Wednesday, April 22, 2009

New "Entrepreneurial Opportunity" Test for Independent Contractor Status?

NLRB The D.C. Circuit yesterday overruled the Board in a case, holding that home delivery drivers for FedEx were independent contractors, not employees.  The court's 2-1 decision in Fed Ex Home Delivery v. NLRB illustrated the complexity of the employee/independent contractor question that most readers are only too well aware of.  What is particularly interesting about this case, however, was that the D.C. Circuit seems to be making a very strong push to alter the traditional Darden right-to-control test.  Under the D.C. Circuit's reasoning, we may have to call it instead the "Entrepreneurial Opportunity" test.  Although still taking into account the myriad of common-law Darden factors, the court put entrepreneurial opportunity above all.

I'm no fan of the right-to-control test, particularly given that it often betrays its roots as a vicarious liability analysis, rather than a test for employee or independent contractor.  Pushing entrepreneurial opportunity is obviously one way around some of the problems with focusing on the right to control.  That said, the D.C. Circuit's application of its test here--in particular, its reliance on potential entrepreneurial opportunity rather than actual opportunity--is troubling.  If this test gets more legs, we're going to see a lot more corporate policies ostensibly allowing for entrepreneurial opportunity, even where such opportunity is virtually non-existent in reality.

-JH

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» D.C. Circuit Issues Major Decision Defining Employee Status Under NLRA from Adjunct Law Prof Blog
FedEx Home Delivery v. NLRB, ___F. 3d ___(D.C. Cir. April 21,2009), is an exceedingly important case. In a 50 page decision, a divided court held that FedEx drivers were independent contractors under the NLRA and thus the court vacated the... [Read More]

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Comments

It is curious that the D.C. Circuit is modifying the right to control test in the context of an NLRB case. In Insurance Agents, the Supreme Court clearly held that the right to control test was applicable in NLRB proceedings. That is why the majority went to great pains to state that it was not adopting a new test.
That is where the majority and the dissent parted ways. The lengthly dissent felt that this case was controlled by the traditional right to control test under Insurance Agents.

Posted by: Mitchell Rubinstein | Apr 22, 2009 8:26:08 PM

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