Essentially, under this precedent-shifting decision, the NLRB will no longer use workers’ entrepreneurship as the “animating principle” of its multifactor worker status test and will instead use this principle as one of the factors analyzed in addition to the common-law factors.

The common-law independent contractor test utilizes a non-exhaustive list of factors, with the primary factor being the extent of control the employer has over its workers. Analysis of the common law factors differentiates workers who are under the company’s control and independent contractors who tend to have more entrepreneurial freedom. Both the FedEx II and SuperShuttle standards use the non-exhaustive list of common-law factors to determine whether a worker is properly classified as an independent contractor; however, the standards differ in their treatment of “entrepreneurial opportunity.”

In FedEx II (2014), the Board held that independent contractor considerations must be guided by the non-exhaustive common-law factors and “all incidents of the [employee and employer relationship] must be assessed and weighed with no one factor being decisive.”In addition to the common-law factors, the Board was clear that it would consider actual rather than theoretical entrepreneurial opportunity by examining whether putative contractors are actually rendering services as part of an independent business. The Board in Supershuttle (2019)disagreed and held that entrepreneurial opportunity should be the “animating principle” used to evaluate each factor.

In finding the Atlanta Opera makeup artists, hairstylists, and wig stylists to be employees covered by and entitled to protections under the Act—and not independent contractors—the Board returns to the 2014 FedEx II standard by which the Board assesses the common law factors with no one single factor being decisive. The Board expressly rejected SuperShuttle’s holding that entrepreneurial opportunity should be an “animating principle” in the independent-contractor test. In Atlanta Opera, the Board reiterated that entrepreneurial opportunity should be evaluated by assessing whether the putative independent contractor is actually performing services as an independent business.

Because of exposure to claims of employee misclassification and unionization, employers should closely evaluate worker classification, making any necessary adjustments to ensure compliance with the FedEx II standard.

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