Fedex Home Delivery v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 7, 2008 Decided April 21, 2009

No. 07-1391

FEDEX HOME DELIVERY, A SEPARATE OPERATING DIVISION

OF FEDEX GROUND PACKAGE SYSTEM, INCORPORATED,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL NO.

25,

INTERVENOR

Consolidated with 07-1436

On Petition for Review and Cross-Application for

Enforcement of an Order of the National Labor

Relations Board

R. Ted Cruz argued the cause for petitioner. On the briefs

were Charles I. Cohen, Jonathan C. Fritts, and Doreen S.

Davis.

2

Robert Digges Jr., Robin S. Conrad, and Adam C. Sloane

were on the brief for amici curiae American Trucking

Associations, Inc. and Chamber of Commerce of the United

States of America in support of petitioner. Timothy W.

Wiseman entered an appearance.

Kellie J. Isbell, Attorney, National Labor Relations

Board, argued the cause for respondent. With her on the brief

were Ronald E. Meisburg, General Counsel, John H.

Ferguson, Associate General Counsel, Linda Dreeben,

Deputy Associate General Counsel, and Robert J. Englehart,

Supervisory Attorney. Julie B. Broido, Supervisory Attorney,

entered an appearance.

Renee J. Bushey argued the cause for intervenor

International Brotherhood of Teamsters, Local No. 25. With

her on the brief were Michael A. Feinberg and Jonathan M.

Conti.

Daniel J. Popeo and Richard A. Samp were on the brief

for amici curiae Washington Legal Foundation, et al. in

support of respondent.

Before: GARLAND and BROWN, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge BROWN.

Opinion dissenting in part filed by Circuit 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

3

(“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).

4

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 independent 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 (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

5

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, 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

1

The common law factors include, inter alia, “the extent of control

which, by the agreement, the master may exercise over the details

of the work”; “the kind of occupation”; whether the worker

“supplies the instrumentalities, tools, and the place of work”; “the

method of payment, whether by the time or by the job”; “the length

of time for which the person is employed”; whether “the work is a

part of the regular business of the employer”; and the intent of the

parties. RESTATEMENT (SECOND) OF AGENCY § 220(2).

2

See Kisner v. Jackson, 159 Miss. 424, 427–28 (1931) (“There

have been many attempts to define precisely what is meant by the

term ‘independent contractor’; but the variations in the wording of

these attempts have resulted only in establishing the proposition

that it is not possible within the limitations of language to lay down

a concise definition that will furnish any universal formula,

covering all cases. At last, and in any given case, it gets back to the

original proposition whether in fact the contractor was actually

independent.”).

6

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 improve” a worker’s

performance were deemed compatible with independent

contractor status. Id. Nor would “restrictions” resulting from

“government regulation” mandate a contrary conclusion. Id.

“[E]vidence 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

7

F.3d at 858 (quoting NAVL, 869 F.2d at 599). Even though

we were sufficiently confident in our judgment that we

reversed the Board, long portions of both opinions were

dedicated to explaining why some controls were more equal

than others. See id. at 858–61; NAVL, 869 F.2d at 599–604.

In other words, “control” was close to what we were trying to

capture, but it wasn’t a perfect concurrence. It was as if the

sheet music just didn’t quite match the tune.

In any event, the process that seems implicit in those

cases became explicit—indeed, as explicit as words can be—

in Corporate Express Delivery Systems v. NLRB, 292 F.3d

777 (D.C. Cir. 2002). In that case, both this court and the

Board, while retaining all of the common law factors,

“shift[ed the] emphasis” away from the unwieldy control

inquiry in favor of a more accurate proxy: whether the

“putative independent contractors have ‘significant

entrepreneurial opportunity for gain or loss.’” Id. at 780

(quoting Corp. Express Delivery Sys., 332 N.L.R.B. No. 144,

at 6 (Dec. 19, 2000)). This subtle refinement was done at the

Board’s urging in light of a comment to the Restatement that

explains a “‘full-time cook is regarded as a servant,’”—and

not “an independent contractor”—“‘although it is understood

that the employer will exercise no control over the cooking.’”

Id. (quoting RESTATEMENT (SECOND) OF AGENCY § 220(1)

cmt. d). Thus, while all the considerations at common law

remain in play, an important animating principle by which to

evaluate those factors in cases where some factors cut one

way and some the other is whether the position presents the

opportunities and risks inherent in entrepreneurialism. Id.3

3

The common law test, after all, is not merely quantitative. We do

not just count the factors that favor one camp, and those the other,

and declare that whichever side scores the most points wins.

Instead, there also is a qualitative assessment to evaluate which

factors are determinative in a particular case, and why. In

8

Although using this “emphasis” does not make applying

the test purely mechanical, the line drawing is easier, or at

least this court and the Board in Corporate Express seem to

have so hoped. See id. (“We agree with the Board’s

suggestion that [entrepreneurial opportunity] better captures

the distinction between an employee and an independent

contractor.”). In C.C. Eastern, for instance, we decided

drivers for a cartage company who owned their own tractors,

signed an independent contractor agreement, “retain[ed] the

rights, as independent entrepreneurs, to hire their own

employees” and could “use their tractors during non-business

hours,” and who were “paid by the job” and received no

employee benefits, should be characterized as independent

contractors. 60 F.3d at 858–59. We also noted the company

did not require “specific work hours” or dress codes, nor did it

subject workers to conventional employee discipline. Id. at

858. Conversely, in Corporate Express, emphasizing

entrepreneurialism, we straightforwardly concluded that

where the owner-operators “were not permitted to employ

others to do the Company’s work or to use their own vehicles

for other jobs,” they “lacked all entrepreneurial opportunity

and consequently functioned as employees rather than as

independent contractors.” 292 F.3d at 780–81.

This struggle to capture and articulate what is meant by

abstractions like “independence” and “control” also seems to

play a part in the Board’s own cases, though we readily

concede the Board’s language has not been as unambiguous

as this court’s binding statement in Corporate Express. For

Corporate Express, we said this qualitative evaluation “focus[es]

not upon the employer’s control of the means and manner of the

work but instead upon whether the putative independent contractors

have a ‘significant entrepreneurial opportunity for gain or loss.’”

292 F.3d at 780 (quoting Corp. Express, 332 N.L.R.B. at 6).

9

instance, in the latest but far from only statement of the

principle, see St. Joseph News Press, 345 N.L.R.B. at 479;

Dial-A-Mattress Operating Corp., 326 N.L.R.B. at 891; cf.

Panhandle E. Pipe Line Co. v. FERC, 890 F.2d 435, 438–39

(D.C. Cir. 1989) (agency action while review is pending in

this court can be relevant), and a case where the Board

explicitly said it was simply following its own precedent,

Arizona Republic, 349 N.L.R.B. 1040, 1040 (2007), the Board

held that where carriers sign an independent contractor

agreement; own, maintain, and control their own vehicles;

hire full-time substitutes and control the substitutes’ terms and

conditions of employment; are permitted to hold contracts on

multiple routes; select the delivery sequence; and are not

subject to the employer’s progressive discipline system, the

evidence establishes that the carriers are independent

contractors, id. at 1040–41, 1046. Importantly, the Board,

noting many drivers had “multiple routes” and could deliver

newspapers for another publisher, also concluded significant

entrepreneurial opportunity existed, even if most failed to

make the extra effort. “[T]he fact that many carriers choose

not to take advantage of this opportunity to increase their

income does not mean that they do not have the

entrepreneurial potential to do so.” Id. at 1045.

The record here shares many of the same characteristics

of entrepreneurial potential.4 In the underlying representation

decision, the Regional Director found the contractors sign a

4

FedEx also does not provide benefits or withhold taxes. While

unrelated to entrepreneurialism, this goes to party intent. See C.C.

Eastern, 60 F.3d at 858–59; St. Joseph News Press, 345 N.L.R.B. at

479.(“[A] party’s intent with regard to the nature of the relationship

created weighs strongly in favor of finding independent contractor

status.”). Because we consider all the common law factors, vide

supra, these facts are relevant, just as are any relating to control.

10

Standard Contractor Operating Agreement that specifies the

contractor is not an employee of FedEx “for any purpose” and

confirms the “manner and means of reaching mutual business

objectives” is within the contractor’s discretion, and FedEx

“may not prescribe hours of work, whether or when the

contractors take breaks, what routes they follow, or other

details of performance”; “contractors are not subject to

reprimands or other discipline”; contractors must provide

their own vehicles, although the vehicles must be compliant

with government regulations and other safety requirements;

and “contractors are responsible for all the costs associated

with operating and maintaining their vehicles.” FedEx Home

Delivery and Local 25, N.L.R.B. Case Nos. 1-RC-22034,

22035, slip op. at 10–14 (First Region, Sept. 20, 2006)

(“Representation Decision”). They may use the vehicles “for

other commercial or personal purposes . . . so long as they

remove or mask all FedEx Home logos and markings,” and,

even on this limited record, some do use them for personal

uses like moving family members, and in the past “Alan

Douglas[] used his FedEx truck for his ‘Douglas Delivery’

delivery service, in which he delivered items such as lawn

mowers for a repair company.” Id. at 14, 15. Contractors can

independently incorporate, and at least two in Wilmington

have done so. At least one contractor has negotiated with

FedEx for higher fees. Id. at 20.5

5

We recognize FedEx seeks to “make full use of the Contractor’s

equipment,” but it is undisputed the contractors are only obligated

to provide service five days a week. Our precedent speaks to this:

“Moreover, as the drivers work only 40 to 50 hours per week for

the Company, it seems that their schedules do not preclude them

from taking on additional hauling business during their off-hours.”

