizable uniform; that vehicles be of a particular color and
size range; that trucks display the FedEx logo in a size larger
than Department of Transportation regulations require; that
drivers complete a driving course if they do not have prior
training; that drivers submit to two customer service rides per
year to audit their performance; and that a truck and driver be
available for deliveries every Tuesday through Saturday. Id.
The courts and the Board,10 however, have repeatedly regarded
the presence or absence of these very factors as important in
9
See, e.g., United Ins., 390 U.S. at 256-58; NAVL, 869 F.2d at
600-04; Local 777, 603 F.2d at 873-81; Argix Direct, 343 N.L.R.B. at
1017-20; Roadway III, 326 N.L.R.B. at 843-48, 851-54;
RESTATEMENT (SECOND) OF AGENCY § 220(2) (1958).
10
It is to the precedents of the Board, and not to those of the
Internal Revenue Service, that we owe deference, as only the former
is charged with enforcing the provisions of the NLRA. Compare Slip
Op. at 15 (citing an IRS guideline to support the proposition that a
uniform requirement does not reflect employer control), with, e.g.,
Roadway III, 326 N.L.R.B. at 851-52 (citing the employer’s
requirement that its drivers wear an “approved uniform” as evidence
that they are employees).
16
determining whether a worker is an employee or independent
contractor.11
One factor that the Regional Director emphasized was that
the drivers “perform a function that is a regular and essential part
of FedEx Home’s normal operations, the delivery of packages”
to homes. Slip Op. at 16. Although my colleagues acknowledge
that “the essential nature of a worker’s role is a legitimate
consideration,” they minimize it as “not determinative.” Id. But
that is true of every factor in the common-law test. See United
Ins., 390 U.S. at 258 (holding that “all of the incidents of the
relationship must be assessed and weighed with no one factor
being decisive”). Moreover, the cases have repeatedly cited this
11
See, e.g., United Ins., 390 U.S. at 258-59 (listing, among other
“decisive factors” of employee status, the fact that the insurance
agents “need not have any prior training or experience, but are trained
by company supervisory personnel,” and that “they do business in the
company’s name”); C.C. Eastern, 60 F.3d at 858 (finding the
following facts, among many others, to be indicative of an
independent contractor relationship: the employer does not “exercise
any control over the drivers’ dress or appearance” or “require the
tractors to be of any specific type, size, or color”); NAVL, 869 F.2d at
600 (citing, among other “principal reasons” why the drivers are
independent contractors, the fact that they “retain nearly absolute
control” over “their dress” and “when they work”); Corporate Express
Delivery Sys., 332 N.L.R.B. at 1522 (finding that owner-operator
drivers are employees because, inter alia, “[t]hey are required to
display the Respondent’s logo on their vehicles and to wear certain
color trousers, shirts, and shoes, if they opt not to wear uniforms”);
Roadway III, 326 N.L.R.B. at 851-52 (citing, among other factors in
concluding that drivers are employees, the facts that: “they need not
have any prior training or experience, but receive training from the
company; they do business in the company’s name”; they wear an
“approved uniform”; and there is a “‘business support package’ [that]
helps ensure that the drivers’ vehicles are properly maintained”).
17
particular factor in concluding that workers are employees.12 In
short, there is no basis for discounting the significance of the
traditional factors upon which the Regional Director relied in
concluding that the FedEx drivers are employees rather than
independent contractors.
B
In accord with court and agency precedent, the Regional
Director also considered whether FedEx Home Delivery’s
drivers have significant entrepreneurial opportunity for gain or
loss. For the following reasons, she concluded that the evidence
of entrepreneurial opportunity was weak:
The contractors’ compensation package also supports
employee status. With [one] exception . . . , FedEx
Home unilaterally establishes the rates of compensation
for all contractors. . . . [T]here is little room for the
contractors to influence their income through their own
efforts or ingenuity, as their terminal manager
determines, for the most part, how many deliveries they
will make each day. . . . A contractor’s territory may be
unilaterally reconfigured by FedEx Home. FedEx
Home tries to insulate its contractors from loss to some
12
See, e.g., United Ins., 390 U.S. at 258-59 (holding that the fact
that the insurance agents “perform functions that are an essential part
of the company’s normal operations” is a “decisive factor[]”); Aurora
Packing Co. v. NLRB, 904 F.2d 73, 76 (D.C. Cir. 1990) (noting that
“whether a worker plays an essential role in a company’s business” is
a factor “presumably because the company more likely than not would
want to exercise control over such important personnel”); Roadway
III, 326 N.L.R.B. at 851 (citing as a factor that the drivers “perform[]
essential functions that allow Roadway to compete in the small
package delivery market”); see also RESTATEMENT (SECOND) OF
AGENCY § 220(2)(h).
