Western Logistics (27-CA-179230)

United States Government

National Labor Relations Board

OFFICE OF THE GENERAL COUNSEL

Advice Memorandum

DATE:

March 22, 2017

TO:

Paula Sawyer, Regional Director

Region 27

FROM:

Barry J. Kearney, Associate General Counsel

Division of Advice

SUBJECT: Western Logistics, Inc. & Central States

Logistics

Cases 27-CA-179230 & 27-CA-179229

177-2484-5000

177-2484-5067-3500

The Region submitted these cases for advice as to whether the Charging Party, a

delivery driver for a nationwide delivery and logistics provider, is an independent

contractor or an employee within the meaning of Section 2(3) of the Act.1 We

conclude, based on the evidence presented, that the Charging Party is an independent

contractor.

FACTS

Western Logistics, Inc., and Central States Logistics, Inc., are two separate

companies that both do business as “Diligent Delivery Systems” (“Diligent”). Diligent

characterizes itself on its website as a nationwide “transportation and logistics service

provider” that offers eight distinct services, six of which involve some form of delivery

service. Diligent explains that its business also consists of consulting with clients

about how to improve their logistics operations, including by performing the clients’

delivery services. Diligent thus characterizes itself as a “broker” that maintains a

nationwide pool of approximately 3,800 independent owner-operators willing to

provide delivery services for its clients. Broadly, these delivery services fall under two

categories: hot-shot deliveries and dedicated deliveries. Hot-shot deliveries are for

clients who need sporadic or infrequent delivery services, while dedicated delivery

services are for clients who need such services on a daily basis

ide pool of approximately 3,800 independent owner-operators willing to

provide delivery services for its clients. Broadly, these delivery services fall under two

categories: hot-shot deliveries and dedicated deliveries. Hot-shot deliveries are for

clients who need sporadic or infrequent delivery services, while dedicated delivery

services are for clients who need such services on a daily basis.

1 The Region also requested advice as to whether—if the Charging Party is indeed an

employee—the provider attempted to enforce an unlawful class action waiver within

the Section 10(b) period and, if so, whether it would effectuate the purposes of the Act

to issue complaint. Because we conclude that the Charging Party is an independent

contractor, we need not address the Region’s questions concerning the class-action

waiver.

Cases 27-CA-179230 & 27-CA-179229

- 2 -

On April 1, 2013 the Charging Party signed an Owner Operator Agreement with

Diligent to perform dedicated delivery services and on June 28, 2013,

signed an

Owner Operator Agreement to perform hot-shot delivery services. The Charging

Party signed the agreements under

company’s name,

,

which is a

business

runs with

.

signed the

agreements under

company’s name because the insurance benefits for

truck,

which

used both to sell and deliver

as well as deliver items for Diligent’s

clients, were greater under

company’s policy than if

had procured a personal

policy. The Charging Party was based in Colorado Springs, and performed all of

duties by driving directly to Diligent’s clients’ facilities, rather than Diligent’s facility,

which is in Denver. Initially, the Charging Party trained for two days at

, one of Diligent’s clients. Diligent claims that it did not require this training, but

that

required the training in order to allow the Charging Party to

deliver for it

ty was based in Colorado Springs, and performed all of

duties by driving directly to Diligent’s clients’ facilities, rather than Diligent’s facility,

which is in Denver. Initially, the Charging Party trained for two days at

, one of Diligent’s clients. Diligent claims that it did not require this training, but

that

required the training in order to allow the Charging Party to

deliver for it. After that training, the Charging Party worked for a

for approximately a

as a dedicated delivery driver.

then took a hot-shot job

delivering

twice daily for a local

store. Diligent offered the Charging

Party the opportunity to perform the same

hot-shot route three times a day,

but that schedule conflicted with

business, so

turned it down.

Diligent then offered the Charging Party a dedicated delivery job at

where

worked until approximately

or

, 2015.2

As noted above, the Charging Party provided

own pick-up truck and

insurance and paid for

gas. The Charging Party’s truck was not required to bear

Diligent’s name or any other markers. The Charging Party states that

had an

established start time and established routes at each of

jobs. Moreover,

claims

that

was required to install an “app” on

phone through which

was monitored

at all times. The parties’ agreements, however, state that Diligent has no right to

determine drivers’ routes or times. Diligent asserts that any direction or monitoring

the Charging Party may have received was provided by Diligent’s clients and not

Diligent.