C.C. Eastern, 60 F.3d at 860. Though our colleague contends C.C.

Eastern does not say very much, see Dis. Op. at 26 (“But all C.C.

Eastern held was that under those circumstances, the Board had

erred in ‘discounting to zero’ the significance of that single factor

11

Tellingly, contractors may contract to serve multiple

routes or hire their own employees for their single routes;

more than twenty-five percent of contractors have hired their

own employees at some point. See Resp’ts Br. at 6. “The

multiple route contractors have sole authority to hire and

dismiss their drivers”; they are responsible for the “drivers’

wages” and “all expenses associated with hiring drivers, such

as the cost of training, physical exams, drug screening,

employment taxes, and work accident insurance.”

Representation Decision, slip op. at 27.6 The drivers’ pay and

benefits, as well as responsibility for fuel costs and the like,

are negotiated “between the contractors and their drivers.” Id.

In addition, “both multiple and single route contractors may

hire drivers” as “temporary” replacements on their own

routes; though they can use FedEx’s “Time Off Program” to

find replacement drivers when they are ill or away, they need

not use this program, and not all do. Id. at 28–29. Thus,

contrary to the dissent’s depiction, Dis. Op. at 19, contractors

in the traditional multi-factor test.”), he fails to account for the

holding. We did not remand for the Board to give this factor the

proper weight, but instead held the contractors “are not ‘employees’

within the meaning of the Act and therefore are not within the

jurisdiction of the Board.” C.C. Eastern, 60 F.3d at 861.

6

We are aware the Regional Director excluded contractors with

multiple routes from the bargaining units as statutory supervisors,

even though the “employees” of those “supervisors” do not, in fact,

work for FedEx. Representation Decision, slip op. at 42–43. This

classification is not before us. But what is before us is the puzzling

argument, adopted but not defended by our colleague, see Dis. Op.

at 23, that because they were excluded, everything about them is

somehow irrelevant, as if—poof!—they just vanished. Multi-route

contractors signed the same contract as the others, and just as the

national data is relevant in assessing the rights available under the

contract, id. at 27–30, so are the activities of these contractors.

12

do not need to show up at work every day (or ever, for that

matter); instead, at their discretion, they can take a day, a

week, a month, or more off, so long as they hire another to be

there. “FedEx [also] is not involved in a contractor’s decision

to hire or terminate a substitute driver, and contractors do not

even have to tell FedEx [] they have hired a replacement

driver, as long as the driver is ‘qualified.’” Representation

Decision, slip op. at 29. “Contractors may also choose to hire

helpers” without notifying FedEx at all; at least six

contractors in Wilmington have done so. Id. at 29–30. This

ability to hire “others to do the Company’s work” is no small

thing in evaluating “entrepreneurial opportunity.” Corp.

Express, 292 F.3d at 780–81; see also St. Joseph News Press,

345 N.L.R.B. at 479 (“Most importantly, the carriers can hire

full-time substitutes . . . .”).

Another aspect of the Operating Agreement is significant,

and is novel under our precedent. Contractors can assign at

law their contractual rights to their routes, without FedEx’s

permission. The logical result is they can sell, trade, give, or

even bequeath their routes, an unusual feature for an

employer-employee relationship. In fact, the amount of

consideration for the sale of a route is negotiated “strictly

between the seller and the buyer,” with no FedEx involvement

at all other than the new route owner must also be “qualified”

under the Operating Agreement, Representation Decision, slip

op. at 30, with “qualified” merely meaning the new owner of

the route also satisfies Department of Transportation (“DOT”)

regulations, see id. at 8–10. Although FedEx assigns routes

without nominal charge, the record contains evidence, as the

Regional Director expressly found, that at least two

contractors were able to sell routes for a profit ranging from

$3,000 to nearly $16,000. See id. at 30–32, 38–39.

13

In its argument to this court, the Board, echoed by the

dissent, discounts this evidence of entrepreneurial opportunity

by saying any so-called profit merely represents the value of

the vehicles, which were sold along with the routes. But if a

vehicle depreciates in value, it is not worth as much as it was

before; that is tautological. Here, buyers paid more for a

vehicle and route than just the depreciated value of the

vehicle—in one instance more than $10,000 more. Therefore,

as the Regional Director did, we find this value is profit.

Compare Representation Decision, slip op. at 38 (“Neal’s

profit on the sale of his route was only $3000 to $6000,” and

“[a]fter deducting the value of the truck . . . it appears that, at

best, Ferreira paid Jung somewhere between $11,000 and

$16,000 for the route.”) with Dis. Op. at 24 (suggesting no

“gain at all” may have been shown). The amount of profit

may be “murky,” as it may be as high as $6,000 and $16,000

or as low as $3,000 or $11,000, respectively, but the profit is

real. Representation Decision, slip op. at 38. That this

potential for profit exists is unsurprising: routes are

geographically defined, and they likely have value dependent

on those geographic specifics which some contractors can

better exploit than others. For example, as people move into

an area, the ability to profit from that migration varies; some

contractors using more efficient methods can continue to

serve the entire route, while others cannot.

It is similarly confused to conclude FedEx gives away

routes for free. See Dis. Op. at 23. A contractor agrees to

provide a service in return for compensation, i.e., both sides

give consideration. If a contractor does not do what she says,

FedEx suffers damages, just as she does if FedEx does not

pay what is owed. Servicing a route is not cheap; one needs a

truck (which the contractor pays for) and a driver (which the

contractor also pays for, either directly or in kind). To say

this is giving away a route is to say when one hires a

14

contractor to build a house, one is just giving away a

construction opportunity. All of this evidence thus supports

finding these contractors to be independent.

The Regional Director, however, thought FedEx’s

business model distinguishable from those where the Board

had concluded the drivers were independent contractors. For

example, FedEx requires: contractors to wear a recognizable

uniform and conform to grooming standards; vehicles of

particular color (white) and within a specific size range; and

vehicles to display FedEx’s logo in a way larger than that

required by DOT regulations. The company insists drivers

complete a driving course (or have a year of commercial

driving experience, which need not be with FedEx) and be

insured, and it “conducts two customer service rides per year”

to audit performance. FedEx provides incentive pay (as well

as fuel reimbursements in limited instances) and vehicle

availability allotments, and requires contractors have a vehicle

and driver available for deliveries Tuesday through Saturday.

Id. at 9–21. Moreover, FedEx can reconfigure routes if a

contractor cannot provide adequate service, though the

contractor has five days to prove otherwise, and is entitled to

monetary compensation for the diminished value of the route.

Id. at 16. These aspects of FedEx’s operation are

distinguishable from the business models in Dial-A-Mattress,

326 N.L.R.B. 884 (contractors arranged their own training,

could decline work, did not wear uniforms, could use any

vehicle, and were provided no subsidies or minimum

compensation) and Argix Direct, Inc., 343 N.L.R.B. 1017

(2004) (contractors could decline work, delivered to major

retailers using any vehicle, and had no guaranteed income).

But those distinctions, though not irrelevant, reflect

differences in the type of service the contractors are providing

rather than differences in the employment relationship. In

15

other words, the distinctions are significant but not sufficient.

FedEx Home’s business model is somewhat unique. The

service is delivering small packages, mostly to residential

customers. Unlike some trucking companies, its drivers are

not delivering goods that FedEx sells or manufacturers, nor

does FedEx move freight for a limited number of large

clients. Instead, it is an intermediary between a diffuse group

of senders and a broadly diverse group of recipients. With

this model comes certain customer demands, including safety.

As the Internal Revenue Service (“IRS”) persuasively notes,

and ordinary experience confirms, a uniform requirement

often at least in part “is intended to ensure customer security

rather than to control the [driver].” INTERNAL REVENUE

SERVICE, EMPLOYMENT TAX GUIDELINES: CLASSIFYING

CERTAIN VAN OPERATORS IN THE MOVING INDUSTRY 23,

http://www.irs.gov/pub/irs-utl/van-ops.pdf (last visited April

3, 2009).7 And once a driver wears FedEx’s logo, FedEx has

an interest in making sure her conduct reflects favorably on

that logo, for instance by her being a safe and insured

driver—which is required by DOT regulations in any event.

See Representation Decision, slip op. at 8–9, 14, 24.

We have held that constraints imposed by customer

demands and government regulations do not determine the

employment relationship. See C.C. Eastern, 60 F.3d at 859

(“[W]here a company’s control over an aspect of the workers’

performance is motivated by a concern for customer service,

that control does not suggest an employment relationship.”);

7

We, of course, are not deferring to the IRS. See Dis. Op. at 15

n.10. Our standard of review here is unusual. Though not de novo,

we must enforce the bounds on the Board’s jurisdiction set by

Congress. NAVL, 869 F.2d at 598. This statement is merely

persuasive authority that is relevant in light of our precedent that

measures springing from customer demands do not create an

employee relationship. C.C. Eastern, 60 F.3d at 859.

16

NAVL, 869 F.2d at 599 (“[E]mployer efforts to monitor,

evaluate, and improve the results of ends of the worker’s

performance do not make the worker an employee.”); id.

