Deciding who is an independent contractor and who is an employee is tricky business and leaves companies vulnerable not only to Department of Labor investigations, but also to NLRB investigations. Recently, the NLRB revisited the issue of FedEx drivers and found that they are employees for organizing purposes. The drivers sought to organize a union and FedEx refused to recognize or bargain with the union.
This issue was originally reviewed by the NLRB in 2006, where it ruled that drivers were statutory employees and directed FedEx to bargain. Nonetheless, FedEx refused and a complaint was issued by general counsel. The Board revisited the issue due to a 2009 decision by the D.C. Circuit in a similar case finding that FedEx drivers were independent contractors, and again found last week that FedEx drivers are employees for bargaining purposes.
The Board noted that the “great majority of traditional factors” pointed towards employee status, including control over pay rate. A strongly worded dissent said the ruling essentially changed the independent contractor analysis to a test that gives less weight to certain factors and “selectively overemphasizes” the importance of others.
As of now, there is a split in the Federal Circuit Courts over whether FedEx drivers are independent contractors and it appears that this will be an issue for the Supreme Court. Employers should always contact legal counsel when determining independent contractor status.