Fedex Home Delivery v. National Labor Relations Board

563 F.3d 492, 385 U.S. App. D.C. 283, 186 L.R.R.M. (BNA) 2292, 2009 U.S. App. LEXIS 8272
CourtCourt of Appeals for the D.C. Circuit
DecidedApril 21, 2009
Docket07-1391, 07-1436
StatusPublished
Cited by27 cases

This text of 563 F.3d 492 (Fedex Home Delivery v. National Labor Relations Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fedex Home Delivery v. National Labor Relations Board, 563 F.3d 492, 385 U.S. App. D.C. 283, 186 L.R.R.M. (BNA) 2292, 2009 U.S. App. LEXIS 8272 (D.C. Cir. 2009).

Opinions

Opinion for the Court filed by Circuit Judge BROWN.

Opinion dissenting in part filed by Cii'cuit Judge GARLAND.

BROWN, Circuit Judge:

FedEx Ground Package System, Inc. (“FedEx”), a company that provides small package delivery throughout the country, seeks review of the determination of the National Labor Relations Board (“Board”) that FedEx committed an unfair labor practice by refusing to bargain with the union certified as the collective bargaining representative of its Wilmington, Massachusetts drivers. The Board cross-applies for enforcement of its order. Because the drivers are independent contractors and not employees, we grant FedEx’s petition, vacate the order, and deny the cross-application for enforcement

I.

In 1998, FedEx acquired Roadway Package Systems and changed its name to FedEx Ground Package System, Inc. The company has two operating divisions: the Ground Division and the Home Delivery Division or FedEx Home. The Ground Division delivers packages of up to 150 pounds, principally to and from business customers. FedEx Home delivers packages of up to 75 pounds, mostly to residential customers. The Wilmington terminals are part of FedEx Home, a network that operates 300 stand-alone terminals throughout the United States and shares space in an additional 200 Ground Division facilities. FedEx Home has independent contractor agreements with about 4,000 contractors nationwide with responsibility for over 5,000 routes.

In July 2006, the International Brotherhood of Teamsters, Local Union 25, filed two petitions with the NLRB seeking representation elections at the Jewel Drive and Ballardvale Street terminals in Wilmington, neither of which boasts many contractors. The Union won the elections, prevailing by a vote of 14 to 6 at Jewel Drive and 10 to 2 at Ballardvale Street, and was certified as the collective bargaining representative at both. FedEx refused to bargain with the Union. The company did not contest the vote count; instead, FedEx disputed the preliminary finding that its single-route drivers are “employees” within the meaning of Section 2(3) of the National Labor Relations Act, 29 U.S.C. § 152(3).

The Board rejected FedEx’s Request for Review of the Regional Director’s Decision and Direction of Election on November 8, 2006. In dissent, Chairman Battista disagreed with “the refusal to permit [FedEx] to introduce system-wide evidence concerning the number of route sales and the amount of profit,” as the information would be relevant to the determination of the drivers’ “entrepreneurial interest in their position.” FedEx Home Delivery and Local 25, N.L.R.B. Case Nos. 1-RC-22034, 22035, (Nov. 8, 2006) (Battista, C., dissenting). After the election, the Board found FedEx violated Sections 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) and (5), by refusing to bargain. Finding FedEx’s objection that its contractors are not employees had been raised and rejected in the representation proceedings, the Board issued its order on September 28, 2007. FedEx filed a timely petition for review and the Board filed its cross-application for enforcement. The Union intervened in support of the Board’s cross-application.

II.

To determine whether a worker should be classified as an employee or an [496]*496independent contractor, the Board and this court apply the common-law agency test, a requirement that reflects clear congressional will. See NLRB v. United Ins. Co., 390 U.S. 254, 256, 88 S.Ct. 988, 19 L.Ed.2d 1083 (1968); see also St. Joseph News Press, 345 N.L.R.B. 474, 478 (2005) (“Supreme Court precedent ‘teaches us not only that the common law of agency is the standard to measure employee status but also that we have no authority to change it.’ ”) (quoting Dial-A-Mattress Operating Corp., 326 N.L.R.B. 884, 894 (1998)). While this seems simple enough, the Restatement’s non-exhaustive ten-factor test is not especially amenable to any sort of bright-line rule,1 a long-recognized rub.2 Thus, “there is no shorthand formula or magic phrase that can be applied to find the answer, but all of the incidents of the relationship must be assessed and weighed with no one factor being decisive,” United Ins. Co., 390 U.S. at 258, 88 S.Ct. 988, always bearing in mind the “legal distinction between ‘employees’ ... and ‘independent contractors’ ... is permeated at the fringes by conclusions drawn from the factual setting of the particular industrial dispute.” North Am. Van Lines, Inc. v. NLRB, 869 F.2d 596, 599 (D.C.Cir.1989) (“NAVL ”).

This potential uncertainty is particularly problematic because the line between worker and independent contractor is jurisdictional — the Board has no authority whatsoever over independent contractors. See id. at 598. Consequently, it is “one of this court’s principal functions” to “ensur[e] that the Board exercises power only within the channels intended by Congress,” especially as determining status from undisputed facts “involves no special administrative expertise that a court does not possess.” Id. We thus do not grant great or even “normal[ ]” deference to the Board’s status determinations; instead, we will only uphold the Board if at least “it can be said to have ‘made a choice between two fairly conflicting views.’” C.C. Eastern, Inc. v. NLRB, 60 F.3d 855, 858 (D.C.Cir.1995) (quoting NAVL, 869 F.2d at 599).

For a time, when applying this common law test, we spoke in terms of an employer’s right to exercise control, making the extent of actual supervision of the means and manner of the worker’s performance a key consideration in the totality of the circumstances assessment. Though all the common law factors were considered, the meta-question, as it were, focused on the sorts of controls employers could use without transforming a contractor into an employee. E.g., NAVL, 869 F.2d at 599 (“In applying traditional agency law principles, the NLRB and the courts have adopted a right-to-control test. The test requires an evaluation of all the circumstances, but the extent of the actual supervision exercised ... is the most important element.”). For example, “efforts to monitor, evaluate, and [497]*497improve” a worker’s performance were deemed compatible with independent contractor status. Id. Nor would “restrictions” resulting from “government regulation” mandate a contrary conclusion. Id. “[EJvidence of unequal bargaining power” also did not establish “control.” Id.

Gradually, however, a verbal formulation emerged that sought to identify the essential quantum of independence that separates a contractor from an employee, a process reflected in cases like C.C. Eastern and NAVL where we used words like control but struggled to articulate exactly what we meant by them. “Control,” for instance, did not mean all kinds of controls, but only certain kinds. See, e.g., C.C. Eastern, 60 F.3d at 858 (quoting

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563 F.3d 492, 385 U.S. App. D.C. 283, 186 L.R.R.M. (BNA) 2292, 2009 U.S. App. LEXIS 8272, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fedex-home-delivery-v-national-labor-relations-board-cadc-2009.