NLRB Returns to Earlier, Tougher Independent Contractor Test

Author: Robert S. Teachout, Brightmine Legal Editor

June 13, 2023

The National Labor Relations Board (NLRB) today abandoned its business-friendly Super Shuttle standard for determining if a worker is an independent contractor or an employee under the National Labor Relations Act (NLRA). In its place, the Board restored the more worker-friendly FedEx Home Delivery (FedEx II) test established by the Obama-era NLRB in 2014.

Hairstylists and makeup artists working at the Atlanta Opera are employees and not independent contractors, the NLRB held in a closely watched case involving the standard for determining independent contractor status under the NLRA. The ruling in Atlanta Opera involves a group of hair and makeup artists who petitioned in 2021 for union representation by the International Alliance of Theatrical Stage Employees.

However, the Atlanta Opera opposed the election, arguing that the workers were independent contractors and therefore did not have rights under the NLRA. The NLRB granted an election but impounded the ballots afterwards while the Board worked through the case. On March 23, the ballots were unsealed and counted, showing that the workers had voted unanimously to join the union. However, the result depended on today's NLRB ruling, which now recognizes the employees' union status.

The independent contractor test established by the Super Shuttle decision emphasized the importance of "entrepreneurial opportunity" among the various common law factors the NLRB considered in determining if a worker was actually an independent contractor or an employee.

Under the reinstated FedEx II standard, the Board will give weight only to "actual, not merely theoretical, entrepreneurial opportunity" and ask whether "the evidence tends to show that a putative independent contractor is, in fact, rendering services as part of an independent business."

Although he agreed with the other Board members' finding that the opera workers are employees and not independent contractors, Member Marvin Kaplan argued against overturning the Super Shuttle standard. Kaplan is the sole Republican member and was a member of the Board that issued the Super Shuttle decision.

Kaplan noted that courts have consistently recognized that entrepreneurial opportunity, as expressed in Super Shuttle, is an important consideration in evaluating the traditional common law factors, noting that the decision "provides the most effective measure for determining the important issue of whether individuals should be considered employees, in which case they fall within the jurisdiction of the [NLRA], or independent contractors, in which case they do not."

The decision comes as the US Department of Labor is expected to issue a final rule on determining independent contractor status under the Fair Labor Standards Act (FLSA) in October.