18
degree by means of the vehicle availability payment,
which they receive just for showing up, and the
temporary core zone density payment, both of which
payments guarantee contractors an income level
predetermined by FedEx Home, irrespective of the
contractors’ personal initiative. FedEx Home also
shields drivers from loss due to substantial increases in
fuel prices by means of the fuel/mileage settlement.
Regional Director’s Decision at 37.
Notwithstanding these findings, my colleagues perceive
many “characteristics of entrepreneurial potential” in the drivers’
relationship to FedEx. Slip Op. at 9. Some of the characteristics
they cite, however, appear to have little to do with
entrepreneurial opportunity. For example, the court’s opinion
notes that FedEx’s Standard Contractor Operating Agreement
“specifies the contractor is not an employee of FedEx for any
purpose.” Id. at 10. But the label FedEx puts on its relationship
with its workers does not affect whether they have
entrepreneurial opportunity for gain or loss.13
13
See Corporate Express, 292 F.3d at 780 n.* (affirming the
Board’s determination that, although drivers “were described in their
contract as ‘independent contractors,’” they were actually employees).
Nor is there much significance to the fact that FedEx does not
“withhold taxes.” Slip. Op. at 9 n.4. See Seattle Opera, 292 F.3d at
764 n.8 (noting that “‘if an employer could confer independent
contractor [i.e., non-employee] status through the absence of payroll
deductions there would be few employees falling under the protection
of the Act’” (quoting J. Huizinga Cartage Co. v. NLRB, 941 F.2d
616, 620 (7th Cir. 1991)). Compare also Slip Op. at 9 n.4 (noting that
FedEx “does not provide benefits”), with Corporate Express, 292 F.3d
at 780 n.* (finding that drivers were not independent contractors
notwithstanding that they “received no life or health insurance”
benefits from the company).
19
My colleagues also observe that FedEx “may not prescribe
hours of work [or] whether or when the contractors take breaks,”
and that the drivers “are not subject to reprimands or other
discipline,” Slip Op. at 10 -- all of which go not to the workers’
entrepreneurial opportunity but to the extent of the employer’s
control, a factor discussed in Part II.A above. In any event,
although FedEx does not fix specific hours or break times, it
does require its contractors to provide delivery services every
day, Tuesday through Saturday, and to finish each day’s
deliveries by the end of the day. Regional Director’s Decision
at 17, 36.14 The insurance agents in United Insurance had neither
fixed hours nor fixed break times, yet the Supreme Court
affirmed the Board’s determination that they were employees.
See 390 U.S. at 258 (noting that the “agents perform their work
primarily away from the company’s offices and fix their own
hours of work and work days”). And while FedEx does not have
a disciplinary system based on “reprimands,” Slip Op. at 10, it
does deny drivers bonuses if they fail release audits and uses
both counseling and termination as tools to ensure compliance
with work rules. Regional Director’s Decision at 12, 21. Again,
the same was true in United Insurance. See 390 U.S. at 258
(noting that if a complaint against an agent is “well founded, the
manager talks with the agent to set him straight,” “caution[s]”
him, and “[i]f improvement does not follow,” the company may
“fire [him] at any time”).
14
The Regional Director also noted that a driver cannot take a
vacation, or even a day off, when he wants to, without providing a
replacement. See Regional Director’s Decision at 26; id. at 40
(distinguishing other cases in part on the basis that drivers for those
companies were “not required to provide delivery services each day”
and “were free to elect not to accept routes on specific days”). Even
those who participate in FedEx’s Time Off Program must schedule
vacations in advance, and weeks are assigned by seniority. Id. at 25-
26.
20
In addition, my colleagues state that “[a]t least one
contractor has negotiated with FedEx for higher fees.” Slip Op.
at 10. Without agreeing that a worker’s ability to negotiate his
salary takes him out of the category of “employee,” the Regional
Director rightly regarded the only evidence on this point as quite
weak: One former manager testified that one former driver
“once requested some customer service rides to gauge if his core
zone payment was set properly, and the payment was raised as
a result, although [the manager] was not sure by how much.