The Charging Party was compensated on a one-time basis for hot-shot jobs and

on a monthly basis (regardless of the number of hours worked) for dedicated delivery

services. Diligent did not make deductions from these payments

drivers’ routes or times. Diligent asserts that any direction or monitoring

the Charging Party may have received was provided by Diligent’s clients and not

Diligent.

The Charging Party was compensated on a one-time basis for hot-shot jobs and

on a monthly basis (regardless of the number of hours worked) for dedicated delivery

services. Diligent did not make deductions from these payments. Although the

Charging Party states that compensation was non-negotiable, the parties’ agreements

state that payment for each job will be negotiated by the parties, and there is

evidence that, on at least one occasion, Diligent solicited a proposal from the Charging

Party regarding compensation.

2 All remaining dates are in 2015, unless otherwise noted.

(b) (6), (b

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b

(b) (6), (b) (7)(C)

(b) (6), (b) (

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b) (7

(b) (6), (b

(b) (6), (b)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (

(b) (6), (b) (

(b) (6), (b) (

(b) (6), (b)

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b)

(b) (6), (b

(b) (6), (b)

) (7)(C)

(b) (6), (b) (7)(C

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (

(b) (6), (b) (

(b) (6), (b) (

(b) (6), (b)

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b)

(b) (6), (b

(b) (6), (b)

Cases 27-CA-179230 & 27-CA-179229

- 3 -

The parties’ agreements also state that the Charging Party is free to hire other

individuals to perform delivery services for Diligent’s clients, and that Diligent has no

right to hire, fire, discipline, or set compensation rates for anyone the Charging Party

hires in this manner. Indeed, the evidence demonstrates that other owner-operators

in Colorado hired several additional drivers in order to serve multiple clients

simultaneously. While working for

, the Charging Party was required

to wear a shirt that said “

” on it; while working for

and

,

the Charging Party wore a shirt that bore Diligent’s name.

The Charging Party’s agreements with Diligent lasted one year and were

scheduled to renew each year unless one party gave the other party notice. Under the

terms of the agreements, the Charging Party was not guaranteed work, could decline

work offered by Diligent, and was free to work for others. The agreements also

unambiguously state that the Charging Party is an independent contractor, and that

the parties do not intend to create an employment relationship. The Charging Party

claims that Diligent frequently told owner-operators that they did not “work for”

Diligent.

In early March,

notified Diligent that it no longer wished to use

the Charging Party’s services. Thereafter, Diligent offered the Charging Party

additional jobs, which the Charging Party turned down on the advice of

attorney

do not intend to create an employment relationship. The Charging Party

claims that Diligent frequently told owner-operators that they did not “work for”

Diligent.

In early March,

notified Diligent that it no longer wished to use

the Charging Party’s services. Thereafter, Diligent offered the Charging Party

additional jobs, which the Charging Party turned down on the advice of

attorney.

On March 23, the Charging Party filed a class-action lawsuit in the United States

District Court for the District of Colorado alleging that

had been misclassified as

an independent contractor.

filed the instant charge on June 27, 2016, alleging that

Diligent had attempted to enforce an arbitration clause with an unlawful class-action

waiver against

ACTION

We conclude that the Charging Party is an independent contractor and not an

employee within the meaning of Section 2(3) of the Act.3 Accordingly, the Region

should dismiss the charge, absent withdrawal.

In FedEx Home Delivery, the Board recently reaffirmed that in determining

whether a particular worker is an independent contractor or an employee, the Board

3 Most of the evidence obtained by the Region involves the relationship between

Diligent and the Charging Party. Based on the evidence establishing that the

Charging Party is an independent contractor, and in the absence of evidence that

other owner-operators are treated differently, there is insufficient basis to conclude

that the other owner-operators are employees.