(“[R]estrictions upon a worker’s manner and means of

performance that spring from government regulation . . . do

not necessarily support a conclusion of employment status”

because the company “is not controlling the driver,” the law

is.). As our “emphasis [shifts] to entrepreneurialism,” Corp.

Express, 292 F.3d at 780, these precedents apply a fortiori.

Likewise, “an incentive system designed ‘to ensure that

the drivers’ overall performance meets the company

standards’ . . . is fully consistent with an independent

contractor relationship.” C.C. Eastern, 60 F.3d at 860

(quoting NAVL, 869 F.2d at 603). At the same time, a

contractual willingness to share a small part of the risk—for

instance, by providing fuel reimbursements when prices jump

sharply, or by guaranteeing a certain minimum amount of

income for making a vehicle available—does not an employee

make. See Argix Direct, Inc., 343 N.L.R.B. at 1019

(contractors were independent even though the “[e]mployer

also pays the owner-operators a fuel surcharge when the price

of fuel surpasses a preset average”).

The Regional Director also emphasized that these

“contractors perform a function that is a regular and essential

part of FedEx Home’s normal operations, the delivery of

packages,” and that few have seized any of the alleged

entrepreneurial opportunities. Representation Decision, slip

op. at 34, 38. While the essential nature of a worker’s role is

a legitimate consideration, it is not determinative in the face

of more compelling countervailing factors, see Aurora

Packing v. NLRB, 904 F.2d 73, 76 (D.C. Cir. 1990), otherwise

companies like FedEx could never hire delivery drivers who

are independent contractors, a consequence contrary to

17

precedent, see St. Joseph News Press, 345 N.L.R.B. at 479.

And both the Board and this court have found the failure to

take advantage of an opportunity is beside the point. See C.C.

Eastern, 60 F.3d at 860 (opportunities cannot be ignored

unless they are the sort workers “cannot realistically take,”

and even “one instance” of a driver using such an opportunity

can be sufficient to “show[] there is no unwritten rule or

invisible barrier preventing other drivers from likewise

exercising their contractual right”); Arizona Republic, 349

N.L.R.B. at 1045. Instead, “it is the worker’s retention of the

right to engage in entrepreneurial activity rather than his

regular exercise of that right that is most relevant for the

purpose of determining whether he is an independent

contractor.” C.C. Eastern, 60 F.3d at 860.8

III.

Our dissenting colleague reads our precedent differently

than we do, and thus reaches a different conclusion. Of

course the facts in our past holdings are not identical to those

here, but there is no reason to distinguish this case from those

where we have rejected the Board’s attempt to assert

jurisdiction over independent contractors. In fact, this case is

relatively straightforward because not only do these

contractors have the ability to hire others without FedEx’s

participation, only here do they own their routes—as in they

can sell them, trade them, or just plain give them away.

Moreover, if this court had shown as much deference to the

Board as our colleague seems to suggest is its due, we wonder

how C.C. Eastern and NAVL could possibly have been

8

The Regional Director noted too that “FedEx Home offers what is

essentially a take-it-or-leave-it agreement.” But we will “draw no

inference of employment status from merely the economic controls

which many corporations are able to exercise over independent

contractors with whom they contract.” NAVL, 869 F.2d at 599.

18

decided the way that they were. Because the dispute turns on

precedent, we recommend you read our cases—they are quite

short—and see for yourself whether our friend’s fight really is

with us at all.

The dissent, for instance, argues that emphasizing

entrepreneurialism has only truly begun with this case, and

suggests we are doing so here for reasons apart from

allegiance to precedent. See, e.g., Dis. Op. at 11–12, 30. Lest

any be confused, we again quote Corporate Express: “[W]e

uphold as reasonable the Board’s decision, at the urging of the

General Counsel, to focus not upon the employer’s control of

the means and manner of the work but instead upon whether

the putative independent contractors have a ‘significant

entrepreneurial opportunity for gain or loss.’” 292 F.3d at

780. We explicitly “agree[d] with the Board’s suggestion that

the latter factor better captures the distinction between an

employee and an independent contractor,” because, as

reflected by the Restatement’s comment, it is not “the degree

of supervision under which [one] labors but . . . the degree to

which [one] functions as an entrepreneur—that is, takes

economic risk and has the corresponding opportunity to profit

from working smarter, not just harder,” that better illuminates

one’s status. Id. We retained the common law test (as is

required by the Court’s decision in United Insurance), but

merely “shift[ed our] emphasis to entrepreneurialism,” using

this “emphasis” to evaluate common law factors such as

whether the contractor “supplies his own equipment,” id.

Corporate Express is thus doctrinally consistent with United

Insurance and the Restatement.

Likewise, though conceding ours is a “fair reading of

[Corporate Express], which contains considerable language

regarding entrepreneurial opportunity and the benefits of

using such a test,” the dissent nonetheless argues there is a

19

narrower way to understand that case such that it still focuses

on the extent of control. Dis. Op. at 9. Put another way,

Corporate Express—despite its seemingly unambiguous

language—to him need not be read as evincing a shift towards

entrepreneurialism at all. We cannot adopt that reading

because the court affirmatively declined to determine the

contractors’ status under a “means and manner test.” Corp.

Express, 292 F.3d at 780 (“[W]e need not answer that

question . . . .”). We take Corporate Express at its word.

But even if Corporate Express never happened, the result

here is unchanged. While on some points C.C. Eastern and

NAVL are distinguishable—for instance, in C.C. Eastern there

were no appearance requirements for man or machine (though

“the tractor must be suitable for the task at hand”), see 60

F.3d at 859, as in NAVL, 869 F.2d at 600—the overwhelming

majority of factors favoring independent contractor status are

the same, and, importantly, this case is particularly

straightforward because only here can the contractors own

and transfer the proprietary interest in their routes. Moreover,

all contractors here own their vehicles, something that cannot

be said in NAVL, where not even the majority did. See id.

True, these drivers—who need not be, and not always are, the

same persons as the contractors—must wear uniforms and the

like, but a rule based on concern for customer service does not

create an employee relationship. See C.C. Eastern, 60 F.3d at

859. And while in C.C. Eastern “we [were] able to find . . .

only one instance of a driver” using an entrepreneurial

opportunity, that lone “example show[ed] that there [was] no

unwritten rule or invisible barrier preventing other drivers

from likewise exercising their contractual right.” Id. at 860.

In this case, we need not and do not rely on just one example

of the exercise of rights. Even on an incomplete record there

are many such examples; routes have been sold for a profit;

substitutes and helpers have been hired without FedEx’s

20

involvement; one contractor has negotiated for higher rates;

and contractors have incorporated. Under the fairest reading

of our precedent, these are independent contractors.

IV.

We have considered all the common law factors, and, on

balance, are compelled to conclude they favor independent

contractor status. The ability to operate multiple routes, hire

additional drivers (including drivers who substitute for the

contractor) and helpers, and to sell routes without permission,

as well as the parties’ intent expressed in the contract, augurs

strongly in favor of independent contractor status. Because

the indicia favoring a finding the contractors are employees

are clearly outweighed by evidence of entrepreneurial

opportunity, the Board cannot be said to have made a choice

between two fairly conflicting views. Though evidence can

be marshaled and debater’s points scored on both sides, the

evidence supporting independent contractor status is more

compelling under our precedent. The evidence might have

been stronger still had not the Regional Director erroneously

excluded the national data. But even as the record stands, the

Board’s determination was legally erroneous.

Accordingly, we grant the petition, vacate the Board’s

order, and deny the cross-application for enforcement.

So ordered.

GARLAND, Circuit Judge, dissenting in part: In National

Labor Relations Board v. United Insurance Co. of America, the

Supreme Court held that Congress intended “the Board and the

courts” to “apply the common-law agency test . . . in

distinguishing an employee from an independent contractor”

under the National Labor Relations Act (NLRA). 390 U.S. 254,

256 (1968). In this case, the National Labor Relations Board

(NLRB) applied that multi-factor test and concluded that FedEx

Home Delivery’s drivers are the company’s employees. My

colleagues disagree, concluding that the drivers are independent

contractors.

This is not merely a factual dispute. Underlying my

colleagues’ conclusion is their view that the common-law test

has gradually evolved until one factor -- “whether the position

presents the opportunities and risks inherent in

entrepreneurialism” -- has become the focus of the test. Slip Op.

at 7, 18. Moreover, in their view, this factor can be satisfied by

showing a few examples, or even a single instance, of a driver

seizing an entrepreneurial opportunity. Id. at 17.

Although I do not doubt my colleagues’ sincerity, I detect no

such evolution. To the contrary, the Board and the courts have

continued to follow the Supreme Court’s injunction that “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., 390 U.S. at 258. The common-law test may well be

“unwieldy,” Slip Op. at 7, but a court of appeals may not

“‘displace the Board’s choice between two fairly conflicting

views, even though the court would justifiably have made a

different choice had the matter been before it de novo.’” United

Ins., 390 U.S. at 260 (quoting Universal Camera Corp. v. NLRB,

340 U.S. 474, 488 (1951)). While the NLRB may have authority

to alter the focus of the common-law test, see Chevron U.S.A.

Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43,

863-64 (1984), this court does not. Because “the least that can

2

be said for the Board’s decision is that it made a choice between

two fairly conflicting views, . . . the Court of Appeals should

have enforced the Board’s order.” United Ins., 390 U.S. at 260.

Accordingly, on the existing record, I cannot join in condemning

the Board’s determination.

I can and do, however, fault the Board’s refusal to give

FedEx a fair opportunity to make its case under the appropriate

test. As the court correctly notes, the Regional Director refused

to permit FedEx to introduce evidence that may be relevant to

the question of whether its drivers have significant

entrepreneurial opportunities. Regardless of whether one

considers entrepreneurial opportunity as only one factor (as it is

in the common-law test) or as the focus of the test (as my

colleagues believe it to be), FedEx surely had the right to

introduce the evidence necessary to make its case.

I

A

The NLRA makes it “an unfair labor practice for an

employer . . . to refuse to bargain collectively with the

representatives of his employees.” 29 U.S.C. § 158(a)(5).

Section 2(3) of the Act, as amended by the 1947 Labor

Management Relations Act, provides that the term “employee”

“shall not include . . . any individual having the status of an

independent contractor.” 29 U.S.C. § 152(3). In United

Insurance, the Supreme Court held that the “obvious purpose of

this amendment was to have the Board and the courts apply

general agency principles in distinguishing between employees

and independent contractors under the Act. . . . Thus there is no

doubt that we should apply the common-law agency test . . . in

distinguishing an employee from an independent contractor.”

3

United Ins., 390 U.S. at 256.1 The Court recognized that “[t]here

are innumerable situations which arise in the common law where

it is difficult to say whether a particular individual is an

employee or an independent contractor. . . . In such a situation as

this 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. What is important is that the total factual context

is assessed in light of the pertinent common-law agency

principles.” Id. at 258.

The cases under review in United Insurance presented the

question of whether certain agents of an insurance company were

employees or independent contractors. The Supreme Court

determined that

the decisive factors in these cases become the

following: the agents . . . perform functions that are an

essential part of the company’s normal operations; they

need not have any prior training or experience, but are

trained by company supervisory personnel; they do

business in the company’s name with considerable

assistance and guidance from the company and its

managerial personnel and ordinarily sell only the

company’s policies; the “Agent’s Commission Plan”

that contains the terms and conditions under which they

operate is promulgated and changed unilaterally by the

1

See also NLRB v. Town & Country Elec., Inc., 516 U.S. 85, 94

(1995) (noting that “[i]n the past, when Congress has used the term

‘employee’ without defining it, we have concluded that Congress

intended to describe the conventional master-servant relationship as

understood by common-law agency doctrine” (quoting Nationwide

Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992) (quoting Cmty.

for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40 (1989)))).

4

company; the agents account to the company for the

funds they collect under an elaborate and regular

reporting procedure; the agents receive the benefits of

the company’s vacation plan and group insurance and

pension fund; and the agents have a permanent working

arrangement with the company under which they may

continue as long as their performance is satisfactory.

Id. at 258-59. The Court confirmed that the Board had

“examined all of these facts and found that they showed the debit

agents to be employees.” Id. at 260. This finding, the Court

said, “involved the application of law to facts -- what do the facts

establish under the common law of agency: employee or

independent contractor?” Id. Although the Court noted that

such a determination “involved no special administrative

expertise that a court does not possess,” it nonetheless held that,

“‘even as to matters not requiring expertise,’” a court of appeals

may not “‘displace the Board’s choice between two fairly

conflicting views, even though the court would justifiably have

made a different choice had the matter been before it de novo.’”

Id. (quoting Universal Camera Corp., 340 U.S. at 488). As long

as it “can be said for the Board’s decision . . . that it made a

choice between two fairly conflicting views, . . . the Court of

Appeals should . . . enforce[] the Board’s order. It [is] error to

refuse to do so.” Id.

In the succeeding decades, the NLRB has consistently

“[a]ppl[ied] the common-law agency test as interpreted by the

Supreme Court in NLRB v. United Insurance Co.” to determine

whether a worker is an employee or an independent contractor.

Roadway Package Sys., Inc. (Roadway III), 326 N.L.R.B. 842,

843 (1998); id. at 849 (declaring that the Supreme Court’s “cases

teach us not only that the common law of agency is the standard

to measure employee status but also that we have no authority to

5

change it”).2 In so doing, the Board has looked to the

Restatement (Second) of Agency for the factors relevant to

making that determination. See, e.g., cases cited supra note 2.

Those ten (nonexhaustive) factors are set out in the margin.3

Following the injunction of the Supreme Court, the Board has

2

Accord Ariz. Republic, 349 N.L.R.B. 1040, 1042 (2007); St.

Joseph News-Press, 345 N.L.R.B. 474, 477-78 (2005); Argix Direct,

Inc., 343 N.L.R.B. 1017, 1020 & n.13 (2004).

3

The Restatement provides:

In determining whether one acting for another is a servant or an

independent contractor, the following matters of fact, among

others, are considered:

(a) the extent of control which, by the agreement, the master may

exercise over the details of the work;

(b) whether or not the one employed is engaged in a distinct

occupation or business;

(c) the kind of occupation, with reference to whether, in the

locality, the work is usually done under the direction of the

employer or by a specialist without supervision;

(d) the skill required in the particular occupation;

(e) whether the employer or the workman supplies the

instrumentalities, tools, and the place of work for the person

doing the work;

(f) the length of time for which the person is employed;

(g) the method of payment, whether by the time or by the job;

(h) whether or not the work is a part of the regular business of the

employer;

(i) whether or not the parties believe they are creating the relation

of master and servant; and

(j) whether the principal is or is not in business.

RESTATEMENT (SECOND) OF AGENCY § 220(2).

6

continued to reaffirm that “‘all of the incidents of the

relationship must be assessed and weighed with no one factor

being decisive.’” Roadway III, 326 N.L.R.B. at 850 (quoting

United Ins., 390 U.S. at 258); see, e.g., Ariz. Republic, 349

N.L.R.B. at 1042-46; St. Joseph News-Press, 345 N.L.R.B. at

477-78.

This Circuit has likewise recognized that “Congress

intended that traditional agency law principles guide the

determination whether workers are employees . . . or independent

contractors,” N. Am. Van Lines, Inc. v. NLRB (NAVL), 869 F.2d

596, 598 (D.C. Cir. 1989), and has looked to the Restatement

factors for those principles, id. at 599-600. See Local 777,

Democratic Union Org. Comm. v. NLRB (Local 777), 603 F.2d

862, 872-73 (D.C. Cir. 1978); cf. Cmty. for Creative Non-

Violence v. Reid, 490 U.S. 730, 751-52 (1989) (citing both

United Insurance and the Restatement’s “nonexhaustive list of

factors relevant to determining whether a hired party is an

employee” in construing the meaning of the term “employee”

under the Copyright Act of 1976). “[T]he ultimate

determination,” we have said, “requires a broad examination of

all facets of the relationship between [the] company and” the

worker. NAVL, 869 F.2d at 604 (citing United Ins., 390 U.S. at

258); see C.C. Eastern, Inc. v. NLRB, 60 F.3d 855, 858 (D.C.

Cir. 1995). As we further noted in NAVL, “[i]n applying

traditional agency law principles, the NLRB and the courts have

adopted a right-to-control test.” 869 F.2d at 599. That “test

requires an evaluation of all the circumstances,” but it focuses

the greatest attention on those factors indicating “‘the extent of

the actual supervision exercised by a putative employer over the

“means and manner” of the workers’ performance.’” Id.

7

(quoting Local 777, 603 F.2d at 873); see C.C. Eastern, 60 F.3d

at 858 (same).4

B

My colleagues contend that “[g]radually,” both this Court

and the Board shifted away from “the unwieldy control inquiry

in favor of a more accurate proxy: whether the ‘putative

independent contractors have significant entrepreneurial

opportunity for gain or loss.’” Slip Op. at 6-7 (quoting

Corporate Express Delivery Sys. v. NLRB, 292 F.3d 777, 780

(D.C. Cir. 2002)). “[W]hile all the considerations at common

law remain in play,” my colleagues maintain that now the

“emphasis” is on “whether the position presents the opportunities

and risks inherent in entrepreneurialism.” Id. at 7.

The cases, however, do not evidence this gradual evolution

to a test that emphasizes entrepreneurial opportunity. According

to my colleagues, the evolutionary process began “implicit[ly]”

in our decisions in NAVL and C.C. Eastern. Slip Op. at 7. It is

true that those decisions listed entrepreneurial opportunity as a

relevant factor, notwithstanding that it is not expressly

mentioned in either United Insurance or the Restatement (or in

4

See also Seattle Opera v. NLRB, 292 F.3d 757, 765 & n.11 (D.C.

Cir. 2002) (applying the “common law definition” and concluding that

auxiliary choristers are employees because “the Opera possesses the

right to control [them] in the material details of their performance”);

Constr., Bldg. Material, Ice & Coal Drivers v. NLRB, 899 F.2d 1238,

1242 (D.C. Cir. 1990) (noting that “[t]he right to control the ‘means

and manner’ of job performance . . . is the leitmotiv recurrent in the

cases” that consider whether construction truck drivers are employees

or independent contractors).

8

any comment to the Restatement5). But those decisions

explicitly stated that entrepreneurial opportunity was only one of

multiple factors to consider -- and not the most important one.