There is no evidence that any other contractors at the
Wilmington facilities have negotiated a change in their core zone
payment.” Regional Director’s Decision at 20.
Closer to the mark on the issue of entrepreneurial
opportunity is the court’s observation that drivers “are
responsible for all the costs associated with operating and
maintaining their vehicles.” Slip Op. at 10.15 But FedEx does
much to limit the drivers’ risk of loss. As the Regional Director
found, the company “shields drivers from loss due to substantial
increases in fuel prices by means of the fuel/mileage settlement”
and guarantees them a significant amount of income “just for
showing up.” Regional Director’s Decision at 37. My
colleagues maintain that this “contractual willingness to share a
small part of the risk . . . does not an employee make.” Slip Op.
at 16. The NLRB reasonably differs, as to both the magnitude of
the shared risk and its import.
My colleagues further note that, under the Operator
Agreement, drivers “may use the vehicles for other commercial
or personal purposes” when they are not in the service of FedEx,
15
My colleagues also note that “all contractors here own their
vehicles.” Slip Op. at 19. The same was true in Corporate Express,
but we nonetheless found that those drivers had “no real
entrepreneurial opportunities.” 292 F.3d at 780 n.*.
21
“so long as they remove or mask all FedEx Home logos and
markings.” Slip Op. at 10. But do the drivers actually use their
trucks for other purposes? Not so much. Indeed, the most that
can be said is that “some do use them for personal uses like
moving family members,” id., hardly an indicator of a
“‘significant entrepreneurial opportunity for gain or loss,’” id. at
7 (quoting Corporate Express, 292 F.3d at 780). Although the
drivers’ use of their trucks to conduct business independent of
FedEx could well be an indicator of entrepreneurialism, the
Regional Director found that “no current contractors at either
Wilmington terminal have ever done so.” Regional Director’s
Decision at 35.16 Nor would they have much time, even if they
wanted to. The Operator Agreement states that the company
“seek[s] to manage its business so that it can provide sufficient
volume of packages to Contractor to make full use of
Contractor’s equipment.” FedEx Home Delivery Standard
Contractor Operating Agreement, Private Background Statement
(J.A. 720) (emphasis added). The contractor must provide daily
service,17 and “[w]hile the Equipment is in the service of
[FedEx], it shall be used by Contractor exclusively for the
carriage of the goods of [FedEx], and for no other purpose.” Id.
§ 1.4 (J.A. 722).
16
A former manager testified that one former driver, Alan
Douglass, used his truck to deliver lawn mowers for a repair company.
Regional Director’s Decision at 15.
17
It is true that a driver could take on extra work on his weekends
(although none do). But C.C. Eastern did not hold that this would
make him an independent contractor, Slip Op. at 10 n.5 -- no more
than taking on a second, weekend job would turn any full-time
employee into an “entrepreneur.”
22
Based on these facts, the Regional Director found that the
“lack of pursuit of outside business activity appears to
be less a reflection of entrepreneurial choice by the . . .
drivers and more a matter of the obstacles created by
their relationship with [the Company.]” Thus, the
contractors’ contractual right to engage in outside
business falls within the category of “entrepreneurial
opportunities that they cannot realistically take,”
because the contractors’ work schedules prevent them
from taking on additional business during their off-
hours during the workweek.
Regional Director’s Decision at 35 (quoting Roadway III, 326
N.L.R.B. at 851 & n.36). That is at least a fair conclusion, and
consequently one that we may not displace. See United Ins., 390
U.S. at 260.
Another indicator of entrepreneurialism to which my
colleagues point is the fact that operators may hire drivers as
temporary replacements and occasional helpers. I agree that the
“ability to hire ‘others to do the Company’s work’ is no small
thing in evaluating ‘entrepreneurial opportunity.’” Slip Op. at 12
(quoting Corporate Express, 292 F.3d at 780-81). But see
Roadway III, 326 N.L.R.B. at 845 (finding that drivers are
employees notwithstanding that, “without prior approval from
Roadway, [they] may also use helpers or replacement drivers on
their routes”). Once again, however, the record evidence on this
issue was weak. The Regional Director found that “many
contractors who hire substitute drivers use the FedEx Home
‘temp’ drivers,” Regional Director’s Decision at 29, and that the
record did not reveal how often contractors hired outside helpers,
id. at 30. Nor was there any evidence that any operator at the
terminals at issue in this case ever hired a substitute on a full-
time basis.