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b)

(b) (6), (b

(b) (6), (b) (7)

Cases 27-CA-179230 & 27-CA-179229

- 4 -

will apply the traditional common-law factors enumerated in the Restatement

(Second) of Agency § 220, with no single factor being determinative.4 Thus, the

following factors are relevant:

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b)

(b) (6), (b

(b) (6), (b) (7)

Cases 27-CA-179230 & 27-CA-179229

- 4 -

will apply the traditional common-law factors enumerated in the Restatement

(Second) of Agency § 220, with no single factor being determinative.4 Thus, the

following factors are relevant:

(a) The extent of control which, by the agreement, the [employer] 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 part of the regular business of the

employer.

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

[employer] and [employee].

(j) Whether the principal is or is not in the business.5

The Board also clarified that it will consider “whether the evidence tends to show

that the putative contractor is, in fact, rendering services as part of an independent

4 361 NLRB No. 55, slip op. at 2 (Sept. 30, 2014) (concluding that package delivery

drivers were statutory employees rather than independent contractors), enforcement

denied, –F.3d –, 2017 WL 836596 (D.C. Cir. March 3, 2017).

5 Id. (quoting Restatement (Second) of Agency § 220 (1958)).

rendering services as part of an independent

4 361 NLRB No. 55, slip op. at 2 (Sept. 30, 2014) (concluding that package delivery

drivers were statutory employees rather than independent contractors), enforcement

denied, –F.3d –, 2017 WL 836596 (D.C. Cir. March 3, 2017).

5 Id. (quoting Restatement (Second) of Agency § 220 (1958)).

Cases 27-CA-179230 & 27-CA-179229

- 5 -

business.”6 The “independent-business factor” includes consideration of whether the

putative contractor has a significant entrepreneurial opportunity, has a realistic

ability to work for others, has a proprietary or ownership interest in his or her work,

and has control over important business decisions, such as the scheduling of

performance, hiring, selection, and assignment of employees, equipment purchases,

and investment of capital.7 The Board also noted that it will construe the independent

contractor exclusion narrowly, and that the burden of proof is on the party asserting

independent contractor status.8

Unlike in FedEx Home Delivery, we conclude that the evidence here

demonstrates that the Charging Party is indeed rendering services to Diligent as part

of an independent business. Thus, Diligent imposes almost no restrictions on how the

owner-operators operate their delivery businesses—including whether they hire their

own employees and, if so, whom. The agreements allow owner-operators to negotiate

compensation for offered jobs and there is evidence that Diligent solicited a

compensation proposal from the Charging Party. Owner-operators also have the

contractual right and practical ability to deliver for other businesses while also

delivering for Diligent. In fact, the Charging Party used

business,

including its truck, to make deliveries for Diligent’s clients. This evidence

demonstrates that the Charging Party had actual, and not merely theoretical,

entrepreneurial opportunity

osal from the Charging Party. Owner-operators also have the

contractual right and practical ability to deliver for other businesses while also

delivering for Diligent. In fact, the Charging Party used

business,

including its truck, to make deliveries for Diligent’s clients. This evidence

demonstrates that the Charging Party had actual, and not merely theoretical,

entrepreneurial opportunity. We conclude, therefore, that the factors, on balance,

demonstrate that the Charging Party is an independent contractor.

A. Extent of Control by the Employer Weighs in Favor of Independent

Contractor Status

Diligent asserts that it controlled virtually no aspect of the Charging Party’s

duties.9 Although the Charging Party alleges that

had established start times and

routes and that

was subject to monitoring by Diligent through an app on

phone,

Diligent vigorously disputes the Charging Party’s characterization and asserts that

6 Id., slip op. at 11 (emphasis in original).

7 Id., slip op. at 12.

8 Id., slip op. at 9-10, 12.

9 We rely heavily on the Owner Operator Agreements for evidence regarding the

working relationship between Diligent and the Charging Party. Diligent maintains

that the terms contained within the agreements are followed in practice, and the

Charging Party has not offered any evidence to rebut Diligent’s claim.

(b) (6), (b) (7)(C)

(b) (6),

(b) (6), (b

the Owner Operator Agreements for evidence regarding the

working relationship between Diligent and the Charging Party. Diligent maintains

that the terms contained within the agreements are followed in practice, and the

Charging Party has not offered any evidence to rebut Diligent’s claim.

