In a highly-anticipated decision issued this week in The Atlanta Opera, Inc.  In this case the National Labor Relations Board returned to the 2014 FedEx Home Delivery (FedEx II) standard for determining independent contractor status under the National Labor Relations Act, and overruled it’s Trump era standard in SuperShuttle (2019).

In applying the FedEx II standard, the Board found that the makeup artists, wig artists, and hairstylists who work at the Atlanta Opera – and who had filed an election petition with the Board seeking union representation – are not independent contractors, excluded from the Act, but rather are covered employees.

In its decision, the Board said it reaffirmed longstanding principles – consistent with the instructions of the Supreme Court – and explained that its independent-contractor analysis will be guided by a list of common-law factors.

The Board expressly rejected the holding of the SuperShuttle Board that entrepreneurial opportunity for gain or loss should be the “animating principle” of the independent-contractor test.

Super Shuttle, a 2019 case involving the company that transports its passengers primarily to airports, set the primary definition of an Independent Contractor as one who in his or her work for a company can benefit from “entrepreneurial opportunity” and enhance his or her financial gain. The Super Shuttle decision said control and “entrepreneurial opportunity are two sides of the same coin: the more of one, the less of the other.”

The Board further explained, in Atlanta Opera, that entrepreneurial opportunity would be taken into account, along with the traditional common-law factors, by asking whether the evidence tends to show that a supposed independent contractor is, in fact, rendering services as part of an independent business.

In reviewing the facts of this case and applying the FedEx II standard in Atlanta Opera, the Board determined that the majority of the traditional common-law factors point toward employee status. The Board also determined that the evidence did not show that the stylists rendered services as part of their own independent businesses.

“In today’s decision, the Board returns to the independent contractor test articulated in FedEx II, and reaffirms the Board’s commitment to the core common-law principles that the Supreme Court has determined should guide the Board’s consideration of questions involving employee status,” said Chairman Lauren McFerran. “Applying this clear standard will ensure that workers who seek to organize or exercise their rights under the National Labor Relations Act are not improperly excluded from its protections.”

Members Wilcox and Prouty joined Chairman McFerran in issuing the decision. Member Kaplan dissented from the overruling of SuperShuttle, but concurred in finding that the stylists were employees, not independent contractors.

Teamsters General President Sean M. O’Brien said that “the Teamsters Union is pleased that the NLRB has taken a critical step in putting power back into the hands of workers and reversing an egregious rule that made it easier for corporations to misclassify hardworking men and women.

Reuters reports that Kristin Sharp, CEO of gig economy trade association Flex, said Tuesday’s ruling was out of step with an increasingly tech-driven economy defined by worker flexibility. America’s leading app-based platforms, representing more than 52 million workers, joined together in 2022 to form Flex , a new industry association to serve as the voice of the app-based economy. Founding member companies include DoorDash, Gopuff, Grubhub, HopSkipDrive, Instacart, Lyft, Shipt, and Uber.

The U.S. Department of Labor is expected to soon finalize a proposed rule opposed by business groups that would narrow the circumstances in which workers qualify as independent contractors under federal wage laws.

NLRB Reverses It’s 2019 Trump Era Independent Contractor Standard