23
My colleagues also note the fact that FedEx drivers “may
contract to serve multiple routes,” and that if they do so, they
may hire other drivers to handle those routes. Slip Op. at 11.
Although this, too, may indicate entrepreneurial opportunity,
there were only 3 multiple-route drivers operating out of the
Wilmington facilities. Regional Director’s Decision at 28. This
is as compared to a case like Arizona Republic, in which the
Board determined that newspaper carriers were independent
contractors after finding that 363 of them had multiple routes.
Ariz. Republic, 349 N.L.R.B. at 1045 n.6. Moreover, the
Regional Director excluded multiple-route drivers from the
bargaining unit on the ground that they were not employees but
rather statutory supervisors. Regional Director’s Decision at 42-
43.
My colleagues find particularly significant the fact that
drivers have a contractual right to sell their routes, and that this
could provide an opportunity for profit. That theoretical
possibility, however, is tightly constrained. The drivers may sell
only to those buyers whom FedEx accepts as qualified; the
company gives out routes without charge,18 as it did at the two
Wilmington terminals; and FedEx can reconfigure a route, “in its
sole discretion,” at any time. Regional Director’s Decision at 16
(referencing the FedEx Operating Agreement); see id. at 38.
These facts cannot help but limit (or eliminate) any opportunity
for profit. See id. at 60 n.73.
18
There is nothing confused about saying that FedEx gives out
routes without charge when it does not charge anything for routes.
See Slip Op. at 13. Of course the driver agrees to provide delivery
service on the route, and of course FedEx pays compensation for that
service. Id. But the fact that FedEx will give a new driver a route
without charging for it, and can reconfigure any route that a driver
purchases from a former driver, plainly constrains the value of the
latter.
24
In light of these constraints, it is not surprising that, although
there was evidence that drivers abandoned their routes without
selling them, id. at 32, there was little evidence that any driver
had ever materially profited from a sale: “[T]here is no evidence
that any Ballardvale contractor has ever sold a route,” and there
is evidence of only one single-route sale at Jewel Drive. Id. at
31, 38.19 The only evidence of profit on that sale was the
uncorroborated testimony of the former operator that he sold the
route and truck together for at least $3000 more than the truck’s
market value, minus $1000 he paid to the broker. Id. at 31-32.
As the Regional Director noted, the fact that the sale was
“combined with the sale of a truck . . . makes the portion
attributable to the route murky.” Id. at 38. Based on the
operator’s statement alone, he may have netted no more than
$2000 -- without factoring in his expenses over the two years he
had the truck and route. More important, the evidence that there
was any gain at all was “murky” indeed. As the Regional
Director pointed out, although the operator claimed that he had
a bill of sale to support his testimony, and told the hearing officer
that he would produce it, he never did. Id. at 57 n.59. Given that
the burden is on the proponent of independent contractor status
19
The only other sale was by a multiple-route driver. The driver,
Timothy Jung, received about $36,000 for his truck -- for which he
had paid about $35,000 -- together with one of his routes. Jung
abandoned his second route without receiving anything for it.
Regional Director’s Decision at 32, 38. “In these circumstances,” the
Regional Director reasonably found “the evidence of only two route
sales too insubstantial to support a finding of independent contractor
status.” Id. at 38-39.
25
to prove its case,20 it was not unreasonable for the Director to
conclude that FedEx had failed to do so.
C
It would be a mistake, however, to read the court’s opinion
as reflecting nothing more than a factual disagreement with the
NLRB, even on the question of whether the drivers had
entrepreneurial opportunity. There is something more important
at stake here. In concluding that the indicia of entrepreneurial
opportunity were weak, the Regional Director emphasized that
few operators seized any of the opportunities that allegedly were
available to them. Accordingly, she adhered to the NLRB’s
precedent in Roadway III, which involved FedEx Home’s
predecessor corporation, wherein the “Board found that evidence
of a few . . . sales . . . [was] insufficient to support a finding of
independent contractor status, particularly since it was unclear
from the record whether any driver had profited materially from
a sale.” Regional Director’s Decision at 38 (citing 326 N.L.R.B.
at 853).