(b) (6), (b) (7)(C)

(b) (6),

(b) (6), (b

(b) (6), (b) (

Cases 27-CA-179230 & 27-CA-179229

- 6 -

any such control was exercised by Diligent’s clients, not Diligent itself.10 Diligent’s

position is supported by the parties’ Owner Operator Agreements, which prohibit

Diligent from instructing owner-operators about how to perform their deliveries,

including by establishing routes or hours of work.11 Further, Diligent did not provide

the Charging Party with any sort of handbook or guidance on how to complete

jobs.

was also unaware of any disciplinary policy or procedures.12

Additionally, the Charging Party suffered no adverse consequences for declining

work from Diligent. For example, the Charging Party declined an additional route

while working the hot-shot job for

because the additional time would have

conflicted with

own

business, and Diligent nevertheless continued to

offer

delivery jobs. For these reasons, we conclude that this factor favors

independent contractor status.

B. Whether the Individual is Engaged in a Distinct Occupation or Business

Weighs in Favor of Independent Contractor Status

The Charging Party signed the Owner Operator Agreements with Diligent in

company’s name and used that company, including its insured delivery truck, to

deliver concurrently for

own business as well as for Diligent’s clients.13 Indeed,

10 To the extent that Diligent’s clients, such as

exercised control over

the Charging Party, we could find no case law that would support imputing that

control to Diligent, and there is no evidence that Diligent was the source of any such

control

and used that company, including its insured delivery truck, to

deliver concurrently for

own business as well as for Diligent’s clients.13 Indeed,

10 To the extent that Diligent’s clients, such as

exercised control over

the Charging Party, we could find no case law that would support imputing that

control to Diligent, and there is no evidence that Diligent was the source of any such

control.

11 Compare Argix Direct, Inc., 343 NLRB 1017, 1021 (2004) (finding factor weighed in

favor of independent contractor status where drivers were not required to follow

suggested delivery order and, in fact, deviated from proposed delivery order as long as

goods delivered within customer’s delivery window), with Sister’s Camelot, 363 NLRB

No. 13, slip op. at 2 (Sept. 25, 2015) (finding factor weighed in favor of employee

status where canvassers were not required to work on any given day but were subject

to significant control when they did work).

12 See Argix Direct, Inc., 343 NLRB at 1021 (lack of applicable employee handbook

and disciplinary procedures support a finding of independent contractor status).

13 See Porter Drywall, Inc., 362 NLRB No. 6, slip op. at 3 (Jan. 29, 2015) (finding

factor weighed in favor of independent contractor status where crew leaders provided

own insurance and supplied and maintained own equipment that they used both for

putative employer and other contractors); Dial-a-Mattress Operating Corp., 326

(b) (6), (b)

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b) (

(b) (6), (b) (7

(b) (6), (b)

leaders provided

own insurance and supplied and maintained own equipment that they used both for

putative employer and other contractors); Dial-a-Mattress Operating Corp., 326

(b) (6), (b)

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b) (

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b) (7)(C)

Cases 27-CA-179230 & 27-CA-179229

- 7 -

turned down work offered through Diligent because it conflicted with

business.14

Moreover, the Charging Party did not display Diligent’s logo or any other

markings on

vehicle. Although

was required to wear a shirt with Diligent’s

name on it while working for

and

, the Charging Party wore a shirt that

said “

” while working for that client, which is also where

worked the

longest.15 On balance, we find that this factor weighs in favor of independent

contractor status.

C. Whether Work is Usually Done Under the Direction of the Employer or by

a Specialist Without Supervision Weighs in Favor of Independent

Contractor Status

The Charging Party received no personal supervision while performing deliveries

for Diligent.

did not operate out of Diligent’s Denver location but instead worked

directly out of clients’ facilities. Although the Charging Party claims that

was

monitored through an app on

phone, Diligent explains that a client required

installation of the app and monitored the Charging Party, not Diligent itself.

Diligent’s assertion that it did not monitor the Charging Party is supported by the

parties’ agreements that prohibited Diligent from providing any instruction on how

the Charging Party completed

assignments.16 We conclude that this factor favors

independent contractor status.

NLRB 884, 891 (1998) (same; owner-operators used own vehicles when delivering for

putative employer and other companies).