In C.C. Eastern, for example, we concluded that the

entrepreneurial opportunities afforded by a driver’s “right to hire

. . . his own employees to help him” and to “use his tractor

himself to haul for anyone” had “some probative weight,” but

that they were “less important to our determination of the

drivers’ status than [wa]s the absence of evidence that the

Company supervises the means and manner of their work.” 60

F.3d at 859, 860 (emphasis added).6 Similarly, we said in NAVL

that: “Other factors [than control] weigh in the determination,”

including “the extent to which the worker has assumed

entrepreneurial risk and stands to gain from risks undertaken

. . . . However, these factors are of far less importance than the

central inquiry whether the corporation exercises control over the

manner and means of the details of the worker’s performance;

indeed, these factors are probative only to the extent that they

bear upon and further that inquiry.” 869 F.2d at 599-600

(emphasis added). Nothing in these unambiguous declarations

suggests any kind of “struggle[] to articulate exactly what we

meant” in those cases. Slip Op. at 6. The contention that C.C.

5

Restatement comment (d), to which my colleagues refer, states

only that a “full-time cook is regarded as a servant” -- and not an

independent contractor -- “although it is understood that the employer

will exercise no control over the cooking.” Restatement (Second) of

Agency § 220(1) cmt. d. The comment does not mention

entrepreneurial opportunity, which plays no role in its analysis of the

cook’s status.

6

See also C.C. Eastern, 60 F.3d at 858 (“Whether a worker is an

independent contractor or an employee is a function of the amount of

control that the company has over the way in which the worker

performs his job.”).

9

Eastern and NAVL implicitly signaled the advent of an

evolutionary process, id. at 6-7, is simply incorrect.

My colleagues cite only one case from this (or any) Circuit,

our 2002 opinion in Corporate Express, for the proposition that

entrepreneurial opportunity has “explicit[ly]” become the

emphasis of the independent contractor test. Slip Op. at 7. I do

not dispute that theirs is one fair reading of that opinion, which

contains considerable language regarding entrepreneurial

opportunity and the benefits of using such a test. But Corporate

Express did not purport to overrule Supreme Court, Circuit, and

Board precedent. Indeed, in affirming as reasonable the Board’s

determination that the owner-operator drivers in that case were

not independent contractors, the court not only agreed that they

lacked entrepreneurial opportunity, but also acknowledged that

the Board may have correctly determined that the employer

controlled the way in which they performed their jobs.

Corporate Express, 292 F.3d at 779-80. Hence, Corporate

Express can also be read as merely holding that the Board was

reasonable in determining that entrepreneurial opportunity tipped

the balance in that case -- a logical result given that the court

thought the vector of the other common-law factors somewhat

unclear, see id. at 780 & n.*, while finding that the “owner-

operators lacked all entrepreneurial opportunity,” id. at 780-81

(emphasis added). And when there are two possible readings of

an opinion, only one of which is consistent with earlier

precedent, the appropriate course is to adopt the consistent

reading -- on the presumption that the court followed the

command of stare decisis. Cf. Indep. Cmty. Bankers of Am. v.

Bd. of Governors of the Fed. Reserve Sys., 195 F.3d 28, 34 (D.C.

Cir. 1999) (“In the event of conflicting panel opinions . . . the

10

earlier one controls, as one panel of this court may not overrule

another.” (internal quotation marks and citation omitted)).7

There was certainly nothing in the NLRB’s opinion in

Corporate Express to suggest that entrepreneurial opportunity

had become the focus of the Board’s own analysis. To the

contrary, the Board simply followed its traditional approach of

examining the common-law factors -- including, inter alia, both

entrepreneurial opportunity and employer control. Corporate

Express Delivery Sys., 332 N.L.R.B. 1522, 1522 (2000). After

doing so, it concluded that, “weighing all of the incidents of their

relationship with the Respondent, we find that the owner-

operators are employees and not independent contractors.” Id.

(emphasis added).

My colleagues maintain that the evolution toward an

emphasis on entrepreneurial opportunity “seems to play a part

in the Board’s own cases,” although they “readily concede the

Board’s language has not been . . . unambiguous.” Slip Op. at 8.

The principal NLRB decision upon which they rely is Arizona

Republic, a decision issued after the Regional Director’s decision

in this case. Ariz. Republic, 349 N.L.R.B. 1040 (May 8, 2007).

But Arizona Republic does not support my colleagues’

proposition either. Once again, it is true that one of the factors

weighing in favor of the independent contractor determination in

that case was “entrepreneurial potential.” Id. at 1042. There

simply is no indication, however, that this factor was the

7

I do not suggest that Corporate Express should be read as

“focus[ing] on the extent of control,” Slip Op. at 19, but rather that it

should not be read as giving primacy to entrepreneurial opportunity.

Moreover, to the extent that there has been a shift of emphasis in the

Board’s own cases, it has been toward regarding no single factor as

primary -- whether it be opportunity or control. See St. Joseph News-

Press, 345 N.L.R.B. at 478; Roadway III, 326 N.L.R.B. at 850.

11

“emphasis” of the test Arizona Republic applied. To the

contrary, the Board announced that, “[i]n determining the status

of the [newspaper] carriers in this case, we rely on . . . the

common-law factors.” Id. at 1043. It then proceeded to examine

the Restatement factors individually, id. at 1043-46, repeating its

oft-stated mantra that “this list of factors is not exclusive or

exhaustive, and that, in applying the common-law agency test,

[we] will consider ‘all the incidents of the individual’s

relationship to the employing entity,’” id. at 1042 (quoting

Roadway III, 326 N.L.R.B. at 850). The Board ultimately

concluded that the majority of the factors “weigh[ed] in favor”

of finding that the carriers were independent contractors. Id. at

1043-46. One of those factors was entrepreneurial opportunity;

another was the employer’s lack of control over the carriers. Id.

But the Board gave pride of place to neither one, declaring only

that the common-law factors, “on balance,” yielded the

conclusion that the carriers were independent contractors. Id. at

1043. The same traditional common-law analysis was employed

in both of the other NLRB decisions that my colleagues cite.

Slip Op. at 9.8

Finally, I do not dispute my colleagues’ contention that the

multi-factor analysis of the common law is “not especially

amenable to any sort of bright-line rule.” Slip Op. at 4-5.

Although they acknowledge that an emphasis on entrepreneurial

8

See St. Joseph News-Press, 345 N.L.R.B. at 478 (noting that “the

Board’s analysis . . . [has] recognized, as does Supreme Court law,

that both the right of control and other factors, as set out in the

Restatement, are to be used to evaluate claims that hired individuals

are independent contractors”); Dial-A-Mattress Operating Corp., 326

N.L.R.B. 884, 891 (1998) (declaring that “the list of factors

differentiating ‘employee’ from ‘independent contractor’ status under

the common-law agency test is nonexhaustive, with no one factor

being decisive”).

12

opportunity “does not make applying the test purely

mechanical,” they maintain that “the line drawing is easier”

under that test. Id. at 8. There is no question that the common-

law agency test makes for difficult line drawing. Indeed, the

Supreme Court expressly acknowledged as much when it

announced the test. See United Ins., 390 U.S. at 258 (“There are

innumerable situations which arise in the common law where it

is difficult to say whether a particular individual is an employee

or an independent contractor . . . .”). It may also be true that line

drawing under an entrepreneurial opportunity test would be

easier, although that is hardly assured. After all, while my

colleagues perceive clear entrepreneurial opportunity in this case,

neither the Board nor I see it that way. See infra Part II.

But the comparative practical advantage of one or the other

of these two tests has no bearing on which one we must apply.

Although the NLRB may have authority to alter the test, or at

least to alter its focus, see Chevron, 467 U.S. at 842-43, 863-64,

this court does not. Until the Supreme Court or the Board tells

us differently, we must continue to apply the multi-factor

common-law test as set forth by the Supreme Court and applied

by the Board.

II

In this case, the NLRB’s Regional Director applied the

traditional “common law agency test.” FedEx Home Delivery

and Local 25, N.L.R.B. Case Nos. 1-RC-22034, 22035, slip op.

at 33 (First Region, Sept. 20, 2006) [hereinafter Regional

Director’s Decision]. In so doing, she “consider[ed] all the

incidents of the individual’s relationship with the employing

entity,” id., including both the extent of FedEx’s control over the

drivers and the extent of the drivers’ entrepreneurial

opportunities, id. at 35-36. Although the Regional Director

acknowledged many of the facts cited by my colleagues in

13

support of FedEx’s contention that the contractors are

independent contractors, facts that I do not rehearse here, she

concluded that they were outweighed by other factors supporting

employee status. Id. at 39. Part II.A reviews the bulk of the

factors that the Director found to support employee status. Part

II.B discusses her analysis of the issue of entrepreneurial

opportunity.

A

In a lengthy and considered opinion, the Regional Director

found the following facts to favor a determination that FedEx

Home Delivery’s drivers, whom the company calls

“contractors,” were employees:

[A]ll the FedEx Home contractors perform a function

that is a regular and essential part of FedEx Home’s

normal operations, the delivery of packages. . . . [A]ll

contractors must do business in the name of FedEx

Home[,] . . . wear[] FedEx Home-approved uniforms

and badges, . . . [and] operate vehicles that must meet

FedEx Home specifications and uniformly display the

FedEx Home name, logo, and colors. . . . No prior

delivery training or experience is required, and FedEx

Home will train those with no experience. . . .

