In a recent decision, in Atlanta Opera Inc., the National Labor Relations Board (NLRB) returned to the 2014 FedEx Home Delivery (FedEx II) standard for determining independent contractor status under the National Labor Relations Act (NLRA).
This decision overturns the SuperShuttle ruling from 2019 and establishes that makeup artists, wig artists, and hairstylists working at the Atlanta Opera are considered covered employees, rather than independent contractors.
The Board’s decision reinforces the use of common law factors in determining employment status and rejects the notion that entrepreneurial opportunity should be the sole determining factor.
The Reinstatement of the FedEx II Standard
The NLRB’s decision in Atlanta Opera Inc. marks a return to the FedEx II standard, which was first established in 2014. This standard utilizes a set of common law factors to determine whether a worker should be classified as an independent contractor or an employee under the NLRA. The Board reaffirmed that these common law principles align with the Supreme Court’s guidance on employee status considerations.
Rejection of SuperShuttle Standard
The SuperShuttle decision in 2019 introduced the concept of “entrepreneurial opportunity” as the primary determinant of independent contractor status.
This standard placed significant emphasis on whether the worker had the ability to pursue economic gains or suffer losses based on their entrepreneurial endeavors.
The Board, in Atlanta Opera Inc., however, explicitly rejected this standard, asserting that entrepreneurial opportunity should be considered alongside the traditional common law factors rather than serving as the guiding principle on its own.
The Role of Common-Law Factors
The NLRB’s decision emphasizes the importance of the traditional common law factors in determining employment status. These factors include control over work, method of payment, opportunity for profit or loss, investment in facilities and equipment, skill required, permanence of the relationship, and integration of the worker’s services into the employer’s business.
Application of the FedEx II Standard to Atlanta Opera
In Atlanta Opera Inc., the NLRB applied the FedEx II standard to the makeup artists, wig artists, and hairstylists employed by the Atlanta Opera. After reviewing the facts and considering the common law factors, the Board concluded that the majority of these factors pointed toward employee status.
Furthermore, the evidence did not demonstrate that the stylists operated their own independent businesses, supporting the determination that they were covered employees.
Significance of the Decision
The NLRB’s decision in Atlanta Opera Inc. has significant implications for workers seeking union representation and exercising their rights under the NLRA. By reaffirming the FedEx II standard and rejecting the SuperShuttle standard, the Board has decided that these workers are not unjustly excluded from the protections afforded by the NLRA.
Gig workers and workers seeking to organize stand to benefit the most from this return to the older independent contractor standard. With cities beginning to impose a mandated minimum wage for delivery workers, many gig workers may soon receive the wages while enjoying the protections of employees. The change will also open the door for gig workers to organize and participate in union activity.
Should you have any questions about your employment situation, contact the employment attorneys at Potomac Legal Group.