14 See Porter Drywall, Inc., 362 NLRB No. 6, slip op

ty is supported by the

parties’ agreements that prohibited Diligent from providing any instruction on how

the Charging Party completed

assignments.16 We conclude that this factor favors

independent contractor status.

NLRB 884, 891 (1998) (same; owner-operators used own vehicles when delivering for

putative employer and other companies).

14 See Porter Drywall, Inc., 362 NLRB No. 6, slip op. at 3 (finding factor weighed in

favor of independent contractor status where crew leaders did not work exclusively for

the putative employer).

15 See FedEx Home Delivery, 361 NLRB No. 55, slip op. at 13 (finding factor weighed

in favor of employee status where drivers’ uniforms, logos, and colors on vehicles

indicated they worked for the employer).

16 See Dial-a-Mattress Operating Corp., 326 NLRB at 892 (finding factor favors

independent contractor status where drivers directed themselves by primarily

working away from putative employer’s warehouse, were not directly supervised by

employer, employer did not instruct drivers which routes to take, and drivers not

required to return to employer’s warehouse following completion of scheduled

deliveries).

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b)

(b) (6), (b

(b) (6), (b) (

ct drivers which routes to take, and drivers not

required to return to employer’s warehouse following completion of scheduled

deliveries).

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b)

(b) (6), (b) (7)(C)

(b) (6), (b)

(b) (6), (b)

(b) (6), (b

(b) (6), (b) (

Cases 27-CA-179230 & 27-CA-179229

- 8 -

D. Skill Required in the Occupation Weighs in Favor of Employee Status

The Charging Party was not required to have any specialized training or skills.

The only training

received was two days of training at

which was

required by

, not Diligent itself. Indeed, the parties’ agreements forbid

Diligent from providing any training to owner-operators. In any event, it is unlikely

that the Board would consider two days of training sufficient to find independent

contractor status, given that the Board in FedEx Home Delivery concluded that two

weeks’ worth of training was not sufficient to weight this factor towards independent

contractor status absent any other required skills or training.17 Accordingly, we

conclude that this factor weighs in favor of employee status.

E. Whether the Employer or the Individual Supplies Instrumentalities,

Tools, and Place of Work Weighs in Favor of Independent Contractor

Status

Owner-operators provide their own trucks, which are the primary

instrumentality of their work, and there is no evidence that Diligent facilitated

drivers’ purchase of their vehicles. Owner-operators’ trucks are not required to

display Diligent’s name or any other markings. Additionally, pursuant to the parties’

agreements, owner-operators are solely responsible for purchasing any fuel,

equipment, or accessories needed to complete assignments for the clients. Further,

the Charging Party was based in Colorado Springs and operated out of clients’

facilities, rather than reporting to Diligent’s office in Denver

ired to

display Diligent’s name or any other markings. Additionally, pursuant to the parties’

agreements, owner-operators are solely responsible for purchasing any fuel,

equipment, or accessories needed to complete assignments for the clients. Further,

the Charging Party was based in Colorado Springs and operated out of clients’

facilities, rather than reporting to Diligent’s office in Denver. We conclude that this

factor weighs in favor of independent contractor status.18

17 361 NLRB No. 55, slip op. at 13.

18 See Argix Direct, Inc., 343 NLRB at 1020 (finding drivers had significant

proprietary interest in the instrumentalities of their work where the drivers were

solely responsible for obtaining their vehicles); Dial-a-Mattress Operating Corp., 326

NLRB at 892 (finding fact that drivers primarily work away from putative employer’s

warehouse and need not return to warehouse at the end of the day weighs in favor of

independent contractor status). See also FedEx Home Delivery, 361 NLRB No. 55, slip

op. at 13-14 (finding factor neutral where aspects cut both ways, but noting that the

significance of drivers’ vehicle ownership was undercut where employer played role in

facilitating vehicle acquisition and drivers worked out of the employer’s warehouse

facility).