My colleagues, by contrast, maintain that the failure to
actually exercise theoretical opportunities is “beside the point”
because “‘it is the worker’s retention of the right to engage in
entrepreneurial activity rather than his regular exercise of that
right that is most relevant.’” Slip Op. at 17 (quoting C.C.
Eastern, 60 F.3d at 860). But the proper emphasis in that
quotation from our C.C. Eastern opinion is on the word
20
See Argix Direct, 343 N.L.R.B. at 1020; BKN, Inc., 333
N.L.R.B. 143, 144 (2001); Cent. Transport, Inc., 247 N.L.R.B. 1482,
1483 n.1 (1980); see also NLRB v. Ky. River Cmty. Care, Inc., 532
U.S. 706, 710-12 (2001) (affirming the Board’s rule that the burden of
proof is on the party claiming that a worker is a supervisor rather than
an employee).
26
“regular.” It may not be necessary for workers to regularly
exercise their right to engage in entrepreneurial activity for that
factor to weigh in the balance, but “if a company offers its
workers entrepreneurial opportunities that they cannot
realistically take, then that does not add any weight to the
Company’s claim that the workers are independent contractors.”
C.C. Eastern, 60 F.3d at 860.
Quoting C.C. Eastern and citing Arizona Republic, my
colleagues suggest that “even ‘one instance’ of a driver using
such an opportunity can be sufficient to ‘show[] there is no
unwritten rule or invisible barrier preventing other drivers from
likewise exercising their contractual right.’” Slip Op. at 17. But
all C.C. Eastern held was that under those circumstances, the
Board had erred in “discount[ing] to zero” the significance of
that single factor in the traditional multi-factor test. C.C.
Eastern, 60 F.3d at 860. Nor is there anything in Arizona
Republic to suggest that the Board believes that the exercise of
contractual opportunity by one or even a small number of drivers
can be sufficient. In that case, “[m]any carriers h[e]ld other
jobs,” “40 percent of the carriers actually solicited new
subscriptions,” and 363 carriers -- roughly 29 percent of all
carriers -- had multiple routes. 349 N.L.R.B. at 1045; id. at 1045
n.6. It was in this context, in which “many” carriers held other
jobs, solicited business, and had multiple routes -- and hence had
proven opportunity -- that the Board said “the fact that many
[other] carriers choose not to take advantage of this opportunity
to increase their income does not mean that they do not have the
entrepreneurial potential to do so.” Id. at 1045; compare Slip
Op. at 9. In the instant case, by contrast, no FedEx driver has
another job or solicits business from his delivery customers,21
21
The closest FedEx comes to contending that any driver has
solicited business -- and it is not very close -- is its contention that one
driver “asked the retailer L.L. Bean to ship him some catalogs to
27
and only three have multiple routes. Regional Director’s
Decision at 7, 28.
The import of my colleagues’ suggestion that one or even a
few examples of the exercise of contractual rights can be enough
to decide the entrepreneurialism factor is magnified by their view
that this factor is not just one element in a multi-factor test, but
rather the test’s “emphasis” -- so that an insubstantial exercise
may, in effect, tilt the entire outcome.22 That was certainly not
the role that entrepreneurialism played in C.C. Eastern, in which
we held that, although indicia of entrepreneurial opportunity did
“have some probative weight,” they were “less important to our
determination of the drivers’ status than . . . the absence of
evidence that the Company supervises the means and manner of
their work.” 60 F.3d at 859; see id. at 860. Nor has it played
that role in any other case.
It is not unreasonable for the NLRB to take the position that
a material number of workers must actually take advantage of an
opportunity before it will conclude that the opportunity is
significant and realistic rather than insubstantial and theoretical.
See Regional Director’s Decision at 39. Even if that is not the
better rule, “the least that can be said for the Board’s decision is
that it made a choice between two fairly conflicting views, and
distribute to his customers to generate more L.L. Bean deliveries.”
Regional Director’s Decision at 53 n.33.
22
The significance of designating entrepreneurialism as the
emphasis of the test is not diminished by saying that it is a “principle
by which to evaluate [the other common-law factors] in cases where
some factors cut one way and some the other.” Slip Op. at 7. This is
particularly true because the opinion elevates no other principle to that
role. Cases in which factors cut in different directions are the only
cases at issue, as no determinative principle is required when all the
factors point in the same direction.
28
under these circumstances the Court of Appeals should have
enforced the Board’s order.” United Ins., 390 U.S. at 260.
