NLRB Affirms that FedEx Delivery Drivers are Employees, Not Independent Contractors, and Entitled to Unionize
October 21, 2014 by Beeson Tayer & Bodine
The National Labor Relations Board (NLRB) has decided that FedEx’s home delivery drivers are employees who have the right to join a union, and not independent contractors as FedEx has long contended. This decision comes on the heels of a Federal Court of Appeals decision finding FedEx Ground’s California drivers are employees entitled to overtime under California law. We at Beeson, Tayer and Bodine (BT&B) have been following legal findings that have clarified the contactor/employee relationship in terms of basic employment rights over the last several months. As you will see below, there are advantages to businesses if they can use contractors rather than employees for some of their labor needs.
Because the National Labor Relations Act excludes independent contractors from overtime pay as well as certain other protections, companies have an incentive to classify their workers as independent contractors. The NLRB, however, looks beyond a company’s classification of its workers and scrutinizes the actual relationship between them, which entails a detailed factual analysis. With respect to FedEx Home, the analysis included:
- FedEx’s control over the drivers’ day-to-day work;
- whether the drivers were engaged in a “distinct occupation or business”;
- whether the drivers were directed or supervised by FedEx supervisors or agents;
- whether special or unique skills are required to do the work;
- whether FedEx or the drivers’ supplied the tools and the place of work;
- how long FedEx employs the drivers;
- how the drivers are paid and whether FedEx set their compensation;
- whether package delivery is central to FedEx’s business;
- whether drivers believe they are independent contractors; and
- whether drivers truly operate an independent business with entrepreneurial opportunities.
The Board considered each of these factors and found that FedEx exercised significant control and supervision over the drivers, and that they were not engaged in distinct businesses nor did they have entrepreneurial opportunities. The Board also found that the drivers’ work – delivering packages – was central to FedEx’s business and that the drivers were not required to have special skills other than the training provided by FedEx. Because FedEx controlled the drivers’ compensation and provided them financial assistance, and because the drivers had a permanent working relationship with FedEx, the Board held that the drivers were employees, even though FedEx intended its drivers to operate as independent contractors.
The Board’s decision means that the certification of the Drivers’ chosen union, Teamsters Local 671, will stand and FedEx Home must bargain in good faith. BT&B attorneys are pleased that the NLRB has clarified the employment relationship in favor of protecting worker rights for those that have previously been considered independent contractors with fewer legal protections and exclusion from the right to organize and collectively bargain employment conditions.
If you believe you have been misclassified as an independent contractor, your rights as an employee may have been violated. For more information on job rights and labor law protections visit the BT&B website or contact us directly at our Sacramento or Oakland law firm locations.
The case is FedEx Home Delivery, 361 NLRB No. 55 (September 30, 2014)
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