(b) (6), (b

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

Cases 27-CA-179230 & 27-CA-179229

- 9 -

F. Length of Time for which Individual is Employed Weighs in Favor of

Independent Contractor Status

The parties’ agreements last for one year and automatically renew at the end of

the year, thus facially resembling the agreements in FedEx Home Delivery that the

Board found effectively created a permanent working relationship indicative of

employee status.19 However, the parties’ actual working relationship more closely

resembles the one in Porter Drywall, Incorporated,20 in which crew leaders were

assigned “project-based” jobs

year and automatically renew at the end of

the year, thus facially resembling the agreements in FedEx Home Delivery that the

Board found effectively created a permanent working relationship indicative of

employee status.19 However, the parties’ actual working relationship more closely

resembles the one in Porter Drywall, Incorporated,20 in which crew leaders were

assigned “project-based” jobs. There, the putative employer was a drywall installation

company that maintained a list of crew leaders to aid it in various phases of

installation.21 The crew leaders, in turn, could hire drywall installers to aid them on

specific projects.22 In rejecting the petitioner union’s contention that the crew leaders

had more or less a permanent working relationship with the putative employer, the

Board placed special emphasis on the fact that the crew leaders could work for other

drywall companies and that some crew leaders, in fact, worked for multiple drywall

companies at the same time as working for the putative employer.23

The same is true here. The parties’ agreements specify that the Charging Party is

free to accept or decline work referred by Diligent and may work for any other

company at the same time. This opportunity was not merely theoretical, as the

Charging Party concurrently delivered for

own

business while delivering for

Diligent. In fact, the Charging Party declined work offered by Diligent to

accommodate

business. Rather than delivering exclusively and continuously

for Diligent, the Charging Party delivered for

own business and, at

convenience, worked for three separate clients in three different locations over the

course of

working relationship with Diligent. For these reasons, we find that this

factor is more akin to the “project-based” employment at issue in Porter Drywall

rather than the permanent relationship at issue in FedEx, and thus supports a

finding of independent contractor status.

19 FedEx Home Delivery, 361 NLRB No. 55, slip op. at 14

eparate clients in three different locations over the

course of

working relationship with Diligent. For these reasons, we find that this

factor is more akin to the “project-based” employment at issue in Porter Drywall

rather than the permanent relationship at issue in FedEx, and thus supports a

finding of independent contractor status.

19 FedEx Home Delivery, 361 NLRB No. 55, slip op. at 14. See also Sisters’ Camelot,

363 NLRB No. 13, slip op. at 4 (finding canvassers’ potential for long-term working

relationship with employer weighed in favor of employee status).

20 362 NLRB No. 6.

21 362 NLRB No. 6, slip op. at 1.

22 Id.

23 Id., slip op. at 4.

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7

(b) (6), (b) (

(b) (6), (b)

Cases 27-CA-179230 & 27-CA-179229

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G. Method of Payment Weighs in Favor of Independent Contractor Status

The Charging Party was paid by the job for

hot-shot deliveries and by the

month for

dedicated delivery work, and the monthly salary for dedicated delivery

work did not vary depending on the number of hours

worked. The Charging Party’s

contention that pay rates were nonnegotiable is contradicted by the parties’

agreements that explicitly state that all job rates are negotiable, as well as evidence

that Diligent invited the Charging Party to negotiate compensation for an offered job.

Additionally, Diligent does not make any deductions or withholdings from owner-

operators’ pay. Thus, we conclude that this factor supports independent contractor

status.24

H. Whether Work is Part of the Regular Business of the Employer Weighs in

Favor of Employee Status

Diligent presents itself to the public via its website as a “nationwide

transportation and logistics service provider” (emphasis added). Of the eight distinct

services offered on Diligent’s website, six involve some sort of delivery service,

including hot-shot deliveries and dedicated deliveries

hether Work is Part of the Regular Business of the Employer Weighs in

Favor of Employee Status

Diligent presents itself to the public via its website as a “nationwide

transportation and logistics service provider” (emphasis added). Of the eight distinct

services offered on Diligent’s website, six involve some sort of delivery service,

including hot-shot deliveries and dedicated deliveries. Thus, because the Charging

Party performed delivery services that are at the core of Diligent’s business, we

conclude that this factor weighs in favor of employee status.25

24 See Dial-a-Mattress Operating Corp., 326 NLRB at 893 (finding fact that pay was

negotiable and owner-operators were paid flat fee to weigh in favor of independent

contractor status). Compare FedEx Home Delivery, 361 NLRB No. 55, slip op. at 14

(although employer’s failure to make deductions suggested independent contractor

status, the nonnegotiable nature of drivers’ pay, combined with a payment

methodology that insulated drivers from loss and prevented meaningful gain,

supported a finding of employee status).