III
But there is a rub. Perhaps recognizing the thinness of the
record, FedEx attempted to improve its proof of entrepreneurial
opportunity by proffering “system-wide evidence concerning the
number of route sales and the amount of profit, if any, on any
such sale.” Order, FedEx Home Delivery, N.L.R.B. Case Nos.
1-RC-22034, 22035 (Nov. 8, 2006) (Battista, Chrmn.,
dissenting). The Regional Director, however, “refus[ed] to
permit the Employer to introduce” this evidence. Id. In light of
that refusal, the Chairman of the NLRB dissented from the denial
of Board review, protesting that this “evidence may be relevant
to the issue of whether the drivers have an entrepreneurial
interest in their position.” Id.
The Chairman was correct. Regardless of whether one
regards entrepreneurial opportunity as only one factor or as the
decisive factor in determining whether the drivers were
independent contractors, FedEx surely had the right to introduce
the evidence necessary to make its case. See 29 C.F.R.
§ 102.64(a) (“It shall be the duty of the hearing officer to inquire
fully into all matters and issues necessary to obtain a full and
complete record . . . .”); cf. Drukker Commc’ns, Inc. v. NLRB,
700 F.2d 727, 733 (D.C. Cir. 1983) (“It is repugnant to notions
of fairness for the government to seek sanctions for alleged
wrongdoing while withholding from the proceeding evidence
that would demonstrate innocence.”).
In support of her ruling, the Regional Director said only that
“evidence of route sales and entrepreneurial activity at other
terminals had no bearing on the economic value of route sales”
at the Wilmington facilities. Regional Director’s Decision at 6.
29
Why that would be so, she did not say. Perhaps there is
something special about the Wilmington facilities, especially as
compared to others that are far away. But the Director did not
identify what the idiosyncracy might be, or say why at least
evidence regarding nearby terminals would not be relevant. See
Burns Elec. Sec. Servs., Inc. v. NLRB, 624 F.2d 403, 409 (2d Cir.
1980) (citing 29 C.F.R. § 102.64 in holding that the hearing
officer erred in excluding evidence regarding the functions of
certain workers at a nearby facility not within the proposed unit).
The exclusion of FedEx’s evidence appears particularly
arbitrary because the Regional Director did consider other
evidence regarding some terminals not at issue in this case. See
Regional Director’s Decision at 4-5. So did the Board in
Roadway III, where it relied on nationwide data to conclude that
drivers were not independent contractors. See 326 N.L.R.B. at
851 (noting that “only 3 out of Roadway’s 5000 drivers
nationwide” had “used their vehicles for other commercial
purposes”); id. at 853 (“In a system of over 5000 drivers
assigned to over 300 terminals, we find that these few forced
sales, given their circumstances, are insufficient to support a
finding of independent contractor status.”). And so, too, did a
different Regional Director in RPS, Inc. See Decision and Order,
N.L.R.B. Case No. 5-RC-14905 (Region 5, Aug. 3, 2000). That
Regional Director relied on systemwide data to conclude that an
employer’s drivers were independent contractors. Although no
driver at the only facility at issue in that case used his vehicle for
commercial purposes unrelated to RPS’s business, the Director
found persuasive the fact that systemwide “many RPS
drivers/contractors, possibly half” did so. Id. at 56. That record,
the Director said, made it “clear that drivers/contractors can
realistically take advantage of a myriad of entrepreneurial
activities.” Id. at 57.
30
In sum, the Regional Director’s failure to reasonably explain
her refusal to permit FedEx to prove its case requires that we
grant the petition for review and remand the case.
IV
My colleagues conclude that, “[b]ecause the indicia favoring
a finding [that] the contractors are employees are clearly
outweighed by evidence of entrepreneurial opportunity, the
Board cannot be said to have made a choice between two fairly
conflicting views.” Slip Op. at 20. They reach this conclusion
by giving the entrepreneurial opportunity factor a weight, and
analyzing it in a way, that the common law of agency -- as
construed by the courts and the NLRB -- does not. Although the
indeterminate nature of the common-law test may be
problematic, and although the Board may have some room to
modify it, this court cannot. Because the Board’s decision
reflects a “choice between two fairly conflicting views,” we
cannot displace it. United Ins., 390 U.S. at 260.
We can and should, however, reject the Board’s unexplained
refusal to give FedEx a fair opportunity to make its case under
the appropriate test. Accordingly, I would remand the case for
further proceedings.