. . . [C]ontractors are not permitted to use their

vehicles for other purposes while providing service for

FedEx Home. The contractors have a contractual right

to use their FedEx Home trucks in business activity

outside their relationship with FedEx Home during off-

hours, provided they remove all FedEx Home

markings, but only one former multiple route contractor

. . . and no current contractors at either Wilmington

terminal have ever done so. . . .

14

. . . FedEx Home exercises substantial control over

all the contractors’ performance of their functions.

FedEx Home offers what is essentially a take-it-or-

leave-it agreement. . . . [It] retains the right to

reconfigure the service area unilaterally. All

contractors must furnish a FedEx Home-approved

vehicle and FedEx Home-approved driver daily from

Tuesday through Saturday; they do not have discretion

not to provide delivery service on a given day. While

all contractors control their starting times and take

breaks when they wish, their control over their work

schedule is circumscribed by the requirement that all

packages be delivered on the day of assignment. . . .

. . . FedEx Home provides support to all its

contractors in various ways that are inconsistent with

independent contractor status. . . . FedEx Home

provides extensive support to contractors by offering

the Business Support Package and arranging for the

required insurance, thus providing an array of required

goods and services that would be far more difficult for

contractors to arrange on their own. . . . FedEx Home

also offers to arrange for approved substitute drivers for

its contractors by virtue of the Time Off Program.

FedEx Home provides contractors who maintain

sufficient vehicle maintenance accounts with $100 per

accounting period to help defray repair costs[, and]

requires contractors to permit FedEx Home to pay

certain vehicle-related taxes and fees on their behalf

and to have the payments deducted from their

settlement.

Regional Director’s Decision at 34-37 (internal citations

omitted). Many of these are the kind of facts that United

15

Insurance, the Restatement, and numerous Circuit and Board

decisions confirm are indicative of employee status.9

My colleagues nonetheless reject the import of many of

these facts, arguing that they merely “reflect differences in the

type of service the contractors are providing rather than

differences in the employment relationship.” Slip Op. at 14. In

particular, the court rejects the import of the following

requirements imposed by FedEx: that drivers wear a

recognizable uniform; that vehicles be of a particular color and

size range; that trucks display the FedEx logo in a size larger

than Department of Transportation regulations require; that

drivers complete a driving course if they do not have prior

training; that drivers submit to two customer service rides per

year to audit their performance; and that a truck and driver be

available for deliveries every Tuesday through Saturday. Id.

The courts and the Board,10 however, have repeatedly regarded

the presence or absence of these very factors as important in

9

See, e.g., United Ins., 390 U.S. at 256-58; NAVL, 869 F.2d at

600-04; Local 777, 603 F.2d at 873-81; Argix Direct, 343 N.L.R.B. at

1017-20; Roadway III, 326 N.L.R.B. at 843-48, 851-54;

RESTATEMENT (SECOND) OF AGENCY § 220(2) (1958).

10

It is to the precedents of the Board, and not to those of the

Internal Revenue Service, that we owe deference, as only the former

is charged with enforcing the provisions of the NLRA. Compare Slip

Op. at 15 (citing an IRS guideline to support the proposition that a

uniform requirement does not reflect employer control), with, e.g.,

Roadway III, 326 N.L.R.B. at 851-52 (citing the employer’s

requirement that its drivers wear an “approved uniform” as evidence

that they are employees).

16

determining whether a worker is an employee or independent

contractor.11

One factor that the Regional Director emphasized was that

the drivers “perform a function that is a regular and essential part

of FedEx Home’s normal operations, the delivery of packages”

to homes. Slip Op. at 16. Although my colleagues acknowledge

that “the essential nature of a worker’s role is a legitimate

consideration,” they minimize it as “not determinative.” Id. But

that is true of every factor in the common-law test. See United

Ins., 390 U.S. at 258 (holding that “all of the incidents of the

relationship must be assessed and weighed with no one factor

being decisive”). Moreover, the cases have repeatedly cited this

11

See, e.g., United Ins., 390 U.S. at 258-59 (listing, among other

“decisive factors” of employee status, the fact that the insurance

agents “need not have any prior training or experience, but are trained

by company supervisory personnel,” and that “they do business in the

company’s name”); C.C. Eastern, 60 F.3d at 858 (finding the

following facts, among many others, to be indicative of an

independent contractor relationship: the employer does not “exercise

any control over the drivers’ dress or appearance” or “require the

tractors to be of any specific type, size, or color”); NAVL, 869 F.2d at

600 (citing, among other “principal reasons” why the drivers are

independent contractors, the fact that they “retain nearly absolute

control” over “their dress” and “when they work”); Corporate Express

Delivery Sys., 332 N.L.R.B. at 1522 (finding that owner-operator

drivers are employees because, inter alia, “[t]hey are required to

display the Respondent’s logo on their vehicles and to wear certain

color trousers, shirts, and shoes, if they opt not to wear uniforms”);

Roadway III, 326 N.L.R.B. at 851-52 (citing, among other factors in

concluding that drivers are employees, the facts that: “they need not

have any prior training or experience, but receive training from the

company; they do business in the company’s name”; they wear an

“approved uniform”; and there is a “‘business support package’ [that]

helps ensure that the drivers’ vehicles are properly maintained”).

17

particular factor in concluding that workers are employees.12 In

short, there is no basis for discounting the significance of the

traditional factors upon which the Regional Director relied in

concluding that the FedEx drivers are employees rather than

independent contractors.

B

In accord with court and agency precedent, the Regional

Director also considered whether FedEx Home Delivery’s

drivers have significant entrepreneurial opportunity for gain or

loss. For the following reasons, she concluded that the evidence

of entrepreneurial opportunity was weak:

The contractors’ compensation package also supports

employee status. With [one] exception . . . , FedEx

Home unilaterally establishes the rates of compensation

for all contractors. . . . [T]here is little room for the

contractors to influence their income through their own

efforts or ingenuity, as their terminal manager

determines, for the most part, how many deliveries they

will make each day. . . . A contractor’s territory may be

unilaterally reconfigured by FedEx Home. FedEx

Home tries to insulate its contractors from loss to some

12

See, e.g., United Ins., 390 U.S. at 258-59 (holding that the fact

that the insurance agents “perform functions that are an essential part

of the company’s normal operations” is a “decisive factor[]”); Aurora

Packing Co. v. NLRB, 904 F.2d 73, 76 (D.C. Cir. 1990) (noting that

“whether a worker plays an essential role in a company’s business” is

a factor “presumably because the company more likely than not would

want to exercise control over such important personnel”); Roadway

III, 326 N.L.R.B. at 851 (citing as a factor that the drivers “perform[]

essential functions that allow Roadway to compete in the small

package delivery market”); see also RESTATEMENT (SECOND) OF

AGENCY § 220(2)(h).

18

degree by means of the vehicle availability payment,

which they receive just for showing up, and the

temporary core zone density payment, both of which

payments guarantee contractors an income level

predetermined by FedEx Home, irrespective of the

contractors’ personal initiative. FedEx Home also

shields drivers from loss due to substantial increases in

fuel prices by means of the fuel/mileage settlement.

Regional Director’s Decision at 37.

Notwithstanding these findings, my colleagues perceive

many “characteristics of entrepreneurial potential” in the drivers’

relationship to FedEx. Slip Op. at 9. Some of the characteristics

they cite, however, appear to have little to do with

entrepreneurial opportunity. For example, the court’s opinion

notes that FedEx’s Standard Contractor Operating Agreement

“specifies the contractor is not an employee of FedEx for any

purpose.” Id. at 10. But the label FedEx puts on its relationship

with its workers does not affect whether they have

entrepreneurial opportunity for gain or loss.13

13

See Corporate Express, 292 F.3d at 780 n.* (affirming the

Board’s determination that, although drivers “were described in their

contract as ‘independent contractors,’” they were actually employees).

Nor is there much significance to the fact that FedEx does not

“withhold taxes.” Slip. Op. at 9 n.4. See Seattle Opera, 292 F.3d at

764 n.8 (noting that “‘if an employer could confer independent

contractor [i.e., non-employee] status through the absence of payroll

deductions there would be few employees falling under the protection

of the Act’” (quoting J. Huizinga Cartage Co. v. NLRB, 941 F.2d

616, 620 (7th Cir. 1991)). Compare also Slip Op. at 9 n.4 (noting that

FedEx “does not provide benefits”), with Corporate Express, 292 F.3d

at 780 n.* (finding that drivers were not independent contractors

notwithstanding that they “received no life or health insurance”

benefits from the company).

19

My colleagues also observe that FedEx “may not prescribe

hours of work [or] whether or when the contractors take breaks,”

and that the drivers “are not subject to reprimands or other

discipline,” Slip Op. at 10 -- all of which go not to the workers’

entrepreneurial opportunity but to the extent of the employer’s

control, a factor discussed in Part II.A above. In any event,

although FedEx does not fix specific hours or break times, it

does require its contractors to provide delivery services every

day, Tuesday through Saturday, and to finish each day’s

deliveries by the end of the day. Regional Director’s Decision

at 17, 36.14 The insurance agents in United Insurance had neither

fixed hours nor fixed break times, yet the Supreme Court

affirmed the Board’s determination that they were employees.