25 See Porter Drywall, 362 NLRB No. 6, slip op. at 5 (finding factor heavily in favor of

employee status where crew leaders and installers performed primary service

provided by putative employer that was “the very core of [the putative employer’s]

business”).

(b) (6), (b) (7

(b) (6), (b) (7

supported a finding of employee status).

25 See Porter Drywall, 362 NLRB No. 6, slip op. at 5 (finding factor heavily in favor of

employee status where crew leaders and installers performed primary service

provided by putative employer that was “the very core of [the putative employer’s]

business”).

(b) (6), (b) (7

(b) (6), (b) (7

(b) (6), (b)

Cases 27-CA-179230 & 27-CA-179229

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I. Whether the Parties Believe they are Creating an Independent

Contractor Relationship Weighs in Favor of Independent Contractor

Status

The parties’ agreements state that drivers are “owner-operators” who “shall [not]

in any way or for any purpose be considered an agent, servant, employee, partner, or

co-venturer of [Diligent].” But the Board has held that such language in a

nonnegotiable contract is not dispositive of independent contractor status.26 Thus, we

conclude that this factor is neutral.

J. Whether the Principal is or is not in the Business Weighs in Favor of

Employee Status

Diligent advertises itself, in part, as a transportation and delivery services

provider. Because the Charging Party provided delivery services, which is the same

business Diligent advertises to the public, we conclude that this factor weighs in favor

of employee status.27

K. Whether the Evidence Tends to Show that the Individual is, in Fact,

Rendering Services as an Independent Business Weighs in Favor of

Independent Contractor Status

In FedEx Home Delivery, the Board clarified that this factor actually

encompasses four subfactors: actual entrepreneurial opportunity for gain or loss, a

realistic ability to work for other companies, a proprietary or ownership interest in the

work, and control over important business decisions, such as scheduling, hiring,

equipment purchases, and capital commitments.28

26 See FedEx Home Delivery, 361 NLRB No. 55, slip op. at 14; Porter Drywall, 362

NLRB No. 6, slip op. at 5

subfactors: actual entrepreneurial opportunity for gain or loss, a

realistic ability to work for other companies, a proprietary or ownership interest in the

work, and control over important business decisions, such as scheduling, hiring,

equipment purchases, and capital commitments.28

26 See FedEx Home Delivery, 361 NLRB No. 55, slip op. at 14; Porter Drywall, 362

NLRB No. 6, slip op. at 5.

27 See FedEx Home Delivery, 361 NLRB No. 55, slip op. at 15 (finding factor in favor of

employee status where employer and drivers both engaged in business of small

package delivery); Porter Drywall, 362 NLRB No. 6, slip op. at 5 (finding factor in

favor of employee status where putative employer’s drywall installation business was

the same as the crew leaders’ businesses).

28 361 NLRB No. 55, slip op. at 12.

Cases 27-CA-179230 & 27-CA-179229

- 12 -

i.

Actual entrepreneurial opportunity for gain or loss

The Charging Party was paid a flat rate for all jobs, regardless of the time needed

for completion, and the evidence indicates that those rates were negotiable. In

addition, owner-operators were permitted to hire drivers to assist them, and several

owner-operators increased their entrepreneurial opportunities by taking on multiple

jobs simultaneously and having these drivers perform deliveries for those clients.29

Thus, unlike the delivery drivers in FedEx Home Delivery, the evidence here

demonstrates that the Charging Party had actual—and not merely theoretical—

entrepreneurial opportunity. Therefore, we conclude this subfactor weighs in favor of

independent contractor status.

ii

opportunities by taking on multiple

jobs simultaneously and having these drivers perform deliveries for those clients.29

Thus, unlike the delivery drivers in FedEx Home Delivery, the evidence here

demonstrates that the Charging Party had actual—and not merely theoretical—

entrepreneurial opportunity. Therefore, we conclude this subfactor weighs in favor of

independent contractor status.

ii.

