In July 2006, the International Brotherhood of Teamsters, Local Union 25, sought to represent single-route FedEx delivery drivers in Wilmington, Massachusetts. Although FedEx recognized the drivers’ popular support for union representation, the small-parcel delivery company refused to bargain with the union, disputing the preliminary finding that its drivers were “employees” within the meaning of the National Labor Relations Act (NLRA). The National Labor Relations Board (NLRB) determined that FedEx’s refusal to bargain with the union constituted an unfair labor practice under the NLRA. FedEx appealed enforcement of the NLRB ruling to the D.C. Circuit Court of Appeals.
Writing for the majority, Judge Brown framed the issue as a question of the NLRB’s jurisdiction. Because the NLRB has no jurisdiction over independent contractors, the court would not defer to the NLRB’s employment status determinations unless the NLRB “can be said to have made a choice between two fairly conflicting views.” Therefore, Judge Brown applied the U.S. Supreme Court’s United Insurance common-law agency test to address the underlying question of whether the FedEx drivers were independent contractors or employees. This multi-factor totality test, he explained, had been refined through subsequent cases to focus on whether the putative independent contractor’s position “presents the opportunities and risks inherent in entrepreneurialism.” Applying this test to the facts of the case, the court found that the FedEx drivers were independent contractors, largely because the drivers had the ability to hire others without FedEx’s participation, but also because they signed agreements designating them as contractors, not employees. The court vacated the NLRB’s enforcement order.
Judge Garland dissented on this issue, arguing that the D.C. Circuit should have let the NLRB decision on the delivery drivers’ employment status stand. Judge Garland primarily disagreed with the majority’s almost singular reliance on entrepreneurialism as a factor, arguing that the Supreme Court had emphasized that the test does not favor any one factor. Instead, he argued that this was a case where the NLRB “made a choice between two fairly conflicting views,” and therefore, under the United Insuranceholding, the Court of Appeals had no right to displace the NLRB’s decision, even though it would come to an opposite decision on the facts. Judge Garland argued that his colleagues in the majority were relying too heavily on one of their own past decisions for the emphasis on entrepreneurialism, which did not abrogate the Supreme Court’s approach in United Insurance. “Although the NLRB may have authority to alter the test or at least alter its focus,” he wrote, citing Chevron, “this court does not.” Judge Garland would have remanded the case for the NLRB Regional Director’s evidentiary rulings; however, on the question of the common-law agency test and deference to the NLRB’s application of it, Judge Garland was adamant that his colleagues were out of line.