See 390 U.S. at 258 (noting that the “agents perform their work

primarily away from the company’s offices and fix their own

hours of work and work days”). And while FedEx does not have

a disciplinary system based on “reprimands,” Slip Op. at 10, it

does deny drivers bonuses if they fail release audits and uses

both counseling and termination as tools to ensure compliance

with work rules. Regional Director’s Decision at 12, 21. Again,

the same was true in United Insurance. See 390 U.S. at 258

(noting that if a complaint against an agent is “well founded, the

manager talks with the agent to set him straight,” “caution[s]”

him, and “[i]f improvement does not follow,” the company may

“fire [him] at any time”).

14

The Regional Director also noted that a driver cannot take a

vacation, or even a day off, when he wants to, without providing a

replacement. See Regional Director’s Decision at 26; id. at 40

(distinguishing other cases in part on the basis that drivers for those

companies were “not required to provide delivery services each day”

and “were free to elect not to accept routes on specific days”). Even

those who participate in FedEx’s Time Off Program must schedule

vacations in advance, and weeks are assigned by seniority. Id. at 25-

26.

20

In addition, my colleagues state that “[a]t least one

contractor has negotiated with FedEx for higher fees.” Slip Op.

at 10. Without agreeing that a worker’s ability to negotiate his

salary takes him out of the category of “employee,” the Regional

Director rightly regarded the only evidence on this point as quite

weak: One former manager testified that one former driver

“once requested some customer service rides to gauge if his core

zone payment was set properly, and the payment was raised as

a result, although [the manager] was not sure by how much.

There is no evidence that any other contractors at the

Wilmington facilities have negotiated a change in their core zone

payment.” Regional Director’s Decision at 20.

Closer to the mark on the issue of entrepreneurial

opportunity is the court’s observation that drivers “are

responsible for all the costs associated with operating and

maintaining their vehicles.” Slip Op. at 10.15 But FedEx does

much to limit the drivers’ risk of loss. As the Regional Director

found, the company “shields drivers from loss due to substantial

increases in fuel prices by means of the fuel/mileage settlement”

and guarantees them a significant amount of income “just for

showing up.” Regional Director’s Decision at 37. My

colleagues maintain that this “contractual willingness to share a

small part of the risk . . . does not an employee make.” Slip Op.

at 16. The NLRB reasonably differs, as to both the magnitude of

the shared risk and its import.

My colleagues further note that, under the Operator

Agreement, drivers “may use the vehicles for other commercial

or personal purposes” when they are not in the service of FedEx,

15

My colleagues also note that “all contractors here own their

vehicles.” Slip Op. at 19. The same was true in Corporate Express,

but we nonetheless found that those drivers had “no real

entrepreneurial opportunities.” 292 F.3d at 780 n.*.

21

“so long as they remove or mask all FedEx Home logos and

markings.” Slip Op. at 10. But do the drivers actually use their

trucks for other purposes? Not so much. Indeed, the most that

can be said is that “some do use them for personal uses like

moving family members,” id., hardly an indicator of a

“‘significant entrepreneurial opportunity for gain or loss,’” id. at

7 (quoting Corporate Express, 292 F.3d at 780). Although the

drivers’ use of their trucks to conduct business independent of

FedEx could well be an indicator of entrepreneurialism, the

Regional Director found that “no current contractors at either

Wilmington terminal have ever done so.” Regional Director’s

Decision at 35.16 Nor would they have much time, even if they

wanted to. The Operator Agreement states that the company

“seek[s] to manage its business so that it can provide sufficient

volume of packages to Contractor to make full use of

Contractor’s equipment.” FedEx Home Delivery Standard

Contractor Operating Agreement, Private Background Statement

(J.A. 720) (emphasis added). The contractor must provide daily

service,17 and “[w]hile the Equipment is in the service of

[FedEx], it shall be used by Contractor exclusively for the

carriage of the goods of [FedEx], and for no other purpose.” Id.

§ 1.4 (J.A. 722).

16

A former manager testified that one former driver, Alan

Douglass, used his truck to deliver lawn mowers for a repair company.

Regional Director’s Decision at 15.

17

It is true that a driver could take on extra work on his weekends

(although none do). But C.C. Eastern did not hold that this would

make him an independent contractor, Slip Op. at 10 n.5 -- no more

than taking on a second, weekend job would turn any full-time

employee into an “entrepreneur.”

22

Based on these facts, the Regional Director found that the

“lack of pursuit of outside business activity appears to

be less a reflection of entrepreneurial choice by the . . .

drivers and more a matter of the obstacles created by

their relationship with [the Company.]” Thus, the

contractors’ contractual right to engage in outside

business falls within the category of “entrepreneurial

opportunities that they cannot realistically take,”

because the contractors’ work schedules prevent them

from taking on additional business during their off-

hours during the workweek.

Regional Director’s Decision at 35 (quoting Roadway III, 326

N.L.R.B. at 851 & n.36). That is at least a fair conclusion, and

consequently one that we may not displace. See United Ins., 390

U.S. at 260.

Another indicator of entrepreneurialism to which my

colleagues point is the fact that operators may hire drivers as

temporary replacements and occasional helpers. I agree that the

“ability to hire ‘others to do the Company’s work’ is no small

thing in evaluating ‘entrepreneurial opportunity.’” Slip Op. at 12

(quoting Corporate Express, 292 F.3d at 780-81). But see

Roadway III, 326 N.L.R.B. at 845 (finding that drivers are

employees notwithstanding that, “without prior approval from

Roadway, [they] may also use helpers or replacement drivers on

their routes”). Once again, however, the record evidence on this

issue was weak. The Regional Director found that “many

contractors who hire substitute drivers use the FedEx Home

‘temp’ drivers,” Regional Director’s Decision at 29, and that the

record did not reveal how often contractors hired outside helpers,

id. at 30. Nor was there any evidence that any operator at the

terminals at issue in this case ever hired a substitute on a full-

time basis.

23

My colleagues also note the fact that FedEx drivers “may

contract to serve multiple routes,” and that if they do so, they

may hire other drivers to handle those routes. Slip Op. at 11.

Although this, too, may indicate entrepreneurial opportunity,

there were only 3 multiple-route drivers operating out of the

Wilmington facilities. Regional Director’s Decision at 28. This

is as compared to a case like Arizona Republic, in which the

Board determined that newspaper carriers were independent

contractors after finding that 363 of them had multiple routes.

Ariz. Republic, 349 N.L.R.B. at 1045 n.6. Moreover, the

Regional Director excluded multiple-route drivers from the

bargaining unit on the ground that they were not employees but

rather statutory supervisors. Regional Director’s Decision at 42-

43.

My colleagues find particularly significant the fact that

drivers have a contractual right to sell their routes, and that this

could provide an opportunity for profit. That theoretical

possibility, however, is tightly constrained. The drivers may sell

only to those buyers whom FedEx accepts as qualified; the

company gives out routes without charge,18 as it did at the two

Wilmington terminals; and FedEx can reconfigure a route, “in its

sole discretion,” at any time. Regional Director’s Decision at 16

(referencing the FedEx Operating Agreement); see id. at 38.

These facts cannot help but limit (or eliminate) any opportunity

for profit. See id. at 60 n.73.

18

There is nothing confused about saying that FedEx gives out

routes without charge when it does not charge anything for routes.

See Slip Op. at 13. Of course the driver agrees to provide delivery

service on the route, and of course FedEx pays compensation for that

service. Id. But the fact that FedEx will give a new driver a route

without charging for it, and can reconfigure any route that a driver

purchases from a former driver, plainly constrains the value of the

latter.

24

In light of these constraints, it is not surprising that, although

there was evidence that drivers abandoned their routes without

selling them, id. at 32, there was little evidence that any driver

had ever materially profited from a sale: “[T]here is no evidence

that any Ballardvale contractor has ever sold a route,” and there

is evidence of only one single-route sale at Jewel Drive. Id. at

31, 38.19 The only evidence of profit on that sale was the

uncorroborated testimony of the former operator that he sold the

route and truck together for at least $3000 more than the truck’s

market value, minus $1000 he paid to the broker. Id. at 31-32.

As the Regional Director noted, the fact that the sale was

“combined with the sale of a truck . . . makes the portion

attributable to the route murky.” Id. at 38. Based on the

operator’s statement alone, he may have netted no more than

$2000 -- without factoring in his expenses over the two years he

had the truck and route. More important, the evidence that there

was any gain at all was “murky” indeed. As the Regional

Director pointed out, although the operator claimed that he had

a bill of sale to support his testimony, and told the hearing officer

that he would produce it, he never did. Id. at 57 n.59. Given that

the burden is on the proponent of independent contractor status

19

The only other sale was by a multiple-route driver. The driver,

Timothy Jung, received about $36,000 for his truck -- for which he

had paid about $35,000 -- together with one of his routes. Jung

abandoned his second route without receiving anything for it.

Regional Director’s Decision at 32, 38. “In these circumstances,” the

Regional Director reasonably found “the evidence of only two route

sales too insubstantial to support a finding of independent contractor

status.” Id. at 38-39.

25

to prove its case,20 it was not unreasonable for the Director to

conclude that FedEx had failed to do so.