A realistic ability to work for other companies

The parties’ agreements explicitly allowed the Charging Party to perform

delivery services for other companies, and indeed the Charging Party performed

deliveries for

own company—

—while concurrently

delivering for Diligent’s clients.30 Indeed, in order to accommodate

business, the

Charging Party declined additional work offered by Diligent, with no repercussions.31

Thus, we find this subfactor weighs in favor of independent contractor status.

iii.

Proprietary or ownership interest in the work

The Charging Party did not possess any proprietary interest in Diligent’s clients

or routes. Rather, Diligent offered jobs to the Charging Party as they became

available. This subfactor thus weighs in favor of employee status.

29 See Argix Direct, Inc., 343 NLRB at 1020-21 (fact that five of the owner-operators

were entrepreneurs who owned 20 of the 63 trucks under their own companies

supported independent contractor status).

30 Compare FedEx Home Delivery, 361 NLRB No. 55, slip op. at 15 (fact that drivers

were effectively prevented from working for others because of work hours and

commitment to employer “highly significant” and indicated employee status).

31 Cf. Roadway Package Systems, 326 NLRB 842, 851 (1998) (fact that drivers are

prohibited from using trucks during working hours for outside businesses, combined

with incentive to keep trucks overnight at employer’s facility, effectively undercut any

entrepreneurial ability).

(b) (6), (b) (

(b) (6), (b) (7)(C)

d employee status).

31 Cf. Roadway Package Systems, 326 NLRB 842, 851 (1998) (fact that drivers are

prohibited from using trucks during working hours for outside businesses, combined

with incentive to keep trucks overnight at employer’s facility, effectively undercut any

entrepreneurial ability).

(b) (6), (b) (

(b) (6), (b) (7)(C)

(b) (6), (b) (

Cases 27-CA-179230 & 27-CA-179229

- 13 -

iv.

Control over important business decisions

The Charging Party had the ability to make important decisions affecting

business. Thus, the evidence demonstrates that the owner-operators have an

unfettered right to hire and fire their own employees.32 Moreover, the Charging Party

was free to accept or decline any work offered to

, and in fact turned down work to

accommodate

own business.33 Finally, the Charging Party alone was responsible

for acquiring and maintaining

truck, insurance, and any related equipment. Thus,

we conclude that this subfactor also weighs in favor of independent contractor status.

Overall, the “Independent Business” factor weighs in favor of independent

contractor status.

Conclusion

We conclude that the evidence establishes that the Charging Party is an

independent contractor. Although there are certain indicia that lean toward finding

employee status—e.g., the skill involved and the fact that drivers perform an integral

aspect of Diligent’s business—we find that these factors are outweighed by the other

indicia of independent contractor status. Thus, Diligent exercises almost no control

over how the Charging Party performed deliveries for clients, the Charging Party

supplied

own truck and insurance that

used while delivering both for Diligent

and

own business,

was able and invited to negotiate pay rates, and

rendered

services to Diligent as part of a genuinely independent business, with the ability

to hire and fire

own employees and with opportunities for entrepreneurial gain

and loss

rging Party performed deliveries for clients, the Charging Party

supplied

own truck and insurance that

used while delivering both for Diligent

and

own business,

was able and invited to negotiate pay rates, and

rendered

services to Diligent as part of a genuinely independent business, with the ability

to hire and fire

own employees and with opportunities for entrepreneurial gain

and loss.

32 See FedEx Home Delivery, 361 NLRB No. 55, slip op. at 15 (finding the right to hire

and fire employees indicative of independent contractor status, notwithstanding that

other factors—such as effectively being prevented from working for others because of

working arrangement with employer—meant that the drivers did not have

meaningful entrepreneurial opportunity and were employees).

33 See Porter Drywall, 362 NLRB No. 6, slip op. at 5 (deciding whether to take a

particular job and hire others for it, combined with ability to work for others, presents

real opportunity for economic gain or loss).

(b) (6), (b)

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b)

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b) (7

(b) (6), (b) (7

(b) (6), (b)

(b) (6), (b

(b) (6), (b

Cases 27-CA-179230 & 27-CA-179229

- 14 -

For these reasons, we conclude that the Region should dismiss the charge, absent

withdrawal.

/s/

B.J.K.

ADV.27-CA-179230.Response.WesternLogistics.

(b) (6), (b) (7)(