C

It would be a mistake, however, to read the court’s opinion

as reflecting nothing more than a factual disagreement with the

NLRB, even on the question of whether the drivers had

entrepreneurial opportunity. There is something more important

at stake here. In concluding that the indicia of entrepreneurial

opportunity were weak, the Regional Director emphasized that

few operators seized any of the opportunities that allegedly were

available to them. Accordingly, she adhered to the NLRB’s

precedent in Roadway III, which involved FedEx Home’s

predecessor corporation, wherein the “Board found that evidence

of a few . . . sales . . . [was] insufficient to support a finding of

independent contractor status, particularly since it was unclear

from the record whether any driver had profited materially from

a sale.” Regional Director’s Decision at 38 (citing 326 N.L.R.B.

at 853).

My colleagues, by contrast, maintain that the failure to

actually exercise theoretical opportunities is “beside the point”

because “‘it is the worker’s retention of the right to engage in

entrepreneurial activity rather than his regular exercise of that

right that is most relevant.’” Slip Op. at 17 (quoting C.C.

Eastern, 60 F.3d at 860). But the proper emphasis in that

quotation from our C.C. Eastern opinion is on the word

20

See Argix Direct, 343 N.L.R.B. at 1020; BKN, Inc., 333

N.L.R.B. 143, 144 (2001); Cent. Transport, Inc., 247 N.L.R.B. 1482,

1483 n.1 (1980); see also NLRB v. Ky. River Cmty. Care, Inc., 532

U.S. 706, 710-12 (2001) (affirming the Board’s rule that the burden of

proof is on the party claiming that a worker is a supervisor rather than

an employee).

26

“regular.” It may not be necessary for workers to regularly

exercise their right to engage in entrepreneurial activity for that

factor to weigh in the balance, but “if a company offers its

workers entrepreneurial opportunities that they cannot

realistically take, then that does not add any weight to the

Company’s claim that the workers are independent contractors.”

C.C. Eastern, 60 F.3d at 860.

Quoting C.C. Eastern and citing Arizona Republic, my

colleagues suggest that “even ‘one instance’ of a driver using

such an opportunity can be sufficient to ‘show[] there is no

unwritten rule or invisible barrier preventing other drivers from

likewise exercising their contractual right.’” Slip Op. at 17. But

all C.C. Eastern held was that under those circumstances, the

Board had erred in “discount[ing] to zero” the significance of

that single factor in the traditional multi-factor test. C.C.

Eastern, 60 F.3d at 860. Nor is there anything in Arizona

Republic to suggest that the Board believes that the exercise of

contractual opportunity by one or even a small number of drivers

can be sufficient. In that case, “[m]any carriers h[e]ld other

jobs,” “40 percent of the carriers actually solicited new

subscriptions,” and 363 carriers -- roughly 29 percent of all

carriers -- had multiple routes. 349 N.L.R.B. at 1045; id. at 1045

n.6. It was in this context, in which “many” carriers held other

jobs, solicited business, and had multiple routes -- and hence had

proven opportunity -- that the Board said “the fact that many

[other] carriers choose not to take advantage of this opportunity

to increase their income does not mean that they do not have the

entrepreneurial potential to do so.” Id. at 1045; compare Slip

Op. at 9. In the instant case, by contrast, no FedEx driver has

another job or solicits business from his delivery customers,21

21

The closest FedEx comes to contending that any driver has

solicited business -- and it is not very close -- is its contention that one

driver “asked the retailer L.L. Bean to ship him some catalogs to

27

and only three have multiple routes. Regional Director’s

Decision at 7, 28.

The import of my colleagues’ suggestion that one or even a

few examples of the exercise of contractual rights can be enough

to decide the entrepreneurialism factor is magnified by their view

that this factor is not just one element in a multi-factor test, but

rather the test’s “emphasis” -- so that an insubstantial exercise

may, in effect, tilt the entire outcome.22 That was certainly not

the role that entrepreneurialism played in C.C. Eastern, in which

we held that, although indicia of entrepreneurial opportunity did

“have some probative weight,” they were “less important to our

determination of the drivers’ status than . . . the absence of

evidence that the Company supervises the means and manner of

their work.” 60 F.3d at 859; see id. at 860. Nor has it played

that role in any other case.

It is not unreasonable for the NLRB to take the position that

a material number of workers must actually take advantage of an

opportunity before it will conclude that the opportunity is

significant and realistic rather than insubstantial and theoretical.

See Regional Director’s Decision at 39. Even if that is not the

better rule, “the least that can be said for the Board’s decision is

that it made a choice between two fairly conflicting views, and

distribute to his customers to generate more L.L. Bean deliveries.”

Regional Director’s Decision at 53 n.33.

22

The significance of designating entrepreneurialism as the

emphasis of the test is not diminished by saying that it is a “principle

by which to evaluate [the other common-law factors] in cases where

some factors cut one way and some the other.” Slip Op. at 7. This is

particularly true because the opinion elevates no other principle to that

role. Cases in which factors cut in different directions are the only

cases at issue, as no determinative principle is required when all the

factors point in the same direction.

28

under these circumstances the Court of Appeals should have

enforced the Board’s order.” United Ins., 390 U.S. at 260.

III

But there is a rub. Perhaps recognizing the thinness of the

record, FedEx attempted to improve its proof of entrepreneurial

opportunity by proffering “system-wide evidence concerning the

number of route sales and the amount of profit, if any, on any

such sale.” Order, FedEx Home Delivery, N.L.R.B. Case Nos.

1-RC-22034, 22035 (Nov. 8, 2006) (Battista, Chrmn.,

dissenting). The Regional Director, however, “refus[ed] to

permit the Employer to introduce” this evidence. Id. In light of

that refusal, the Chairman of the NLRB dissented from the denial

of Board review, protesting that this “evidence may be relevant

to the issue of whether the drivers have an entrepreneurial

interest in their position.” Id.

The Chairman was correct. Regardless of whether one

regards entrepreneurial opportunity as only one factor or as the

decisive factor in determining whether the drivers were

independent contractors, FedEx surely had the right to introduce

the evidence necessary to make its case. See 29 C.F.R.

§ 102.64(a) (“It shall be the duty of the hearing officer to inquire

fully into all matters and issues necessary to obtain a full and

complete record . . . .”); cf. Drukker Commc’ns, Inc. v. NLRB,

700 F.2d 727, 733 (D.C. Cir. 1983) (“It is repugnant to notions

of fairness for the government to seek sanctions for alleged

wrongdoing while withholding from the proceeding evidence

that would demonstrate innocence.”).

In support of her ruling, the Regional Director said only that

“evidence of route sales and entrepreneurial activity at other

terminals had no bearing on the economic value of route sales”

at the Wilmington facilities. Regional Director’s Decision at 6.

29

Why that would be so, she did not say. Perhaps there is

something special about the Wilmington facilities, especially as

compared to others that are far away. But the Director did not

identify what the idiosyncracy might be, or say why at least

evidence regarding nearby terminals would not be relevant. See

Burns Elec. Sec. Servs., Inc. v. NLRB, 624 F.2d 403, 409 (2d Cir.

1980) (citing 29 C.F.R. § 102.64 in holding that the hearing

officer erred in excluding evidence regarding the functions of

certain workers at a nearby facility not within the proposed unit).

The exclusion of FedEx’s evidence appears particularly

arbitrary because the Regional Director did consider other

evidence regarding some terminals not at issue in this case. See

Regional Director’s Decision at 4-5. So did the Board in

Roadway III, where it relied on nationwide data to conclude that

drivers were not independent contractors. See 326 N.L.R.B. at

851 (noting that “only 3 out of Roadway’s 5000 drivers

nationwide” had “used their vehicles for other commercial

purposes”); id. at 853 (“In a system of over 5000 drivers

assigned to over 300 terminals, we find that these few forced

sales, given their circumstances, are insufficient to support a

finding of independent contractor status.”). And so, too, did a

different Regional Director in RPS, Inc. See Decision and Order,

N.L.R.B. Case No. 5-RC-14905 (Region 5, Aug. 3, 2000). That

Regional Director relied on systemwide data to conclude that an

employer’s drivers were independent contractors. Although no

driver at the only facility at issue in that case used his vehicle for

commercial purposes unrelated to RPS’s business, the Director

found persuasive the fact that systemwide “many RPS

drivers/contractors, possibly half” did so. Id. at 56. That record,

the Director said, made it “clear that drivers/contractors can

realistically take advantage of a myriad of entrepreneurial

activities.” Id. at 57.

30

In sum, the Regional Director’s failure to reasonably explain

her refusal to permit FedEx to prove its case requires that we

grant the petition for review and remand the case.

IV

My colleagues conclude that, “[b]ecause the indicia favoring

a finding [that] the contractors are employees are clearly

outweighed by evidence of entrepreneurial opportunity, the

Board cannot be said to have made a choice between two fairly

conflicting views.” Slip Op. at 20. They reach this conclusion

by giving the entrepreneurial opportunity factor a weight, and

analyzing it in a way, that the common law of agency -- as

construed by the courts and the NLRB -- does not. Although the

indeterminate nature of the common-law test may be

problematic, and although the Board may have some room to

modify it, this court cannot. Because the Board’s decision

reflects a “choice between two fairly conflicting views,” we

cannot displace it. United Ins., 390 U.S. at 260.

We can and should, however, reject the Board’s unexplained

refusal to give FedEx a fair opportunity to make its case under

the appropriate test. Accordingly, I would remand the case for

further proceedings.